An independent financial adviser shared this view with me. Most insurance plans now have a high terminal bonus that is not guaranteed.
He finds it difficult to recommend this plan, as the policyholder can not be sure if he will get a fair return on the policy. The percentage of terminal bonus vary from one policy to another. The policyholder may wonder why some other policies are given a higher terminal bonus than his policy.
He has decided that he will not sell any life insurance policy. He prefers to sell unit trust, as it is more transparent and fair to the policyholder, and more flexible.
I agree with his views. It is best for the consumer to avoid all life insurance policies with high terminal bonus, unless the cash and maturity payouts are required to follow the "asset share" method, as adopted in Malaysia.
I agree with the IFA.But do the insurance salesmen think the same?
ReplyDeleteThe thinking is "if I don't sell, another agent will, I might as well sell" "If I don't rape the girl anyway others will, I might as well" You see, this is the thinking insurance agents have. They have no moral or conscience. They are worst than animals.
They will do anything, stoop to anything to make the sale anywhere any place , at roadside ,at roadshow wherever, disregard the customers' needs.
There is no ethics. All product are good so long they make money. "Terms are no good because customers don't like", this is the excuse.It is the consumers' business whether they benefit or not. Customers want, wah!!!not I want, wah. It is caveat emptor.
This afternoon I visited an NTUC branch and plastered all over was a slogan "Make insurance, make a difference". I thought to myself, isn't this slogan a bit anachronistic? The old slogan was better. "make life better" was Mr.TanKL's time. The old slogan was more all encompassing, holistic and it captured the spirit of personal finance and also ntuc's old mission was to make the life of the man in street better.
ReplyDeleteThis new slogan is so narrow in scope and outlook and definitely out of date and it doesn't augur well. But wait a minute, maybe this guy is still stuck in the era when he left the industry and he hasn't gotten over it yet.He is nostalgic and instead of skipping he wants to follow and feel the motion of the past as it should have been. But then, this can send a wrong message to customers as backwardness . On the other hand, it is if you look at from the products with retro sounding viewpoint.However this may be a boon to the insurance salesmen, they need not meet needs they sell and push only. They are also stuck in that era. It is back to the past for them too.
Indeed they make a difference, they make policyholders' life poorer and less insured. How not? The products are neither protection insurance nor investment products.They are crossed, hybrid, reshaped , neither here nor there.
Make insurance make a difference, money no enough, protection no enough.
Sometimes people will buy or do certain things even though they have been educated or know that it is no good eg gambling, smoking and those types of insurance Mr Tan described. This type of problem (psycho factor) very difficult to correct and may need other type of specialist help.
ReplyDeleteAvoid all form of participating policies from all insurers that intend to pay all kind of crapy bonus system. It is a big con job.
ReplyDeleteYou better off with buying term assurance and invest the difference.
David, you know why? Take for an example , revosave and vivolife of NTUC. Everybody knows that these products are screwed up in term of protection and return yet there are suckers falling for them like bees falling for honey. Yes , honey is an ingenious and beguiling ploy to bait the unwary suckers by the insurer. You observe the insurance salesmen avoid talking about the return and protection but play up on those dubious frills which are actually to cover up the rotten core.Of course with their glib tongue and gifts dangling the poor confused customers eventually succumb.
ReplyDeleteHow can you avoid them? Write off all participating wholelife and endowment from your vocabulary and remember terms are the best. You never worry about protection no enough because you can afford the low premium and you have real peace of mind.