Wednesday, February 17, 2010

Switching between guaranteed and investment linked returns

Over the past years, insurance agents have earned high commissions by getting their policyholders to switch from guaranteed to investment-linked returns and back again.

When the stock market is hot, they tell their customers to move to investment-linked returns by enticing them with high projected values (which were not guaranteed). When the stock market fell, they tell their customers to move back to guaranteed returns.

Each time that the customer took the advice to make a switch, the insurance agents earn a high commission on the new policy that was sold. The customers were not aware that they were exploited and given poor financial advice. They were "taken for a ride", time and again.

An ethical agent will advice the customer to stick to the existing policies. They can invest additional savings in the new policy, rather than move the entire savings from an existing policy to a new policy.

If you have been misled by an agent using this technique in the past, you can send an email to kinlian@gmail.com

Tan Kin Lian
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3 comments:

Anonymous said...

Not just agents but bank staff are doing this, promoting those investment linked insurance products after structured deposits fell out of favour.

They will tell you that it is very good to invest in these products since savings and FD rates are so low. Of course many will be tempted. They thought oh, got insurance protection (must be a good thing!) and also potential investment gain, why not? And somemore they thought bank will at least be more ethical than self employed agents!

This mentality is why a lot of agents (bank or non bank) can close a sale easily. There is a market for these agents, because a lot of their clients have not been "educated" and hence been "sold" on the goodness of these products.

February 17, 2010 9:53 AM
Anonymous said...

Consumers are dump and many pretend that they know about financial products and insurance. Friends , it is not so easy as you think. This is the reason you got fleeced because insurance agents know how to speak your language. Insurance agents are equally as ignorant as you but they are good conmen with glib tongues.They sell what you want. This is easiest and they won't get blamed if things go wrong.

February 17, 2010 10:29 AM
Lim weiqiang said...

Hi ,

I like to ask about AIA platinum legacy insurance. An insurance agent told me the interest on return is 4.5% guaranteed for first 8 years. I m quite interested but I know there is bound to have a catch. Does anyone know about this policy to advice me further? All I was told is to put a lump sum of money with AIA and I get to enjoy $500,000 of coverage upon death and 4.5% guaranteed interest annually.

Please advice.

http://sgmoneymatters.com/news/category/insurance/life-insurance/

June 27, 2012 11:08 PM

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