Here are some of the misleading statements used by insurance agents to sell life insurance policies to consumers. These consumers actually give poor values, but the agents were able to mislead the consumers by pointing out to the wrong figures and giving the wrong explanation to the figures. Most consumers were ignorant and easily "taken by a ride". Sometimes, the agent tell a deliberate lie. In some cases, they were new agents and were misled by their agency managers - and they sincerely believed that they were making a good recommendation to their friends.
www.tankinlian.com/latest.aspx
There are agents from ntuc still comparing their WL or revosave return to bank rates and which is banned by MAS. It is misleading because the riskiness is completely different.I wonder why there are no mystery shoppers planted by MAS to gather evidence against some agents.
ReplyDeleteSometimes it's a case of wanting to believe your boss or your mentor, as he appears more "experienced" and more "successful". The more educated agents ought to know better, but they let greed and business-minded rationalising cloud their ethics and judgement.
ReplyDeleteFrankly, most people with diploma or degree education should be able to read the BI and understand that the figures provided are merely "projected" and not guaranteed. The wording in the BIs also indicate that the projected returns are for the overall life fund, and not for your specific policy. E.g. It does not take a maths major to realise that the maturity value of a single-premium endowment is much lower than the 5.25% as stated.
I had previously sent email to both MAS and LIA saying that the BI should have a bold disclaimer to tell customers that the indicated yields (e.g. 3.75%, 5.25%, 5%, 9%) are NOT what the customer will get. And that the customer will in fact be getting LESS than the above yields, after deducting of costs and profit margins by the insurance company.
The response I got was basically non-response, with MAS tai-chi-ing to LIA; and LIA saying that the BI is already following best practices and is reviewed regularly.
Some dishonest agents will go about telling the mis-statements. If the consumer is knowledgeable and ask the right question, the agent will know how to bypass the issue and leave the case.
ReplyDeleteThe agent aims to catch the consumers who are not aware and can be taken for a ride. One killing is good enough to last for (say) a month.
This is like a burglar who tries to steal from a home. They may fail a few times, but if they succeed on one occasion, they will make enough to last for a while.
Stealing or cheating can only be stopped if the authority is prepared to act against it.
I remember the 'best kept secret' rates of return advertised by ntuc.
ReplyDeleteWhat do you think was the purpose?
It was to mislead the public that the new products by the new management will give the same rates of return as in the past. This is not true. if it not true it is a lie , right?
In UK, the FSA has banned such misleading statement of past performance . Past performance is only allowed if it is the NOT the main message of the ads but also be followed by a disclaimer in large bold prints.
For the case of ntuc the disclaimer should read like this " these rates of return were delivered during the tenor of my predecessor" or specifically 'in MR. Tan Kin Lian's time and are NOT indicative of the future".
Another misleading ad also by ntuc was about the "Honesty is the best policy".. How could they be honest when the ad about the best kept secret wasn't due to the new management, right? Claiming honesty when one is using someone's backside skin for his face is a bit thick skin and dishonest.
Another one about transparency by ntuc also ... What so transparent when the new BIs no longer has a page that shows the yearly yield or return of the product which the old BIs under Mr TanKL all showed.
Shy? embarrassing? Can bluff kids, lah. It is to cover up the poor returns so that the customers can be sold on all crap lifestyle bulls. The strategy is ' don't tell too much'...if asked also pretend and taichi away the question..this is called maintain silent strategy...but all this breaches the FAA, right ? The FAA calls for full disclosure...
So you see , the powerfool selling techniques is talk lesser the better...talk louder of the positive points....so much for transparency.
What about MAS? or where is the ostrich?