Learn about Participating Funds and Bonuses

What is a Participating Policy?

A participating policy is a life insurance policy which provides both guaranteed and non-guaranteed benefits. Participating policyholders participate or share in the profits of the Participating Fund. The performance of the Participating Fund is affected by the investment return of the fund, the claims experience of the fund and the level of expenses incurred by the fund. These in turn affect the non-guaranteed benefits payable to you as a policyholder of the fund.  

Key features of a Participating Policy:

·        Premiums are pooled with those of other participating policies in the Participating Fund.

·        The fund invests in a range of assets to generate an investment return. The assets of the fund can be invested in government and corporate bonds, equities, property and cash. The proportion invested in each asset class (often referred to as the investment mix) may change over time, as determined by Great Eastern. The fund may use derivatives for hedging or efficient portfolio management.

·        The Participating Fund pays benefits to policyholders of the fund and the expenses of running the fund.

·        It has guaranteed benefits and non-guaranteed benefits in the form of bonuses that will be added to your policy(ies). 

·        Non-guaranteed benefits are determined on an annual basis. Once the non-guaranteed bonuses have been added to your policy, it cannot be subsequently reduced or taken away on claim. When non-guaranteed bonuses are declared on participating policies, Great Eastern may receive a distribution from the Participating Fund.

What are the different types of bonuses referred to in the bonus statement?

Reversionary Bonus

Reversionary bonuses are non-guaranteed bonuses added yearly to your policy(ies). The reversionary bonus, once added, will form part of the guaranteed benefits of your policy. They are usually payable in full when a claim is paid or when the policy matures. However, when you surrender the policy or the reversionary bonuses, only a proportion of the reversionary bonuses will be payable since you did not hold your policy until a claim arises or until it matures.

Your policy has to be in-force for at least 3 years, or the length of the time stated in your policy before you can  withdraw the bonus. However, it is not to your financial advantage to do so, as only the surrender value of the policy will be paid to you. This value is lower than your accumulated bonus.

Terminal Bonus

Terminal bonuses are non-guaranteed bonus that may be payable when you surrender the policy, when a claim is paid or when the policy matures. They are separate from any reversionary bonuses. 

Cash Bonus

Cash bonuses are non-guaranteed bonuses which are paid out on declaration, on your participating policy upon survival of the Life Assured at each policy anniversary or when the amount is due, if applicable.

How are bonus rates determined?

Every year, the appointed actuary will conduct a detailed analysis of the performance of the Participating Fund andmake recommendations on the amount of non-guaranteed bonuses to be allocated.

The appointed actuary must ensure that non-guaranteed bonuses which are allocated and hence guaranteed can be supported by the fund. This is to ensure the continued financial soundness of the fund. In addition, the non-guaranteed bonuses recommended must be equitable to all participating policyholders.

The appointed actuary will present his recommendations to the board of directors of the insurer for approval. Once approved, the non-guaranteed bonuses for that year will be declared on the policies.

Generally, we try to avoid large fluctuations in the non-guaranteed bonuses from year to year by smoothing bonuses over time. This means that non-guaranteed bonuses may not be immediately adjusted in years when the performance of the fund has been good. This creates a buffer which allows us to avoid significant changes to the non-guaranteed bonuses when conditions are less favourable. The net effect is that the amount of non-guaranteed bonuses may not necessarily follow the short-term ups and downs in the investment markets.

Can I withdraw the accumulated bonus?

Once declared, the accumulated reversionary bonuses are guaranteed and are payable in the event of a claim. We do not encourage you to withdraw this accumulated bonus prematurely. This is because you will be paid only the surrender value of the accumulated bonus. If you have short-term financial needs, you may wish to consider taking a policy loan instead.

What information does the bonus statement contain?

The Annual BonusStatement contains the following:

·        The performance of the Participating Fund and its future outlook

·        The non-guaranteed bonuses allocated (if any) to your policy(ies) for the year

You will also receive an update on the projected total maturity value for an endowment policy (or revised total surrender value and death benefit for whole life policy) whenever there is a change in the non-guaranteed bonuses declared.

You can also request for a Policy Illustration showing illustrations of future non-guaranteed bonuses based on the projected performance of the Participating Fund.

What are illustrated values?

Illustrated values are calculated based on assumptions of future reversionary and terminal bonus rates, if applicable. Actual bonuses that will be declared in the future may be higher or lower depending on the performance of the Participating Fund. Illustrated values are not guaranteed.

For policies where there is no revision in bonus rates, why are the "Illustrated Death Benefit" and "Illustrated Surrender Value" different from the illustrated values in my bonus statement last year?

The illustrated values will be different from the bonus statement last year if your policy is a whole life policy and the life assured’s age is between 45 to 79 as the illustrated values are based on the year that is 20 years from the current year.

For example:

If your age today is 47, the illustrated values this year are based on your age 20 years from current which is age 67. In the bonus statement last year, your age was 46 therefore the illustrated values are based on your age 20 years from last year, which is age 66.

Why is "Illustrated Maturity Value" shown for some policies, and "Illustrated Surrender Value" and "Illustrated Death Benefit" shown for others?

“Illustrated Maturity Value” are shown for endowment type of policies while “Illustrated Surrender Value” and “IllustratedDeath Benefit” are shown for whole-life type of policies.

The illustrated surrender value and illustrated death benefit are based on the life assured's (LA) age today as follows: 

If LA’s age is below 45 – the illustrated values are based on the year that the LA turns 65.

If LA’s age is between 45 to 79 – the illustrated values are based on projected amount 20 years later, which varies year on year.

If LA’s age is above 79 – the illustrated values are based on the year that the LA turns 99

For policies with survival benefit and/or cash bonus, the illustrated values exclude any survival benefit and/or cash bonus kept on deposit with Great Eastern.

You may refer to the original policy illustration for these values. 

How do I retrieve my bonus statement?

1. Sign in to the Great Eastern App using your Singpass or Great ID.

2. Tap More from the bottom menu.

3. Tap Documents.

4. You will see a list of your most recent eDocuments. Tap Statements at the top of the screen to view your statements.

5. Tap the statement you wish to view.

6. View your bonus statement.

I wish to receive hardcopy communications. How can I update my preference?

You may wish to update your preference via the following:

Log on to eConnect > Click View Profile > Correspondence Preference > Select Hardcopy

OR

Submit a request via the form here.

OR

Contact our customer service for assistance.

I have other policies that are not reflected in this bonus statement. Why is this so?

This bonus statement is an annual statement applicable for participating policies which were in force at the end of the last financial year. If you have new participating policies that were incepted this year, they will not appear in this year's bonus statement.

Updates for non-participating policies will be reflected in a separate statement.