Sunday, June 21, 2015

Bad experience with life insurance policies bought by the parents

This consumer had bad experience with the life insurance policies that were bought by his parents. 

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.



Anonymous said...

Insurance products are getting rotten in term of coverage and return.
If you are kiasu customer buy term insurance for protection and Singapore Saving Bonds(SSB) for saving in stead of endowment.The return and features are much better than the scam endowment.
If you are NS man buy Safra or SAF group term insurance. For medical, CPF Medishieldlife is sufficient if you are not fussy about wards.
If you are looking for rebate and discount and don't need advice there are 2 companies which give rebate for any insurance products.
The 2 companies ,Provide... and Fundminimarket, give 30% and 50% discount respectively on any life insurance products. And of course, there is also the no commission insurance portal you see advertised on bus and MRT ad panels.
Rebate is legal and a well known fact top insurance agents give rebate to stay at the top, like Top of the Table, Top of the Sky etc.
And if you are planning your life goals, please for own good and protection, don't engage an insurance salesman disguised as financial consultant or planner especially Executive Financial Consultants. You must know how this salesman or woman got this dubious title. They got it by selling and earning a lot of commission...well they claim by selling....but actually what they did is exactly how the agents conned your mother into buying those rubbish products that benefit themselves and not you or your mother. To be safe don't have anything, I really mean it, to do with them otherwise you will be very sorry. It may not be now but many years down the road and you will be shocked. These salesmen retire happily, have landed or condo properties and holidaying and seeping wine at exotic cities and YOU languish as security guard retiring and doing the midnight ghost shift.
Take heed and attend Mr. Tan's seminar at $30 at the most and you might save the $300,000 that might end up in the bank accounts of your so called friendly trusted insurance salesmen and women.
To further protect yourself....DO NOT AGREE TO SIGNING THE CONTRACT IMMEDIATELY...tell the agents to let you think about it and you seek second opinion ...and not from another salesman but from an honest and competent adviser...Dunno and not sure, go to the financial planning association and seek a qualified and certified adviser. It may not be foolproof but at least you can lodge a complaint for disciplinary action against the adviser if he or she fails you and they can be struck off the register and banned from practising.
The truth is there is no safe place for you. Educate yourself and is safer only because you might be your own worse enemy.

Anonymous said...

Yes, consumers should demand rebate from the insurance agents as condition to buy. The agents don't deserve the full commission. What do they give you? advice? selective product information at the most and the rest LIES.If not go to direct channels to buy free of commission.

Anonymous said...

Don't trust insurance agents at roadshows, whether in the malls, exhibitions,or MRT, bus terminus. If you stop to listen to them you will be in big trouble. These are so well trained that they will say anything you want to hear and you realise they are all lies after you bought them. And you might have just 'bought' an electronic device, TV or a Ipad which you will be actually paying as part of the premium you will be paying. . So don't fall for this lousy despicable trick.
If the agents are so persistent and they harass you call in the police.
Selling life insurance is lucrative, so lucrative that it even attracted a PhD life science scientist to give up a high profile job for this low down begging job. What motivated him? No need a PhD to guess the answer.. It is the money that he could earn by conning people into buying those high commission products. This is one business that you can do anything . Have you heard of doctors, lawyers or accountants doing roadshow peddling their snakeoil services ? They can't , right? Then how to sell koyok? But are you surprised these people also can be found in life is the money, man..Money is the root of all evils? Yes, it makes people give up anything, do anything, say anything to get it.

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