Tan Kin Lian's Blog: Regular replacement of policy

Sunday, February 17, 2008

Regular replacement of policy

Someone told this story in a speech. When he started work, he bought a life insurance policy from a large company.

The agent saw him every few years, and convinced him to switch to a new policy. The agent said that the new policy was "better". This was done a few times over the years.

Later, he realised that the agent took advantage of him. Every time that he changed his insurance policy, he lost on the past savings and cash value. Although he had paid his premiums for 20 years, his cash value is low.

Where did this happen? It happened in Singapore. And it happened to a well eduated person!

7 comments:

Anonymous said...: I said many times customers are stupid and clueless about insurance matters and investment.They can be educated, they also can be worse because they appear intelligent and won't admit that they are idiots. Sometimes i suspect that insurance agents know this and exploit it.
Just like NTUC agents will tell you it is the customers who want to buy revosave, they love the plan becuase they get back their money early. Wondering why they want their money back early and when it is their money in the first place.Wondering who is advising who. Wondering what is the role of this so called "financial consultant"? Advise or sell? It seems for these "consultants or insultants" they leave to customers to self advise.
If the customers know what is good or no good for them they should buy directly from manufacturers. Why pay the 'insultants" and be robbed in broad daylight.; February 17, 2008 10:54 PM
hongjun said...: This insurance agent should be blacklisted.

hongjun; February 17, 2008 11:37 PM
Anonymous said...: Wah, this is really like "daylight robbery". This kind of irresponsible agent really spoilt the image of other good agents.; February 18, 2008 12:22 AM
Tan Kin Lian said...: The large insurance company have many top agents who make adopt this practice as being "professional".

The agents earn the high commission again. The insurance company makes a profit on the surrendered policy. Only the poor customer is worse off.

This malpractice will continue, so long as it is profitable for the agent and the insurance company to operate in this model.

No amount of "ethics" will change the commercial reality.; February 18, 2008 6:06 AM
Anonymous said...: Mr. Tan, what about buying revosave and use the cashbacks to buy vivolife? Is it a good idea? One ntuc agent is promoting to me this idea. I am a skeptical that it will work . At the end of the day i don't recieve any cashbacks becuase they are clawed back to pay another insurance. i am actually paying 2 times commissions and not once. so i am wondering how can it be free.; February 18, 2008 10:26 PM
Unknown said...: Be discipline & jus stick to your guts & portfolio..do not be swayed easily..tat costs money!; February 19, 2008 12:43 AM
Anonymous said...: To 10.26pm, buying revosave to fund vivolife is seamless policy replacement in action. What an ingenuity of the ntuc agents. But I call disgusting milking the customers. In short: Ethics abused.; February 20, 2008 11:33 PM