Dear Mr. Tan,
It my pleasure to see such a senior and high ranking person who is willing to contribute your knowledge and experience to help public continuously after your retirement. You offer an excellent channel for ordinary people such as me to seek help on problems related to insurance.
In February, my car grazed another car at a turning point in a car park. Both of us have made reports to our insurance company accordingly.
After that, I received three letters, pertaining to the claim issues, from a lawyer appointed by the third party. The first letter is to me, the second is to my insurance company and copied to me. However, the third one in June is to me and inform me that they have filed a civil claim loss and damage. The proceedings is against me.
My insurance agent always told me those are all normal procedures until the last letter while she asked me to collect the Writ myself and then pass to insurance company. I am not sure whether it is the right way for me to do so, is there any legal impact?
Should the appointed solicitors of the insurance company accept service of the Writ of Summons on my behalf instead of me? What are the possible consequences if the issue is escalated to Court? Can I get back my insurance premium if I have to present in the Court and compensate the third party? Who should pay the legal charges?
BH
REPLY
Your insurance company is required to handle the third party claim. After you have informed your insurer about the accident and notified the third party about the identity of your insurer, there should be no need for the lawyer acting third party to harrass you with these matters. I suggest that you should lodge a complaint with the Law Society and let them decide if the lawyer is acting in a professional manner.
It is all right for you to accept the writ and pass it to your insurer to handle the third party claim. Your insurance company will pay the legal expenses as well.
Thursday, June 19, 2008
Products that give poor value to consumers
Some life insurance companies design complicated products that are difficult for the consumer to analyse.
It is easy for the agent to get the consumer to buy the product, as the agent can make a misleading presentation of the product. In some cases, the product is designed to take advantage of the ignorant customer.
After buying the product, the consumer is stuck with it for 20 years or longer, as they have already incurred a large upfront cost.
I hope that the regulator will look after the interest of the consumers and disallow these types of poor value products from being marketed to the general public.
My advice to consumers: Avoid all these types of complicated products, as they are likely to give you a poor return. Do not trust any company that market these types of products.
It is easy for the agent to get the consumer to buy the product, as the agent can make a misleading presentation of the product. In some cases, the product is designed to take advantage of the ignorant customer.
After buying the product, the consumer is stuck with it for 20 years or longer, as they have already incurred a large upfront cost.
I hope that the regulator will look after the interest of the consumers and disallow these types of poor value products from being marketed to the general public.
My advice to consumers: Avoid all these types of complicated products, as they are likely to give you a poor return. Do not trust any company that market these types of products.
A complicated product, with low yield
Dear Mr Tan,
I brought a 25 years anticipated endowment plan from P in Year 2003. This plan with monthly premium of S$137.67 allows annual cashback of S$1,000 (from 2nd year onwards).
The guaranteed surrender value start from S$1,000 on the 2nd year and increased up to S$1,413 on the 15th year, and then decreased to S$1,000 on the 25th matured year.
The Non-guaranteed surrender value start from S$110 on the 3rd year and increased up to S$24,811 on the 25th matured year (based on 2.78% projected investment yield to maturity).
I have done a quick calculation as follows:
Annual Premium = $1,652.04
Total Premium paid for 25 years = S$41,301
Total Cashback received (from 2nd years onwards) = S$24,000
Guaranteed maturity benefit = S$1,000 (5% of sum assured)
Total guaranteed benefit with total cashback received = S$25,000
Total Non-guaranteed maturity benefit: S$24,811 (based on 2.78% projected investment yield to maturity)
After 25 years, if the 2.78% projected investment yield to maturity is met, I will only received a total of S$8,510 after deducted the total premium paid, or even lower if the actual investment yield decreases.
After coming to 5 years of enforcing this plan, I have realised that I may have make a wrong choice to buy this policy as the returns seems rather low. I would like to seek your advice on the followings:
1) Do you think I should continue with this plan till 25 years?
2) What plans are there with better guaranteed returns?
TY
REPLY
I find it difficult to analyse this complicated product. The maturity benefit is uncertain, as a large part is not guaranteed. I also do not know what is the loss that you have to face, if you decide to terminate the policy now.
If you decide to terminate the policy, you can buy a decreasing term insurance policy for the insurance protection and invest the difference in a low cost investment fund. Read this FAQ:
http://www.tankinlian.com/faq/savings.html
I brought a 25 years anticipated endowment plan from P in Year 2003. This plan with monthly premium of S$137.67 allows annual cashback of S$1,000 (from 2nd year onwards).
The guaranteed surrender value start from S$1,000 on the 2nd year and increased up to S$1,413 on the 15th year, and then decreased to S$1,000 on the 25th matured year.
The Non-guaranteed surrender value start from S$110 on the 3rd year and increased up to S$24,811 on the 25th matured year (based on 2.78% projected investment yield to maturity).
I have done a quick calculation as follows:
Annual Premium = $1,652.04
Total Premium paid for 25 years = S$41,301
Total Cashback received (from 2nd years onwards) = S$24,000
Guaranteed maturity benefit = S$1,000 (5% of sum assured)
Total guaranteed benefit with total cashback received = S$25,000
Total Non-guaranteed maturity benefit: S$24,811 (based on 2.78% projected investment yield to maturity)
After 25 years, if the 2.78% projected investment yield to maturity is met, I will only received a total of S$8,510 after deducted the total premium paid, or even lower if the actual investment yield decreases.
After coming to 5 years of enforcing this plan, I have realised that I may have make a wrong choice to buy this policy as the returns seems rather low. I would like to seek your advice on the followings:
1) Do you think I should continue with this plan till 25 years?
2) What plans are there with better guaranteed returns?
TY
REPLY
I find it difficult to analyse this complicated product. The maturity benefit is uncertain, as a large part is not guaranteed. I also do not know what is the loss that you have to face, if you decide to terminate the policy now.
If you decide to terminate the policy, you can buy a decreasing term insurance policy for the insurance protection and invest the difference in a low cost investment fund. Read this FAQ:
http://www.tankinlian.com/faq/savings.html
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