An unwary consumer was cheated by an insurance agent into buying an investment linked policy (ILP) with an annual premium of $40,000. She thought that she was investing $40,000 in a unit trust. The agent assured her that she would get a better return.
She did not know that the annual premium ILP would take away more than 1 year of her savings. She was not given the benefit illustration and did not receive the policy document. The half yearly statement showed by the insurance company indicated the fund value to be quite close the the invested sum, but the surrender value to be only 10% of the fund value. She did not understand what the surrender value meant.
When she asked the agent for explanation about what was happening to her investment, she received vague and evasive answers.
MAS relied on the board of directors and top management of insurance companies to have a process to govern the behavior of their insurance agents. It is not clear about what is required to be done. Surely, if someone buys an ILP with an annual premium of $40,000 and the insurance agent (and agency manager) is likely to earn more tan $40,000 in commission, an enquiry should be carried out to make sure that the customer is aware about the surrender charge?
If this is not happening, what is the MAS requirement for? Is it just to appear good? Is MAS interested to know the details of this case? Will their official, who is monitoring my blog, contact me?
Tan Kin Lian
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