A foreigner, working in Singapore, approached me for advice. He bought a Vista plan from a financial planner two years ago, and was shocked to learn now about the high monthly charge of 5% of the premium that is deducted from the account. He never knew that he was buying a life insurance policy with a high upfront charge, which came into effect after 18 months. He was told that it is a regular saving investment product.
The financial adviser had assured him, a few times, that the charge was only 0.7% after 18 months. The adviser had told a deliberate lie to him, to get him to put in a large sum of savings, more than $3,000 a month. I asked him to check about the surrender charge, which I suspect will take away most of the accumulated premiums - if the policy is terminated now.
It is bad for an insurance company to design such a policy that is confusing to the consumer, and for the financial adviser to tell a deliberate lie to get the consumer to put in a large part of his savings. This amounts to cheating, but how can the consumer prove it? He must have signed the forms without proper understanding.
I advised him to write to the newspaper but he is worried that his colleagues and employer will get to know of his predicament.
My advice to consumers - avoid all financial advisers and insurance agents. Do not buy any investment or life insurance product from a person who approaches you. You will never know if you can become the next victim of this type of financial product.
My message to MAS - is this the kind of financial hub that you wish to build for Singapore? Do you wish to sit back and allow these types of practices to continue?
Tan Kin Lian
Sunday, January 30, 2011
Big loss on ILP
Dear Mr Tan,
Here is my two cents worth for investment linked products. My wife, being a naive person, bought an insurance/investment plan from a bank after she asked about how to earn a decent return on her hard earned money but was sweet-talked by a financial planner to sign up for the plan. Once the plan was signed, the financial planner did not call her for the next five years and she faithfully contributed $500 a month.
After investing over $38,000 over 6 years, she was told that the current value was only $26,000, giving a loss of 31% (no counting inflation). After selling the policy, agents have a hands off approach.
I do believe that most people are better off investing in an STI ETF or some blue chip share which gets dividends. I do hope that other investors do learn from our mistakes and not be CONNED into buying investment linked products from agents who think of nothing but earning a quick buck from naive people like my wife. My pain is your gain!
*Kindly take note that most insurance agents do not have a basic salary or a very low basic salary thus they would sell products which would give them the most commission as just to meet the client, they would have to pay for dinner, transport, parking etc thus selling low commission products such as term insurance would not make sense to them. PUT YOURSELF IN THEIR SHOES, WOULD YOU BE SELLING TERM INSURANCE TO EARN A MEASLY COMMISSION? (Food for thought)
My comment
It is best for consumers to avoid all financial advisers and insurance agents. They have to earn commission by selling this type of bad product to you.
Here is my two cents worth for investment linked products. My wife, being a naive person, bought an insurance/investment plan from a bank after she asked about how to earn a decent return on her hard earned money but was sweet-talked by a financial planner to sign up for the plan. Once the plan was signed, the financial planner did not call her for the next five years and she faithfully contributed $500 a month.
After investing over $38,000 over 6 years, she was told that the current value was only $26,000, giving a loss of 31% (no counting inflation). After selling the policy, agents have a hands off approach.
I do believe that most people are better off investing in an STI ETF or some blue chip share which gets dividends. I do hope that other investors do learn from our mistakes and not be CONNED into buying investment linked products from agents who think of nothing but earning a quick buck from naive people like my wife. My pain is your gain!
*Kindly take note that most insurance agents do not have a basic salary or a very low basic salary thus they would sell products which would give them the most commission as just to meet the client, they would have to pay for dinner, transport, parking etc thus selling low commission products such as term insurance would not make sense to them. PUT YOURSELF IN THEIR SHOES, WOULD YOU BE SELLING TERM INSURANCE TO EARN A MEASLY COMMISSION? (Food for thought)
My comment
It is best for consumers to avoid all financial advisers and insurance agents. They have to earn commission by selling this type of bad product to you.
North South Expressway
I wrote this letter to the Straits Times to suggest how the $7-8 billion for the North South Expressway could be better spent. The ST did not publish my letter. http://tankinlian.com/admin/file.aspx?id=382
Solicitors Kildare
Solicitors Kildare | Kildare Solicitors Home
Welcome to Solicitors Kildare. The http://SolicitorsKildare.com website allows you to contact a solicitor in Kildare to deal with any legal problems or issues you might have.
We will be launching our solicitor’s practice on or around the 1st of March, 2011 and want to take this opportunity to let you know what we will do and what areas we will be covering in the provision of legal services.
We will represent clients from all backgrounds, walks of life and deal with all kinds of law including
Subscribe to:
Posts (Atom)