Life insurance is inherently good. It allows people to pool the risk of premature death and to save for their future needs.
It becomes bad when insurance companies and agents takes away too much of the accumulated savings (i.e. as much as 50%) to pay for expenses and the cost of insurance and gives a poor deal to the consumer. The actual cost of insurance in most cases is less than 10%. It becomes worse, when the insurance agent tells lies and half truths to mislead the consumer into investing their hard earned savings in a poor yielding product.
In the old days (i.e. prior to this century), most life insurance companies and agents acted honorably and deliver fair value to the consumers. Today, the situation is quite bad, and it seemed that many products are designed to rip off the unsuspecting consumers.
I wish to educate consumers and the practitioners, so that the practitioners realize that they are not doing the right thing, and will change their practice and make life insurance a good product for the consumers.
Tan Kin Lian
The huge wastage and expenses spent on incentives and bonuses by insurance companies are getting ridiculous. I believe this spending has gone up by at least 3X since the 1980s, even after adjusting for inflation. Even for the so-called social enterprise, they are sending a few hundred of their top-selling agents to Barcelona Spain and Bali Kuta beach for all-expenses paid holidays this coming March. In addition, fine dining and wining in expensive 5-star hotels is common *every* month. Who pays for all this? The social enterprise got their name right --- the costs are now all "socialised" among the policyholders.
ReplyDeleteI agree with you Mr Tan. From my perspective, nowadays the agents and companies only care about their profit, and not caring for the stakeholder's interest.
ReplyDeleteAgents will come and recommend plans to "help" us plan for the future, in fact tying us down for no good reasons. All so just to get their profit. And worse of all, when you need help, they seems to just disappear.