Bonus cut on life insurance policies

Dear Mr. Tan,

I received a letter fror my insurance company that they are cutting my bonus. I know that the global economic situation is bad, but I feel that there is no need for a big cut. After all, the insurance company made big profit last year, and they did not increase their bonus rate by much. Is it fair?

REPLY

I agree with your views. There is lack of transparency in the manner in which the bonus has been cut. Some policies have a bigger cut in bonus compared to other policies. It seems that the old plans have bigger cut compared to the newer plans, as the insurance company hopes to sell their new plans. 

It is important that insurance companies should treat all policyholders fairly and that the bonus must be distributed fairly based on the actual experience of the insurance fund. It is not fair for an insurance company to withhold profits in good years and make a big cut in bad years.

If you wish to provide feedback on the bonus cut on your policy, you can give details here. It will be kept in confidence.