Friday, February 11, 2011

Better benefits on a new life insurance policy

Be careful when a life insurance agent recommends a new life insurance policy with better benefits, to replace an existing policy.
Find out from Ask Mr. Tan
http://tankinlian.com/admin/file.aspx?id=178
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2 comments:

zhummmeng said...

Consumers must realise that NEW products can never be better than old ones especially in wholelife and endowment. Remember that you buy these products for 2 reasons...either for protection or for saving.
For protection you want affordable, low cost so that you can cover your needs adequately and fully. Whole life and endowment products fail.
For saving the products must be able to return at least above inflation, ie above 3.5% and this only preserves your saving only. Wholelife and endowment fail.
Most new products have only new names and a lot of rubbish wrapped around the rotten core to con the public or to let the insurance agents con their existing trusting comatose policyholders.
The only way to improve the products in these areas is
1.reduce the commission to as low as 10% payable over 2 years. 2.Reduce the operating cost of the whole company starting with the CEO.
3.increase in interest rate
4.get better money managers to improve investment performance.
5. cut cost..
If the insurance companies cannot then the products are con scam products which shouldn't be produced to con the public and worse to enrich the salesmen and the senior managers.
I see very low probability of that happening.. Best is take charge of your own investment or employ an honest and competent adviser, not an insurance salesman, to help you.
Separate protection and saving is the key to adequate protection and wealth accumulation.
Don't be conned by insurance salesmen...remember this well and half the battle is won. Have an insurance salesman and you doomed from the start.

February 11, 2011 11:50 AM
Spur said...

This is the age-old trick in consumerism --- wrap up old things in new package. But for insurance and also the bank "savings" products this practice is even more unethical. Unlike your typical consumer products costing a few hundred dollars, insurance and other financial conjobs aim to tie you down for tens or hundreds of thousands of dollars. And over many years, 20-30 years.

Many salesman from insurers and banks are now pushing endowments as so-called ideal savings for retirement and education. They are taking advantage of consumers frightened of the stock markets, but not happy with miserable bank interest and don't know about risk management. The salesman are all pushing on the 5.25% column like as if that is the sure thing, and harping on 5% "cashback" and/or 3-generation cover BS.

Savvy consumers must demand these salesman to show actual records of endowments and wholelife that were bought 10 years ago. They will be shocked when they see how much all the endowments and wholelife are in the red, and how many more years required just to break even in nominal value, not even in real inflation adjusted value. Consumers will be shocked to see the big difference between the actual cash value and the BS that is being promoted in the BI.

February 11, 2011 3:08 PM

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