| By Lorna Tan, Senior Correspondent |
DECISION-DAY looms for the 18,000 investors in the Great Eastern (GE) Life product GreatLink Choice, (GLC) with the firm's take-themoney-and-run offer expiring on Friday.
At first glance, it looks like a no-brainer. Accept the offer and walk away with your initial stake as if you have not invested in the product.
But D-Day might be a bit more complicated than that for those who invested in the first couple of GLC tranches.
The single premium product was sold in five tranches between 2005 and 2007, netting the insurer $594 million in premiums.
It was marketed as a safe investment with a minimum sum of $5,000 and with the principal sum targeted to be returned at maturity. The plans have a five- or seven-year maturity, and the first two tranches would have matured in September and October next year.
It yields annual payouts of between 3.5 and 4.9 per cent of the capital invested, depending on the tranche. Both the principal repayment on maturity and annual payouts are not guaranteed. The investor also gets some life cover.
But the product was belted by the economic downturn. As at the end of last month, the values of the GLC plans, which are linked to a class of complex financial instruments, had plunged by between 27 and 77 per cent.
It prompted GE to offer a painless exit to customers, who have until Friday to accept the goodwill offer and redeem their plans.
Those who do will get a sum equal to their original investment, less total payouts received.
Customers stuck with the worst-hit tranches - GLC 3, 4 and 5 - will likely jump at the offer but those who bought into the first two tranches have not had losses anywhere near as bad so their decision is far from clear.
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