WE REFER to the Forum Online letter by Madam Tiah Ling Choo, 'Bank's projected value of insurance product fell 35% in 4 days' (July 31).

We would like to take this opportunity to address Madam Tiah's concerns over the annual bonus statement that she received.

She stated that there was a 35 per cent reduction in maturity value within four days following the purchase of UOB Life Maxi Dollars 9, a single-premium insurance product.

We would like to clarify that when she bought the plan on Dec 27 last year, she was given the illustrated projection of total maturity benefit. However, in the annual bonus statement dated July 14 this year, total maturity benefit was calculated based on the end of the financial year as of Dec 31 last year. This is an industry practice. Thus, it would seem as if there was a shortfall of 35 per cent in bonus, but in reality, this is not so.

The total maturity benefit in the annual bonus statement is readjusted to show the returns of 2.2 per cent per annum, which is still within the initial projections of between 1.8 per cent and 3.3 per cent per annum as shown on Dec 27 last year.

The actual maturity benefits, payable at the end of Madam Tiah's policy term, are subject to market conditions and the actual performance of the underlying investments at that time. Therefore, the non-guaranteed bonuses on the policy may be revised upwards or downwards each year.

We have since contacted Madam Tiah to explain the matter to her.

Jeannette Seah (Ms)
Senior Manager
Marketing & Communications
UOB Life Assurance

This article was first published in The Straits Times.