Tan Kin Lian's Blog: Whole life Limited Payment

Thursday, September 04, 2008

Whole life Limited Payment

Hi Mr. Tan,

My friend, an insurance agent advised me that there is a new life policy where I only need to pay premium for 15 years. My present policy (which I bought from another agent before) needs the premium to be paid until I am 85 years old. She said that it is better to pay more and have the premium stop after 15 years. Should I stop the old policy and take the new one? I find the premium for the new policy to be quite expensive.

REPLY
Your agent is trying to "twist" your policy. Read this blog for an explanation about twisting:
http://tankinlian.blogspot.com/2008/09/twisting-is-bad-for-customer.html

You should lodge a complaint against the agent for this unethical product. Did the agent tell you that she is earning commission by selling the new policy to you? Did she tell you how much is the commission?

4 comments:

zhummmeng said...: Don't convert because it will not benefit you. You pay more and you might not afford the same coverage.
Remember that the limited payment product limits your cover and cash value.The agent earns a lot of commission from this.
Fortunately you come here otherwise you become a victim of twisting. Twisting is illegal and it benefits the greedy insurance agent.
Currently there is an twisting 'exercise ' going on by insurance agents who are unable to convince new clients to take up the limited payment WL and are resorting to twisting the old ones. There is an incentive trip awaiting them if they achieve a target and the insurance agents or "financial consultants" are stooping to illegal and unethical means to convince their existing policyholders to replace their policies. And insider friend told me it is rampant and is going at feverish rate as the contest is drawing to a close.
Nothing is stopping these greedy and unscrupulous and without conscience "financial consultants"
to satisfy their evil motives.
Don't become a victim of this dubious and illegal scam.; September 04, 2008 10:17 AM
Shana said...: I dont think it is justified to conclude a limited payment whole life plan as an unsuitable product for everyone, or that it is lousy and everyone should not consider that.

Every product has it purposes, and one product may be suitable to one person, but unsuitable to another.

If a person's main concern is a whole life coverage and he has the income to support the high premium of a limited payment life policy, and he prefer to 'bite the bullet hard' while he is young and has the capability to pay for such policy to ensure a life time coverage. Why not? Not everyone likes the idea of knowing that he still has to pay for an ongoing policy even when he retires. That may be the last thing on his mind.

It is certainly unfair to compare products when the variables are different. How do you compare apples to oranges?; September 05, 2008 11:04 PM
Shana said...: I agree that if you already have a whole life plan, then it does not make sense to cancel to purchase a new one.
The agent is trying to 'twist' here.; September 05, 2008 11:11 PM
kelly said...: i wouldn't ask my client to terminate the old one to get new one..

but getting a limited plan on top of a whole life one would be a good compliment, if the client is ok with the premium amount..

i don't think there are that many people out that who will be adequately covered with "just one whole life plan".

singaporeans are generally under-insured, as according to statistics.

Eunice's words do make sense. I personally do not like the idea of having to pay for insurance even though I stopped working(retirement).; November 02, 2009 1:35 PM