Tan Kin Lian's Blog: Survey - Life Insurance policy

Sunday, February 01, 2009

Survey - Life Insurance policy

If you have bought a life insurance policy (i.e. whole, life, endowment, investment linked, or variation) during the past two years, you can participate in this survey.

Read the survey results.

25 comments:

Anonymous said...: Hi Mr Tan,

Just wanted to know why buying Insurance policies must go thru' an agent (Assuming that the potential policyholder knows what he wants and does not need the services provided by the insurance agent) whereas unit trust can purchase via on-line? (without any agent to represent).

Can the potential policyholders who wanted to purchase policies avoid going thru an agent and make the purchases directly thru the Insurance company.

In this case, the potential policyholders can SAVE a substantial amount by reducing the distribution costs.

Thank you,

YM; December 29, 2008 9:56 AM
Anonymous said...: The FSA UK will remove commission by 2011 as a means of remuneration. It will be substituted by fees.In other words insurance products will not carry a commission or a small nominal commission for product pushers or a deep discount.The consumers will benefit from this change by paying a fee and they get responsible advice at lower cost than the embedded commission.
Cost is inversely related to return. Higher cost means your return and protection is low .This is the reason today Whole life and endowment are NOT value for money.
The operating cost of the company has gone up very much, especailly when CEO asking million dollar salary, senior management paid 3 times higher than before and every staff demanding higher pay. Who pays for them? You the consumers. Cost is high, investment return is low, where can can you get value for money for whole life or endowment?
You must as well invest on your own by using BTITR.
Nowdays,to hide the low protection and return the insurance company covers up with a lot of rubbish like retrenchment benefit, annuity conversion, 3times death beneift from accident, and OTHER CRAPS TO FOOL the customers.Customers don't buy craps.The basic benefits to look at are protection and return.
These 2 will give the peace of mind.; December 29, 2008 10:14 AM
Anonymous said...: Insurance products should be available directly to savvy consumers
at a steep discount, commission free.
With or without insurance agents any difference?
Yes, you don't get screwed up by them.
No, you still get the product.
Hope there is a portal which sells insurance product without commission.; December 29, 2008 7:38 PM
Anonymous said...: scrap commission and introduce fees and let's see how creative but unethical insurance agents go around them.
If MAS enforces the need based under section 27 and remove the commission that will knock the last nail to coffin of product sellers and pushers.Hope they will be introduced asap.; December 29, 2008 10:21 PM
Falcon said...: Mr Tan tried to do that during his last few months in Income. He tried to remove the high commission by allowing policyholders to deal directly with the Business Centre. This is a good strategy that has two aims. One is to benefit directly the policyholder in terms of cost savings. The other aim is to stimulate and provide competition so insurance agents will try to improve their product knowledge and service standards in order to justify the premiums earned by them. Even I, an ordinary policyholder, can see that but the top management of Income cannot see that and succumb to the populist move to discredit Mr Tan as many powerful agents with links to the leadership lobby for his removal. It is the ordinary policyholders who are now poorer for it.; December 30, 2008 12:15 AM
Anonymous said...: Knowledge and skill ntuc agents are lacking. They could sell because of the brand name built up by Mr. TanKL over the last 30 years. Cooperative was Mr. TKL and consumers trust the name not because of the skill of the agents.Today, although ntuc is no longer a cooperative poeple still trust. Many people still don't know that the products are no more value for money. NTUC revosave is very expensive and return is so low and agents misrepresented them.
Now the new management is trying to call ntuc social enterprise.It is a big bullshit. It is no surprise that this new team is rewarding themselves with policyholders' money and refund them poor return.; December 30, 2008 9:15 AM
Anonymous said...: I did not know that NTUC Income is now no longer a co-operative. I thought it is still a co-operative but have a commercial CEO to do the dirty work.; December 30, 2008 4:40 PM
Anonymous said...: This foreigner is a big time product pushers. The new products rolled out by him are meant for pushing. Just name which product by him is useful as a financial vehicle to address financial needs. Revosave is rubbish. Which area of needs can revosave address? Maybe at the best diluted. It is a little of this and that..intended to deceive. Ask him and his senior managers and the so called financial consultants , salesmen in disguise, whether they buy revosave. I bet none maybe some idiotic consultants, the blur ones.
MAS must audit this company, everyone and the agents for mis-selling and misrepresentation.
I wonder how many victims who have their finances screwed up by them.; January 01, 2009 11:07 AM
Anonymous said...: Today the products are more expensive because the cost of operation has gone enormously.Every wants high pay.Who is paying for them?It is obvious the consumers.
The worst hit products are the whole life and the endwoment. They shouldn't be sold for a number of reasons, poor protection and return .
But they are the most popular with agents and the companies because they are lucrative. The suckers are the consumers who are saddled with long locked in, poor return, low protection and many other penalties.
Consumers should realise that these products are to be avoided and don't let insurance agents fool and cheat you into buying.
Those who bought them and have no idea how they work for you , should bring this up for review when Mr. Tan set up the association, FISCA. You will be shocked that you have been walking around with a time bomb because of your greedy agents who didn't put your interest first.; January 01, 2009 3:16 PM
Anonymous said...: NTUC is only cooperative in name.The agents are non cooperative. They only want to sell you products with the highest commission and not products that meet your financial needs.They are no longer caring and honest. The misrepresneted the products to make you buy, eg like revosave although they know the product doesn't help you and add value to your financial future.
The products are rip off without money for value and they are shoved down the throat of the man in the street because they are too trusting.
The management is high and mighty and has no touch with the ground. They dine and wine in high and posh places with policyholders' fund. They are good at wayang. The truth is they are hiding the truth.; January 01, 2009 5:53 PM
Anonymous said...: Mr. Tan, quickly set up the FISCA and help to review these people's policies to check if they were taken a ride by their insurance agents.
It seems more people are distrusting the agents. The insurance agents are getting bad reputation as being dishonest and unethical. But be careful, many have changed their titles to consultants. Example, the ntuc salesmen have changed to financial consultants. Some even have senior and executive to the titles. Anyway ,we know ntuc insurance agents are all product pushers. They can change to fanciful titles but they still can't consult or advise, so no point having titles like these.They can bluff other people but they can't bluff us.They can't hold a financial calculator how can they be called a financial consultant..This is misleading and misrepresenting. It is cheating and cheating is serious. MAS must know about this. I wonder ntuc informed MAS about the titles.; January 02, 2009 12:28 AM
Anonymous said...: Aiyah, so many good men and women has been warning the new policyholders not to buy these policies, but how many listen? For us old policyholders if no more people buy then our payout for our policies will be badly affected. Already they are losing so much money recently and coupled with their high dine and wine approach the returns are going to be worse from now onwards. Let these new policyholders buy lah, after all they are not our money. If more people buy then at least our existing policies will not be affected in payout that badly. Who knows, maybe if many many new policyholders buy then our returns will become better.
So please buy more so the new foreign management can wine and dine more and be happy then give us back more. Huat Arh!!!; January 02, 2009 3:31 AM
Anonymous said...: As you have said more money to them means more money to spend. Do you know it it sending a few hundred greedy agents to Goldcoast . The last time they spent 1 million to Ho Chi Ming. What do you think of the amount this time?
Anyway not their money but your and mine. After spending they can blame it on investment loss...Maybe another round of bonus cut..cut cut until no need to cut even during the worst time.
Some one was saying that NTUC no need to cut bonus next year when others might cut. BUt he forgot that ntuc cut 45% already much earlier than the rest.
But foreign managemnt is clever They make every body happy, the agents and the staff and whatever they do no one can notice, lah.; January 02, 2009 12:26 PM
Anonymous said...: So please new policyholders quickly buy more so our existing policies value will not go down to zero.; January 02, 2009 4:09 PM
Anonymous said...: What buy more? Stop buying and starve them to surrender so we can have quick change of management. If possible terminate your policies. We must keep trying; January 03, 2009 10:44 AM
Anonymous said...: looks like your money flying to Gold Coast in stacks. Your next year annual bonus is their year end bonus. Where got enough from new policies. It must be from life fund. Life fund so big a few million to go for holidays and wining and dinning wouldn't be noticed.Worse to the worse cut your bonus, hor.; January 03, 2009 2:16 PM
Anonymous said...: I will hold the ntuc ministers, Lim Boon Heng and Lim swee say responsible for ntuc income performance as they are responsible for ntuc organisations. They should know by now that the new ceo is a good for nothing foreigner and yet they still allow him to go his way. If ntuc income still continue this high spending way at the expense of its policyholders then come next election I will campaign for them not to be voted into govt.; January 03, 2009 10:56 PM
Anonymous said...: No . he earned through bending and exhibiting the karma yoga style.
he is a great actor; he is trying to follow somebody's style by shedding or pretend to shed tears to move the audience. People saw through his ploy
and he was jeered for using this low down insincere trick; January 04, 2009 7:05 PM
Anonymous said...: Mr. Tan , hope you revive the bonus issue with ntuc. You mustn't let get away with it. Ask for this year's bonus. Ask how much they have lost in the special bonus they cut from our annual bonus..
I have a friend who told me that the return from vivolife is only 2%+ after 35 YEARS.During your time it could give at least 4%.
Something is wrong..The cost is too high and it is eating into the protection and the return.; January 05, 2009 1:40 PM
Anonymous said...: With lot of splurging on posh hotel meetings, dine and wine and exotic trips overseas cost is definitely spiking. If raising money from new business to fund the these activities
policyholders are certainly taken for a ride. Or if raising money to pay annual bonus isn't it similar to PONZI scheme. Madoff should be consulted as he has so many years' of experience. He is the GURU of the PONZI scheme. Insurance companies can consult him if there is a further need to cut annual bonus or to restructure bonus.; January 05, 2009 8:08 PM
Anonymous said...: 1.25% for revosave after 25 years.
2% for vivolife after 35 years.
Don't you consumers know about this.
It is GUARANTEED LOSS... Were you told when you bought them? Are you aware that there more ways to address whatever concerns you have in mind? Now know waht you want is important . Is insurance you want?
How long do you want to insure? 99 years?
Is saving you want? How much return you want?
There is no such thing as one product to take care all of your needs. It is rubbish. You can see these products. Protection is diluted. Return is diluted.
Don't be conned. Don't be a sucker.
You neither get enough protection nor you get decent cash value.
Get your agents to DISCLOSE ALL THE FACTS.; January 05, 2009 9:45 PM
Anonymous said...: towards the end of the year mis-selling was rampant with ntuc agents . It was free rein for the last dash to qualify...for????; January 06, 2009 12:34 AM
Anonymous said...: High time to revamp existing commission structure, which encourages agents to "mis"-sell products which earn them more commission; instead of considering buyers' need and recommending a suitable product.
My agent was very persistent to sell me a high premium product, kept emphasizing high Cash Values. Even though I found out from other sources that there is a cheaper "Limited Pay" product which match my needs, my agent side-stepped and delayed offering more info on "Limited Pay".
I decided to talk to other agents instead. Luckily I asked around before buying.; January 09, 2009 10:24 PM
Anonymous said...: This is a good survey. It says a lot about wholelife and endowment products. Not just from NTUC Income but also from elsewhere.; February 01, 2009 3:24 PM
AIA BERHAD said...: I think that not all insurance companies are like that. For whole life insurance, we have to pay premium as long as we are alive until 100 years old.

The paying-premium-period is 100 years for a newly born baby. For AIA Berhad in Malaysia, the annual premium for whole life insurance with protection of RM 100,000 (fixed and guaranteed) for a newly born male baby is RM 452. If he can survive until 100 years old, all of his premiums in 100 years are just RM 45,200 (guaranteed). I am not promoting AIA Berhad here. I am just telling the truths, facts and figures.

So, under this case, do you think whole life insurance is a bad product? I don't think so. Whole life insurance is a very beautiful product. Why?

Firstly, whole life insurance has the second lowest premium rate and the second highest protection. Term life insurance offers the lowest premium rate and the highest protection. But, if no unfortunate event happens to a policyholder, he will get nothing after the term life insurance expires. That's why whole life insurance, instead of term life insurance, is always recommended to people with medium income as most people are affordable to buy it (high protection at the same time) and they are guaranteed to get back all or some of the premiums they have been paying, depending on how many years they have bought it.

Whole life insurance is mainly for protection. Its return is not high but guaranteed. I think it is fair as there is no such thing as a free lunch in the world. If you want high protection and high return at the same time, I think you should set up an insurance company like that yourself. Please inform me if you do so because I am going to buy one from you, seriously speaking.

Please remember that insurance companies are not charities. They are profit-oriented organizations. However, they must always pay their policyholders compensations for their illnesses diagnosed and injuries that are stated in their policy contracts.

For agents' commission rate of whole life insurance in Singapore, I am not sure. But, I am very sure that the commission rate of whole life insurance in Malaysia is 35 % for the first year and 110 % within 6 years. Some say that insurance agents keep pushing people to buy whole life insurance because their commissions are very high. I think it is wrong to say so in Malaysia. I myself bought RM 300,000 whole life insurance from AIA Berhad. The annual premium is RM 2,616 and I have to pay premium until I reach 100 years old. The total commission is RM 2,877.60 in 6 years, not one year. On average, one annual commission is around RM 480. Then, one month commission is around RM 40. So, do you think the commission is very high? It is only yes when an insurance agent sells a lot of this type of life insurance. In general, the commission rate is fixed at 35 % for the first year for most of the types of life insurance. Like what I have mentioned earlier, the premium for whole life insurance is the second lowest.

For my case (24 years old), I just have to pay an annual premium of RM 2,616 and I get death and disability protections of RM 300,000 (fixed and not influenced by the performance of the insurance company) if bad events happen to me. The annual premium doesn't increase in the future (guaranteed as it is stated in my policy contract). So, if I am an unethical insurance agent who doesn't care about my clients' insurance needs, I will not recommend them to buy whole life insurance. I will rather ask them to buy other life insurance plans which require much higher premiums and give me higher commissions.

If I died at 30 years old (touch wood), my family will get RM 300,000 in less than a week. After 6 years, I have just paid total premiums of RM 15,696. So, are there any other life insurance plans like that? I can say no for sure, except for term life insurance. But, term life insurance doesn't pay us any money if we are still alive when it expires. Whole life insurance at least pays us low but guaranteed returns. For my case, I plan to stop paying premium after I reach age 55 as I retire. My total premiums are RM 83,712 (guaranteed). If I surrender my policy during that time, I will get back RM 112,200 (guaranteed). All the features are stated in my policy clearly. The return rate is around 34 % after 32 years. It is a small number but if any unfortunate event happens to me before I retire, my family will get RM 300,000 (guaranteed) as an emergency fund. RM 300,000 is not a small sum of money.

So, my conclusion is:
i) If you emphasize on protection and don't care about return very much, whole life insurance is the best option in my opinion.
ii) If you just care about return, you should not buy whole life insurance. Instead, you are recommended to buy endowment plans. For most of the endowment plans, the premiums are higher as you have a shorter paying-premium-period like 8, 10, 15, 20 and 55 years, instead of 100 years. Their protections are lower. But, you can get back your money in a shorter time with higher return, but not guaranteed, and the sum assured increases from time to time, depending on the investment performance of an insurance company.
iii) If you want high protection and return at the same time, there are only two options you can consider.
a) If your earning power is very high, you can buy endowment plans with big sum assureds like RM 500,000. Then, you can get high protections and at the same time get high returns. Your annual premium may reach more than RM 120,000 if you are 24 years old. My main point here is if we want everything in the world, we must have money. It is the same to insurance. Do you agree?
b) If you are not earning a lot, then you should consider setting up an insurance company yourself which offers life insurance plans with low premiums, high protections and high returns at the same time. If you do so, please inform me because I want to buy one from you, seriously speaking. I will also ask my friends to buy it from you. If you are looking for insurance agents to do marketing, please consider me as I can't find any insurance companies that offer the same benefits like yours. I am very sure you can get a lot of customers.

I hope my words don't hurt any one's feeling who reads this comment. My main purpose of writing this comment is to create an awareness among all consumers that there is no such thing as a free lunch in the world. We can't have everything if we have limited resources (money). So, we must be realistic when we buy life insurance or other insurance plans like personal accident, 36 critical illnesses and medical card. We can't have high protection and high return at the same time unless we have a lot of money. If your insurance agents tell you that there is such a plan in your countries, then you must be careful.; February 27, 2009 2:02 AM

Sunday, February 01, 2009

Survey - Life Insurance policy

25 comments:

Blog Archive