Sunday, August 16, 2009

Great Eastern Life Customers - fully compensated for ILP

Happy to get money back
source: Straits Times 1 Aug, 2009
By Yang Huiwen

TEACHER Sekaran C.'s jaw dropped when he learnt that he would be fully compensated for the $75,000 investment he made in a Great Eastern Life product four years ago.

He is one of about 18,000 Great Eastern Life customers who had bought GreatLink Choice (GLC), a series of investment-linked insurance products which were sold at five tranches between 2005 and 2007.

In a surprise move last Friday, Great Eastern announced that about 18,000 of its customers who had bought the products will be able to get all of their money back.

The GLC plans, available for a minimum investment of $5,000, had aimed to provide investors with fixed annual payouts ranging from 3.5 to 4.9 per cent.

Values have since plummeted between 40 and 80 per cent. This voluntary move will cost Great Eastern $250 million.

Policyholders can opt to redeem their investments and receive a sum equal to their original investment, less total payouts received to date.

About 85 per cent of GreatLink Choice customers are between 30 and 60 years old, with females making up 65 per cent of all policyholders, said a spokesman.

a blog on: Financial Planning Advice - Christopher Pua

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