New ways to mislead consumers

A life insurance company has launched a new product with a new angle. They claim to provide an income to the policyholder during retirement.

I saw a benefit illustration given to a young man at age 30. The life insurance policy has many complicated features that baffle me. The consumer asked for my views. Frankly, it is a waste of my time to analyse these types of products that are designed to distract consumers from the poor yield and to benefit the insurance agents and the insurance companies.

Anyway, I looked at the benefit illustration and found that the cash value at the end of 25 years is less than 60% of the accumulated premiums, i.e. the deduction is more than 40%. The yield is only 1.4%, which is terribly low. The insurance agent distracts the consumer by talking about the monthly income during retirement. The agent pressurized the consumer to decide because the premium rate will increase after the next birthday.

I gave this advice to the consumer:

• Do not buy any insurance product that you do not understand
• Do not expect me to waste my time to analyse these complex products
• Do not buy because the premium rate may increase after your birthday.
• Avoid insurance agents who earn a large income selling poor life insurance policies to you.

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If you wish to know how to manage your financial future, without being conned by a life insurance agent, you can start by trying this financial planning tool. You can also pay $50 to the experts to provide guidance to you on how to understand the statement. Do not waste $5,000 of your premium as commission to the agent who sell you a poor life insurance policy.

Tan Kin Lian