Tan Kin Lian's Blog: Policy will soon be withdrawn

Thursday, January 31, 2008

Policy will soon be withdrawn

Dear Mr. Tan,

A NTUC agent is trying to sell my the Limited Premium Whole Life policy. He said that this policy will soon be withdrawn and replaced by a new policy that offers lower return to the policyholder. He asked me to sign before the deadline. Please advise me.

REPLY

You should compare each policy on its own merits. What is the cost of insurance? What is the return? Is there a better option to get the coverage? Do not buy a policy just because it will soon be withdrawn.

Generally, a whole life policy provides a poor return, due to the high upfront expenses. The insurance agent wants to sell this policy, to earn a higher commission.

It is better to buy Term insurance and invest the difference. Read this FAQ
http://www.tankinlian.com/faq/savings.html

13 comments:

Anonymous said...: If you didn't buy the old living plan why buy the new one? Don't be blackmailed and beguiled into buying either one. This is a trick.Neither one is good.In fact the new one is worser than the old one with higher commission for agents and lower return for you.
Limited premium plans are also known as limited coverage plan. Simply because to amply or adequately cover one's needs it involves a huge premium. Who can afford it? Inevitably most people buy lesser than their needs.Do the insurance agents care whether you have enough. Their sales pitch is " you pay for limited period and you be covered for life". Anything about you are covered enough? No,No,No!!
Do you need it for life? Again don't be conned into this . By age 65, you should free yourself from this burdensome mortality charge you still be paying from your accumulated cash value.The BOMB is here.Your cash value will be bombed out to pay your insurer, the ceo and staff.
Let's say if something really happens at this age, just get treated at "C" ward hospital rate with your medishield.Do you need a couple of $100K for treatment? The agents may cite an exceptional case to convince you that you need to have.Exception is an exception and is not a norm.
So friends whatever name the living plan goes by just take note of what i am going to say. Go for straight forward, plain, simple plan that meets your needs FULLY at very affordable premium for as long as you need. Distinguish between needs and wants, between protection and saving and you will be alright.
First thing first, get a qualified , honest and competent adviser who has your interest at heart.You can't compromise this.; January 26, 2008 6:55 PM
Unknown said...: rule #1: avoid whole life policy. the commission that the agents receive from selling Whole Life policy is somewhere between 10-20 times the commission from selling Term Life. Ask him/her to disclose the commission in writing.

rule #2: avoid any urgency. if someone in that company asked you sign as early as possible that means they are desperate for meeting sales quota.; January 26, 2008 7:28 PM
Anonymous said...: Don't fall for the dead trap. The sales pitch reminds one of the spear and shield salesman. The spear can pierce the shield and the shield is not penetratable by any spear, both promoted by the same salesman at different time.
In this case is the same sales pitch. The old living plan is better than the new plan, so buy now otherwise no chance anymore. Next month the same salesman will be promoting that the new living plan is better than the old plan. So which is better? Both are screwed up plans.One common feature of the plans is to make you pay high commission to the agents.
Beware of these glib tongue salesmen and women. They cannot be trusted.; January 26, 2008 10:44 PM
Anonymous said...: I notice that lately NTUC's advertisement is full of inane tag lines that bear no relation at all to the functions of the product. Usually this sort of ads aim to confuse and mis-lead so that customers can make no sense of it.
The revosave and now the vivo life, if you try to figure out what it intends to say you end up entangled.
I guess that is what the advertiser hopes to achieve by hiding the truth with inane words; January 27, 2008 4:47 PM
Anonymous said...: I heard this new plan has more features but are useless.The customer do not know that they have to pay. No wonder they say the return is low.Why buy this plan when it is meant for the dead?; January 28, 2008 11:35 AM
Anonymous said...: Yes , beware of the shield and spear salesmen and women. They will say anything. Black they say,white they say also.Old plan is good but before it is withdrawn. The new one will be better.Then why buy old one?
Last year there were 360 complaints against insurance agents. The banks had 358 complaints. Both are fighting it out to see who gets the most complaints. Now they are neck to neck.
While they fight it out for the honour of who is the worst and most unethical, let us give them a wide berth.; January 28, 2008 1:06 PM
Anonymous said...: The agent is doing you a good service by letting you know what's happening in the future so you have more options now.

If you decide to buy a whole life plan in the future, after the plan has been withdrawn, at least you cannot fault him for not letting you know.

now at least if you buying whole life policy you have two choices, instead of only one choice when the existing policy is withdrawn.

As to whole life policy and term insurance debate - this is long story and each side will say that they are right, as each of them have they own personal vested interest.

As an insurance advisor and salesman, I feel that as long as you know the differences between the two and know what you want, that's ok.

R.; January 29, 2008 2:07 AM
Anonymous said...: First I don't decide on my own whether I need whole life or a term.
I don't know. I am completely an idiot in so far as insurance. I expect my insurance agent who is supposed an EXpert in his or her field to give me sound advice. If that sound advice is given in the first place i cannot see why I need to be worry about insurance anymore
as I am already amply covered. But the problem they don't stress on having enough; they just want to sell whole life and this is where the problem starts.They even tell me to cover the short fall in the future. If this is a correct advice then I might as well buy all of them in the future because my agent doesn't expect anything to happen to me in the meantime neither they worry about it. I save money, especially whole life premium. Can I conclude that this agent has vested interest in whole life?
The debate between whole life and term, it is VERY CLEAR those who promote term think in term of the customers' interest . (low commission). Those who promote whole life are thinking of their pockets.; January 29, 2008 9:14 AM
Anonymous said...: The agent is not doing any service but service to himself or herself. It should have been done long ago and not until the plan is about to be withdrawn and start resorting to dubious means in the hope to sell the high com product.Good try!!!!If the agent was concerned he or she would have found the BEST solution and not a plan client could only afford a little or inadequately. Surely the agent knew the difference between the term and whole life. Knowing and not applying is even more despicable.Worse is choosing a product that benefits himself at the expense of the client, if that is what you mean "know what you want is ok"; January 29, 2008 12:10 PM
Anonymous said...: Mr. Tan,

Was the NTUC Income Limited Premium Whole Life introduced when you were still CEO of Income? If yes, can you give a comment why you allow such a bad product to be launched when you were in office? Is it because while in office, you have to ensure good revenue for the company and hence has to sell PROFITABLE product? If so, how can the public be very sure that your new "campaign" against your own company is not due to some hidden agenda?

(Not particularly to this product) WHen you were in office, why did you allow your company to sell endowments, whole life to the public and have the agent earn a big commission? You should have eliminated all participating products and fire all your agents.

Can you explain?

I like to bring to your reminder that your insurance agents were responsible in bringing Income to this level of success. Without them,you cannot never have achieved what you had achieved. Do not forget that your success was due to the hardwork of many AGENTS for without sales, you will have no salary when you were CEO.

For your information, I was not and I am not a NTUC Income agent.; January 30, 2008 11:50 PM
Tan Kin Lian said...: To the anonymous poster at 11:50 pm. I have covered this point on a few occasions in the past.

During my time, the Income agents sell products at a modest level of commission and were able to bring products at lower cost to the customers. This was an efficient means of marketing at that time.

The endowment and whole life policies sold by Income agents in the past gave much better value to the policyholders compared to similar products in the market.

In today's environment, there are more efficient ways for customers to take care of their financial future. I recommend that they buy Term insurance and invest the difference.

Agents can continue to make a living by acting honestly, giving good advice, in the interest of the consumer.; January 31, 2008 9:05 AM
Anonymous said...: I guess time has changed. What was good is no longer good.Interest rate was high but today the rate is dismal. The change must happen and the buying public must be told too about this change.We all know that the buying pubic is used to the name of endowment and whole life.Ask any man in the street, insurance is whole life or endowment.The cost and the low interest rate have taken out the competiveness of these products. They don't give good value anymore. The problem is they still pay agents same commission, therefore protection and return affected.
The best is to convince buyers that terms and investment are the best means to greater protection and wealth.; January 31, 2008 9:34 AM
Anonymous said...: This product was introduced in Mr Tan's time before he stepped down.

I believe Mr Tan would agree that this has gone down in history as a good product?; February 06, 2008 1:51 PM