GE investors laud payment

Aug 2, 2009

Mr Sekaran C. is one of about 18,000 Great Eastern Life customers who will get all of their money back. The company's offer was announced on Friday.

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 in five tranches between 2005 and 2007.

He will be getting about $65,000 after having received about $10,000 in payouts since 2005. He has about $200,000 worth of policies with the insurer, including this investment. 'I am glad that they have taken this proactive stance to put customer needs as a priority,' said Mr Sekaran, 41, on Saturday.

'If you look at what's been happening in this (economic) climate, too many big institutions have let people down...Great Eastern might have lost some money in the short term but in the long term, they will gain from this move,' he said, adding that 'people's confidence and trust in them will be entrenched'.

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 per cent to 4.9 per cent. Values have since plummeted between 40 per cent 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 GLC customers are between 30 and 60 years old, with females making up 65 per cent of all policyholders, said a spokesman.

Other investors also applauded the move. Ms Annie Tan, 49, said she was not expecting such generosity from a financial institution, but 'is thankful for this opportunity' to redeem her $30,000 investment made in 2005.