Term insurance to age 99

I wrote this letter to the Straits Times to comment about the comparison between whole life and term insurance to age 99. I said that this comparison is misleading to consumers. The Straits Times did not publish my letter.

www.tankinlian.com/latest.aspx
http://tankinlian.com/admin/file.aspx?id=339

The insurance agents used this type of comparison to mislead the public to buy whole life or investment linked insurance. It is disappointing that the Sunday Times used the same approach.

Tan Kin Lian

An unusual cautious view for 2011

Many people are predicting better times ahead. But this writer has sounded a note of caution. Read his views in SGEP.

http://www.ritholtz.com/blog/2010/12/10-reasons-to-be-cautious-for-the-2011-market-outlook/

WikiLeaks and Damage Control

While Singaporeans largely blame WikiLeaks,a minority is attributing the underlying cause of recent problems

to a “condescending attitude” towards friends and neighbours less successful than them. Read SGEP

SGEP

SGEP contains a selection of articles about the social and political issues in Singapore and other countries that have an impact on Singapore. It includes views of astute bloggers that are not found in the daily newspapers. Visit SGEP daily.

Project work for Family Life game

I need an artist to draw cartoons and an expert to create animated graphics. See details here: http://tankinlian.com/admin/file.aspx?id=337

Here are the details of the Family Life game.

High income and integrity

A young graduate is torn between the attraction of becoming a financial adviser, with the promise by the agency manager of 3 to 4 times of the typical earnings, and the knowledge that she might be causing harm to her friends and relatives. The agency manager had advised her to approach the people she knows and get them to switch to the investment-linked policy that is actively sold by their insurance company. She realized that this policy has a high deduction from the consumers.

She asked for my views on this important choice. Should she take up the job to be a financial adviser?

REPLY
The easiest way to earn a lot of money is to sell products that give a large margin to the seller (i.e. the financial adviser and the insurance company), but this must surely be at the expense of the buyer. There is no magic that can give a good income to the seller without harming the buyer.

Some new financial advisers do not know that they are doing harm to their friends and family members, because they have been misled by the agency manager. Some financial advisers know the truth, but they only take care of their own interest and do not bother about the people that they are harming.

It is easy to fool consumers to switch to a new investment-linked policy. I have seen many cases where the financial adviser tells half truths and blatant lies to an unsavvy customer, such as:

• They can earn 9% projected return (This is not true, as the 9% is just an assumption which is too optimistic in the uncertain environment today)
• The adviser does not tell the client that there is a big deduction that can reduce the yield of 9% to 4% or lower. If the yield of 9% is too optimistic, the net yield will be terribly low.

It is blatant dishonesty, but seem to be quite common. Many people are just taken for a ride. By acting dishonestly, the financial adviser can earn a high income, and the agency manager can also take a big cut. It also earns a big profit for the insurance company.

You have to decide for yourself which route you wish to take. It depends on your conscience. I believe that it is better to earn less, but in an honest way. You can also talk to your parents and get their advice.

Tan Kin Lian

Merry Christmas and Happy New Year