Tan Kin Lian's Blog: Survey on Orphaned Policies

Sunday, May 30, 2010

Survey on Orphaned Policies

Dear Mr Tan,

Thank you for referring your readers to my "Orphaned Insurance Policy" poll. The 2-minute-only poll is still open and they can help out if they haven't. The updated results, charts, and comments are available at:
http://cliftonphua.blogspot.com/2010/05/updated-results-from-orphaned-insurance.html

Below is my take on results from the first 40 respondents.
(1) Respondents are mostly over 35 years old with 3-8 policies.
(2) More than 4 out of 5 Singaporeans have at least 1-2 orphaned policies.
(3) Most orphaned policies came from AIA, Prudential, and NTUC Income - the most established insurance companies in Singapore.
(4) Original financial advisor usually left without giving reason, joined another insurance company, changed career or retired - fair enough, this happens in any company and industry.
(5) Out of those Singaporeans with orphaned policies, only about 1 out of 4 of their new financial advisors have contacted them. 1 out of 8 have assisted them before and to very little satisfaction. In my opinion, this is an unacceptable service level. Policy holders don't seem to care… only until something rare but dramatic happens…
(6) Usefulness of financial advisors is questionable
"It's good to know about what you bought. I've no problem living without an adviser as I have find out more than enough information / procedures should I need any form of service or claims. It makes no difference with or without an insurance adviser."
"This is to be expected. No stepmother will treat you better than your real mother. It is wishful thinking that the orphaned policies will get better treatment from the new agent since the bulk of the commission is already given to the original agent. It is time that a separate channel be made available for people to buy policies without going through agents since they do not add value anyway nowadays."
(7) Commission-only incentives for financial advisors are evil
"It is a shield (medical) plan, the company could have assigned a new advisor but didn't. probably because the premium is small and the new advisor will not get renewal commission."
"The new financial advisor is only interested to generate new sales for herself."
"Commission-based selling is the culprit!"

Clifton Phua

9 comments:

Anonymous said...: You don't need product peddling insurance agents..They don't add values. They often tell you you need them when you make claim. Do we need them? Does that mean the company will not entertain claim without agents? Is that what we pay high commission for?
Insurance agents will call to see if they can sell you anything. If they can't it is goodbye.
Product pushing is dubious and it short changes you.Agents only interested in the commission. They are not qualified how to add value.
Why pay commission for filling up the proposal forms for you and submitting your applications? Some are worse they only provide execute only service.; May 30, 2010 11:01 PM
Anonymous said...: I do not have orphaned policies but I "sacked" my AXA agent because she didn't followup on my requests and even provide me the wrong info. I met the COO (she had since left the organisation) to settle the issue and has been assigned a new agent who is more responsive than the earlier one.; May 30, 2010 11:38 PM
Anonymous said...: It's high time Singapore has online website/portal offering full transparent access to all the available life insurance products from the various companies. This will bypass the agents / consultants and operates on a DIY supermarket basis, with no commissions payable, and maybe with just a minimal 1% or 2% administrative fee to the website. The actual Benefit Illustrations and all the Terms & Conditions for all the policies should be easily generated thru the online portal.

Most of us with diploma & above education are well able to decipher and understand the BIs, T&Cs and product summaries. It's also a big BS that you need agents to claim insurance for you -- I've helped my older relatives claim for hospitalisation, specialist follow-up, death and/or critical illness, mainly it's becoz they're not good with english language.

As for agents being there to help you claim -- this is an even bigger BS. I've personally heard from agents' mouths that they hate doing such no-money work, even though they have pocketed 2 years' worth of premiums as commissions. 1 agent even complained about a client who needed help with claims after 20 yrs. This agent said that after so long it should no longer be his responsibility to hand-hold the client! So much for being a so-called trusted "long-term" agent.; May 31, 2010 1:56 AM
Anonymous said...: I wonder what MAS is doing despite so much complaint against the insurance agents. I wonder if MAS is protecting the insurance , the agents and the banks at the expense of consumers.The insurance agents are useless , they can't plan , advise and they push products that benefit them with high commission.
Those million dollar round table (MDRT) agents only sell wholelife and endowment products to become MDRT or COT or TOT.These are high commission products but these products short change and condemn the consumers to pay the high premium for life but with low protection and return. You can be sure the next time you can't afford another wholelife you will be abandoned or orphaned.
MAS must stop this nonsense and ban commission as means of paying the agents. Commission is not fair. The agents are over paid. They only help to fill the forms and submit the case and monitor until documents issued and get paid so much? Ridiculous...when many of them are not qualified in finance or insurance. They are only salesmen and women pushing for commission just like all other salesmen. Chances are they are conmen and women too and insurance agents are highly suspected conmen and women who con, lie and cheat to sell only products that benefit them.
Ban the commission . Set up portals so that consumers can buy directly without the INTERFERENCE from the middlemen who screw up and waylay you.What advice can agents provide.. only product advice which you can get from brochure, website and this service deserves a low commission , maybe 2% or 10% for first year for all the running. This is a lot already.
Commission is the root of all evil things done by insurance agents.; May 31, 2010 9:36 AM
Ron said...: Is it possible for all those who have posted about their dislike of insurance agents, to discuss the feasibility of setting up a website to sell insurance direct?
Mr Tan or anyone who has the time could chair and steer the process

It could be a "not for profit"
and employ retirees,PMET who are jobless and are interested in managing the site or the business.

Since the large insurance providers are reluctant to offer this service and MAS seem to be unmoved, we can be catalyst of change.

Who knows, it could lead to a new dawn. There are lots of issues to address: business registration, initial capital,pro-tem committee,
licensing of financial products.
Well, we could still buy policies from the companies and resell them.
I dont know, I am not in this industry, but there seems to be lots of unhappy people.

Lets put all that emotion into practical use and solve it as a team.. otherwise, we are all going round in circles without a head.

It appears that there are very knowledgable people here as regards to insurance.. lets make the first mover advantage.

Anyone?; May 31, 2010 12:40 PM
Anonymous said...: First thing first, tell your friends ,relatives and your neighbours NEVER to touch PAR products, ie, products which claim to have a saving element.
These products are whole life, endowment. anticipated endowment disguised as cash back , limited payment wholelife and limited payment endowment and not forgetting regular ILPs in all shapes and forms.
These are toxic products which steal your dreams and goals and your freedom. Be careful of lies of insurance agents about FINANCIAL FREEDOM. These products don't give instead they steal. How could you have financial freedom when these cheats take so much from you in premium and in return give low protection and miserable return(LIA has proof of it). So you see, these agents and the companies dare to lie without batting an eyelid and talk about financial freedom, live life to the fullest and all the craps when they are not truthful.They even dare to say honesty is the best policy or transparent when they hold back so much material information critical to decision making. We are now dealing with trained and certified liars who beleive that telling lies loudly and more often they will soon become truth.How could they tell you the truth when they are NOT qualified in finance and insurance? How do they sell then? Lies and conmanship aren't they? There are now many insidious products that will destroy your financial life and physical life.They are disguised as 'NEW" and "REVOLUTIONARY' products but the truth these products benefit the agents and the company. Consumers are fools and suckers to trust their insurance agents. I challenge consumers to look into their cache of insurance policies and have them reviewed by HONEST AND COMPETENT financial advisers. Competence and honesty are NOT sincerity, caring, very obliging, helpful, trustworthy, booking a hospital bed for you or getting you admitted into hospital or visit you when you are sick? etc. They are certainly good but they are no SUBSTITUTES for Honesty and competence.Without competence and honesty it is disastrous and many policyholders are in this situation.
Get a reveiw from FISCA before it is too late.Don't wait until 20 years later to discover your insurance agents are shits and you have load of shit insurance in your safe box.Shits won't turn to gold even kept for 100 years.Look into the box and to discover that the insurance agent you kept and trusted for years turns out to be a wolf or a python snake in your chicken house.
Do it NOW.; May 31, 2010 6:42 PM
Clifton said...: Ron,

There needs be a feasible plan and a strong team to get MAS approval and convince the larger insurance companies to work with us.

If such conditions exist, I can contribute some IT expertise in the form of Web programming and in building an insurance search engine.

Clifton; May 31, 2010 9:56 PM
Anonymous said...: Orphan policies - now with people buying from financial adviser reps who are tied in to FA companies, it created more worse problem. These FA firms thinks they own the policies and they keep all orphan policies because of commissions and does not allow change of agent. This is ridicilous, afterall the client buy from the insurer and not the FA Firm. Insurance companies also scared and need to seek FA Firm permission for change of agent.
MAS is aware, just that no one dare to use the initiative to look into these areas. Maybe they think, why rock the boat and creat more problem for themselves. Lets keep quiet about it.; June 02, 2010 6:18 AM
Anonymous said...: The problem is with MAS..As a regulator I find it is useless compared to UK, Australia and US.They are pro consumers. Consumers' interest is first. Without consumers there are no banks or insurance companies, they have forgotten this.
As put by HKMA, the financial market is created to serve the consumers to meet their needs and NOT to let insurance agents rob consumers and earn huge commission to live a luxurious lifestyle, buy big cars, buy condo etc or to let CEOs splurge and squander money on themselves and agents on overseas trips.
Currently it seems so that the financial market is created for this purpose to let these people live high at the expense of the man in the street. The poor are supporting the insurance agents and conmen and women , the insurance ceos and bankers to live off their miseries and hard earned money.; June 02, 2010 7:59 AM