Tan Kin Lian's Blog: Agent tried to sell high cost insurance policy

Sunday, February 07, 2010

Agent tried to sell high cost insurance policy

A consumer wanted to buy a Term Insurance policy under a Family Policy. She approached an agent who recommended a Whole Life policy (Vivolife), on the argument that the Whole Life policy provides a return on the premium. The comparison is not made on a fair basis, and the consumer was confused.

I asked the consumer to send the benefit illustration to me. I found that the Whole Life policy had a high "effect of deduction. The amount deducted represented more than 40% of the accumulated premiums - which is too high. Why should a consumer give away over 40% of the accumulated value of the savings to the insurance agent and to the insurance company?

Many consumers are still being given bad advice by insurance agent. To get an idea about the premium that you should be paying for Term Insurance, go and visit this website in America.

Tan Kin Lian

6 comments:

SGDividends said...: Hi Mr Tan,

I think you forgot to place the link!

SGDividends; February 07, 2010 10:49 AM
Anonymous said...: Vivolife is a scam product. Many policyholders were asked to replace their old living policy with this so called limited payment vivolife. This is unethical and illegal because there is absolutely no advantage except disadvantages to replace with a product that is inferior, low return and expensive.
Limited payment tern can also be done with an old policy but is it necessary? Limited payment term is NOT a benefit, it is a gimmick to fool consumers.Don't fall into this trap.If you are being asked to replace your old policy report to MAS for the misrepresentation.
It is churning and twisting a product and it is illegal.; February 07, 2010 1:53 PM
Anonymous said...: Hi,

Things are going back to normal e.g.

i) COE exceed $20,000
ii) GDP +ve this year
iii) STI index rebounced
iv) unempolyment goes down. Of course, people like me is not in the statistic as I am out-of-job since 2007.
v) PMI going up.

What's next? Good feeling is back. Election coming, minister pay going to increase soon and agents going to have a much easier time selling the products. After 1 year and 5 months, Minibond case is closed other than the private suit. More and more people are going to be cheated once the bank start to push the profit-at-all-course button.

Good luck everyone.; February 07, 2010 2:03 PM
Anonymous said...: many friends told me they were cheated in various ways. very sad. i never got cheated by insurance but big one in minibond and pinancle; February 07, 2010 2:55 PM
Anonymous said...: Nowadays you can never trust any commission-based agent, whether insurance or property, whether local co-op or international MNC. They are all out to squeeze as much money as possible for their own pockets.

It's easy to see. For insurance or investment, the consultants and RMs will almost never recommend the low-commission products. After you hear all their BS, ask them to list down the commission rates for all the products -- you can see for yourself. If at the beginning, you express interest in a high-commission product, they will not bother to explain the cost details but instead sweet-talk you into quickly signing the sales and T&C documents.

For property agents, they like to "close" deals as fast as possible i.e. high turnover means more $$$ into their pockets. They rather not fight for their customers to get the best price, but instead prefer to psycho or emotional manipulate their customers to quickly except whatever prices. A property agent representing a seller will rather "close" the case at $300K within 1 week than to spend 2 months of time, more advertising money, effort negotiating with potential buyers, in order to get $330K. And vice versa for agents representing buyers. Becoz at 2% commission, the difference is just $6600 versus $6000. Agents will rather pocket the $6000 for 1 week work than to slog for 2 months to get $6600.; February 07, 2010 4:50 PM
Anonymous said...: The insurance agents get more daring if a gift or extra commission is thrown in and they will go all out to con their own policyholders first and then passers by at roadshow.
This strategy is very popular with a local coop insurer. Of course, this strategy works wells if the company must also must have greedy agents and agents who are prepared to throw away ethics out of the window and flush their conscience into the toilet bowl.Having said that, the management knows and is exploiting it to the fullest and that the agents could come up with ruse from buy one get one free to trade your old living policy to 'pay 10 years only and be insured for life'.
What is behind this dishonesty and greed? C O M M I S S S I O N!!!!!!
The good news is MAS is mulling over this and will soon join others to ban commission from all products.; February 07, 2010 5:49 PM