A dishonest agent will tell his client that his company has introduced a new policy that offers better benefits, and get the client to switch to the new policy - allowing the agent to earn a fat commission again, at the expense of the client. Read this
article and avoid being fooled by a dishonest agent.
Old products have gone stale because the insurance companies CANNOT meet or finding hard to meet the obligation or the insurance salesmen need some new products as an excuse to call their clients up. New products have to look new , right? So the insurers consulted their 'top salesmen' to come up with a product that is an 'enhancement ' of the old.(with lots of rubbish) and surprisingly consumers buy the story.
ReplyDeleteLike the limited payment whole life which is actually a scam product intended to con their old customers to switch to this so called new products.If one were to look closely at their features you can find you will be shocked that the return over the longer time is lower than the old traditional WL.
Yes, the return is better in the short run.. it is no surprise because you pay more up front and this means more is invested . But this 'high' cash value is depleted over the long run by increased mortality cost. So you see , their selling point is "you pay for 5 or 10 years and you are covered for life" . But did you hear the salesmen telling you " you pay more and you get higher return in the long run"? No...and worse lower return.
What I am saying the new products are so convoluted deliberately to confuse and also to hide the rotten core below the heap of rubbish 'new features'.
Beware....No new WL or endowment products are or can be better than the old ones because of the increasing cost or expenses of operation and the low interest rate environment.
Look at the effect of distribution and you can see the cost has gone up from 20% to 40% and it is still increasing. Cost and return are inversely related.