1. What financial product did you buy
My parents bought 2 whole life insurance policies as well as a savings plan from 3 different insurance companies for me. These policies were cover critical illnesses, hospitalization bills and give small dividends of about $3000 every 6 years.
In the end, we still made a loss of about $12000 from each policy after cashing them out.
2. Was it good or bad for you?
We initially thought the policies were good since it gave plenty of coverage (critical illness, disability, hospitalization) for a premium of about $75 per month, back in 1995. However, the premium of each policy has since increased to be about $200+ per month. When we questioned the insurance company on why the premiums increased when we were promised back in 1993 that we would only pay $35 throughout the life span of the policy, the insurance company cited "market reasons" as the main factor for the increase in monthly premium.
My family decided to cash out on most of the policies during the 20th year in 2013, when I was 26 years old. We lost about $12000 from each policy.
The original agent who sold us the policy could no longer be contacted as she was no longer working in the company. Throughout the lifespan of some of the insurance policies, some our insurance agents were replaced several times by another insurance agent, making it very difficult to have a fixed contact person to look up to should we have any issues. Insurance agents in Singapore have no fiduciary requirement to their clients and therefore, can just ignore their clients after selling the policies to them. My mum even met insurance agents who became disinterested in answering my mum's questions after they had sold her the policies.
3. Would you have bought it, if you knew what it really was?
We would not have bought the policies if we knew that the premiums would increase by than nearly 10 times within a span of only 15 years!
Critical illness coverage is nearly useless for a young person like me because the chances of a young person contracting critical illness is nearly zero. If my mum had knew this, she would NOT have bought the policies!
4. Did you continue or terminate it, and did you make a loss up to now (based on the cash value)?
We terminated most of the policies in the last few years as we did not want to continue paying $200+ per month per policy. This was a very huge strain on our financial resources, especially during the period when both my parents were unemployed.
At one point in time, we even had to pawn some of our jewelery just to pay for the policies. The people running these insurance companies have no conscience and do not care about the welfare of their customers. They are only interested in getting their monthly premiums from common folk like us in order to fund their lavish lifestyles.
5. Would you like to attend a talk to learn about alternative ways to invest that are good for the buyers?
Yes, I would like to attend more talks to learn about alternative ways to invest. Do not trust anyone to invest for your money for you, especially when you do not know what they actually do with your money. In my opinion, learning about investment is a MUST for everyone.