Tuesday, December 14, 2010

Life insurance policies sold to elderly, illiterate person

I spent one hour talking to an angry person. His mother was sold 2 life insurance policies 15 years ago by an agent (a family friend) who told her a pack of lies. They had approached the insurance company a few years ago, but the matter was not resolved. He sought my help to advise him on what he could do now.

Honestly, his grounds are weak. It was 15 years ago. It was the word of one person (his mother) against another person (the agent). To make matters worse, the agent could not be located.

He felt that it was most unjust. He related on why the life insurance policies were sold to his mother, who was illiterate and unsavvy. He asked for my views, as the ex-head of a life insurance company, on what the problem was - that caused this type of unpleasant situation. Was it due to the fact that the insurance agent were not paid a salary and had to earn a commission by telling lies?

I tried to answer his questions, but he appeared to be not listening. I told him that it was unfair for him to now place the burden on to me. I did not cause this situation, and had no power to address it. It is easy for the people in charge, such as the MAS or the member of parliament, to close their eyes and ears to the problem. Maybe, I should also do the same?

Tan Kin Lian

5 comments:

  1. There is no consumer protection in Singapore, investors are better off investing in other countries, be it insurance or investment products. If not, invest in blue chips on STI, or in bonds, and later property. Property is too over-vlaued now as people are too scared to invest in bank products,
    the DBS High 5 Notes cast a shadow
    in people's physhe, so they chase property investments instead. But
    anything that goes up would come down some time later.
    Finally avoid all insurance products, even more if they are recommended by close friends and family members. Just buy health and hospital and surgery insurance only. Also avoid bank relationship
    managers and brokerage brokers.
    Trade online to avoid all contact with them. This is the best self-protection strategy.
    These brokers and bank managers are only out to make commission out of you, who cares whether you lose money or not.

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  2. Tell him to raise it in the press and target at MAS and the company.
    Should he take up a legal suit and dismissed by the court and waste a lot of money.
    The consumers must be aware that the recourse to recover your loss is very very slim in this environment.
    The only way is to take the law into your hand....stop buying life insurance.

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  3. The way insurance operated in Singapore is very funny. When you complained to the insurance company on the product sold to you, they will ask you to refer to your agent, i.e. the person who sold you the product. I stressed here the word "your agent". The seller becomes your agent, like your attorney or something like that. The seller may be your friend, your relative, your acquaintance or somebody you don't know at all. Any dispute the insurance company will ask you to refer to "your agent". Is'nt the person who sold you the product an agent or employee of the insurance company,etc and why suddenly it becomes your agent when there is a dispute.

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  4. If Mr Tan were to turn a deaf ear, it would be tragic. But alas, we may all just learn to respond or do not respond like our beloved Government !

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  5. To Concerned:

    Unsalaried and fully commissioned agents are not employees of their insurance companies. They represent them in sales procurement. The sales representative come with exclusivity, i.e. the agent can't represent other companies.

    Notice that an insurance application form is called a proposal form. The agent after convincing the prospect to buy, the prospect propose to the company, becoming a client of the company. The company covers both ends for their own interests.

    When it comes to ownership of clientele, the company claims that they're their clients. When it comes to servicing and disputes, the company claims that they're the agents' clients. Even the agency managers and supervisors aren't employees of the company.

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