Tan Kin Lian's Blog: Act in the interest of consumers

Tuesday, December 11, 2007

Act in the interest of consumers

Dear Mr. Tan,

You spent three decades promoting insurance. You are now posting anti-insurance articles in your blog. Why?

REPLY

I do not wish to be anti-anything or anti-anybody. My purpose is to educate the public, so that they can make the right choice for their future.

In recent years, the right choice is:
1. Buy Term insurance to provide the protection
2. Invest in a low cost fund, for its flexibility and better return
3. Avoid buying unneccessary insurance.

I hope that insurance advisers will remember your duty to give the right advice that is beneficial to your customers. Do not sell them the wrong products that make them poorer. Do not enrich yourself at the expense of your customers.

During my past three decades as head of NTUC Income, I have always promoted products that are good for consumers. Even the endowment and whole life plans that were promoted during my time give 15% to 20% better value to consumers, compared to similar products in the market.

Someone commented that I worked hard to strick a balance between the interest of the consumers and the need for advisers to make a living. During my time, the advisers can hold their head high, that they have acted in the interest of their customers.

Today, there are insurance products that are good for consumers, including the Flexi-Link and i-Term that are marketed by NTUC Income (introduced during my time). There are other good investment products in the market, such as low cost unit trusts.

8 comments:

Anonymous said...: We used to hear of churning and replacement of policies to buy another policy.We hardly hear them now but lately we come to know of a new twist or rather new form of "replacement".
The latest is BUY ONE GET ONE FREE.
How do you think this works? Buy a policy and the cash back is used to buy another policy.
Buy a revosave and use the cash back to buy a 20year limited premium living. The limited premium living is FREE or is it free? What is consequence? Are the client's benefits enhanced? or He is worse off.
This is the creativeness or cunningness of insurance agents and is it done in the interest of the client. Or for the interest of the agents, 2 high commissions.
Can someone comment. What do you think of the integrity of the agents?; December 10, 2007 9:48 PM
Anonymous said...: The company and the agent benefit at the expense of the buyer.
2 commissions for the agent
2 policies for the company
2 losses for the buyer
Integrity? Ethics? I think i leave them to others.; December 11, 2007 12:06 AM
Anonymous said...: This is the kind of stuff we get to read.If not for Mr. Tan's blog we would not have been aware of these malpractices that are going around in the marketplace.
There has been no anti insurance postings by Mr. Tan. In fact there were occasions Mr. Tan chided the posters of negative comments about insurance agents. But if there was a need to expose the insurance agents Mr. Tan did in a balanced manner.I believe his blog is to educate so that the buying public will have the necessary information to help them make informed decision.
You know marketing and selling techniques are very powerful and they can be abused. As you can see from the many useless products that we all bought. Look into your stores.
Likewise we can be swayed by glib tongue insurance salesmen and women.
I suggest that you should have your insurance and investment policies reviewed by a third ,independent party who is qualified.This is to identify and flush out the rubbish you have. You might have bought an unsuitable product, have wrong investment, underly insured or overly insured. You might not know that you aRE HEADING NOWHERE financially; the agent you use might not be qualified despite 20, 30 years experience.
So getting a third party review will set things right early before it is too late.
So you see, the postings here help to alert us of things that we didn't know or the agent didn't tell us.And we want frank and honest postings that don't mince words. In short we want truths. In the process the insurance agents are hanged and shot if they are found to have hidden the truth, or to give falsehood, to cheat and lie or incompetent.
I hope we view Mr. Tan as a boon and not bane to us visitors.I believe we all know a little bit more about finance now.We must thank Mr. Tan.; December 11, 2007 10:04 AM
Anonymous said...: Dear Mr. Tan,
How about whole life policies bought during your time, but now that you have left the company, are they still giving good value? I do not trust the present NTUC Income, but by giving up the policies, we will lose, isnt it? I will certainly not buy any more endowment policies now but what about those I have bought more than ten years ago? Can the new management change the rules just like that and cause us to lose? I need the answers as I am contemplating giving my policies up.

Thanks; December 12, 2007 12:31 AM
Anonymous said...: I agree with comment #3. Some IFAs will give you a verbose and confusing reply full of legalese when asked with a simple question. Just look at some of the replies from the self-promoting IFA on the sgfunds forum!; December 12, 2007 4:26 AM
Anonymous said...: How could the agent act in the interest of the client by asking the client to pay for another insurance with the cash backs from revosave?
Common sense tells you that the client is paying 2 times the commission.
it is unethical.; December 12, 2007 9:17 PM
Anonymous said...: Mr. 12.31am, if you have held it for 10 years and has broken even or about to break even, i would recommend that you surrender and reinvest the proceed in an investment linked or unit trust and continue to invest regularly. Of course your investment should be in a globally diversified portfolio. Over the long term you should be able to get 7-8%.
Don't jump from the pan to the fire by putting it into another endowment disguised as something else.Today, the agents are desperate and callous that they would say and do anything to sell you a product with high commission.
I am saying that you can be caught off guard with distraction. The insurance salesmen are good at waylaying you.; December 12, 2007 11:44 PM
Anonymous said...: In the corporate world people are encouraged to be whistle blower. Why not also have it in the life insurance industry. Report the errant insurance agents and companies if you find malpractices and unfairness or inferior products. The industry requires cleansing.; December 13, 2007 8:53 PM