Singapore insurance policy bonus set to fall

In view of the global financial crisis and economic recession, policyholders of participating life insurance policies (popularly known as par policies) can expect non-guaranteed benefits, in the form of bonuses, to be revised downwards for 2008 and into the future, said Singapore's Life Insurance Association (LIA).
These bonus changes are needed due to the poor investment climate in 2008, it added in a recent statement. It said par policies offer both protection and savings through a combination of guaranteed benefits and non-guaranteed benefits in the form of bonuses. Bonuses are determined based on the performance of the par funds.
Like many other financial products and investments, par funds have not been spared from the brunt of the recent financial market meltdown.
The bonuses for par policies in 2008 are therefore expected to be lower than those declared in preceding years.
LIA president Darren Thomson said despite an extremely turbulent past year, all life insurers have been able to maintain the solvency of their par funds. "We remain able to continue to allocate bonuses to par policyholders, albeit at a lower level." - The Malaysian Reserve, p32, Apr 1, 2009