Ex-NTUC Income CEOs Tan Kin Lian & Tan Suee Chieh question alleged payout reductions for Income policies

Ex-NTUC Income CEO Tan Kin Lian calls reduction in Income Insurance policy bonuses ‘unjustified’

Former NTUC Income Chief Executive Tan Kin Lian has raised concerns about reduced policy payouts by Income Insurance, saying the cuts appear “unjustified.”

In a Facebook post on Tuesday (28 Oct), he shared a policyholder’s case where the maturity benefit allegedly fell by over 25% from its original projection — despite what he described as a “favourable investment environment”.

Payout reportedly dropped from S$73K to S$53K

Mr Tan said the policyholder had purchased an endowment policy in 1991 with an illustrated maturity benefit of S$73,150.

However, according to him, the actual payout due in 2025 is now reduced to S$53,430. This comprises a sum assured of S$22,000, a bonus of S$24,376, and a special bonus of S$7,054.

This, he said, represents a “large reduction” that “appears to be unjustified considering the favourable investment environment over the past 34 years” and at present.

NTUC Income’s bonus structure changed in 2009

Mr Tan explained that NTUC Income had restructured its bonus system in 2009, shifting annual bonuses towards special, or terminal, bonuses.

Before the change, the special bonus was declared at 25% of total annual bonuses. At the time, the company had promised to increase special bonuses to offset the reduced annual bonuses.

Citing NTUC Income’s 2009 Consolidated Financial Statements, he noted that the insurer had stated: “Special bonuses for policies whose bonuses were restructured in 2009 have been increased to compensate for the reduced annual bonuses.”

In his post, Mr Tan said the objective of the change was to “enhance financial strength” and offer flexibility that could lead to “better benefits for policyholders in the long term”.

Ex-NTUC Enterprise & Income CEO Tan Suee Chieh agrees & calls 25% reduction ‘unwarranted’

Mr Tan Suee Cheich — who was CEO and director of NTUC Income in 2009 — commented under Mr Tan’s Facebook post, explaining that the bonus reshaping was done to “reduce contractual liabilities and increase investment flexibility”.

Mr Tan Suee Chiech also said he agreed with Mr Tan Kin Lian’s opinion, calling the 25% reduction “unwarranted”.

He added that actual payouts “should be maintained unless there is an investment crisis”.

“Unless there are data or background we are not privy to, it would appear this is a violation of actuarial principles and policyholders’ reasonable expectations,” he said.

He urged Income Insurance to explain or rectify the decision.

Commenters discuss NTUC Income Insurance’s shrinking returns

The post sparked a wave of discussion from long-time policyholders and former staff, who shared their experiences with past Income products.

One commenter, who had sold many endowment policies under Mr Tan’s leadership, praised his tenure, saying the returns were “always better than projected”.

“When Mr Tan left Income… the cooperative nature for the people started to diminish.”

Another policyholder said bonus cuts were a recurring issue, citing his own experience with Revosave and Vivolink policies. He added that his own exchange-traded fund (ETF) investments had outperformed his life policies.

Others questioned whether there had been early withdrawals that could explain the lower payout. Mr Tan clarified, “There was no withdrawal or encashment of the bonus over the years.”

Calls for fair treatment of policyholders

While acknowledging that special bonuses are non-guaranteed, Mr Tan stressed there is an “implicit understanding” that these bonuses should be determined fairly based on fund performance.

“As the investment environment appears favourable, there does not appear to be any reason for the special bonus to be kept at 25%,” he wrote.

Mr Tan added that the issue likely affects “many thousands of policies” maturing this year and beyond, urging fair and equitable treatment for all policyholders.

MS News has reached out to Income Insurance for comment.

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