When a sales person tells you that you are investing for 5 years, be careful. You may be paying premium for 5 years but you may have to wait for 10 or 15 years for the policy to mature. If you terminate the policy earlier, you may have to suffer a large loss, maybe up to 50% of what you have invested.
The sales person may tell you that the policy provides a yield of 4.75%. He (or she) might be able to point out this figure in the brochure or benefit illustration. Be careful. This is the yield that is used to illustrate the projected benefit. It is the yield before deducting the charges, also called "the effect of deduction". After the deducting, you net yield may be only 2%.
The sales person may give you convincing explanation verbally. Be careful. The verbal statements are different from what is written in the document that you are asked to sign. And you are signing a statement that you understood what the investment in, and you actually don't understand how it works, because you rely on the verbal explanation. And the verbal explanation is likely to be different from the written statements.
The sales person may tell you that the policy provides a yield of 4.75%. He (or she) might be able to point out this figure in the brochure or benefit illustration. Be careful. This is the yield that is used to illustrate the projected benefit. It is the yield before deducting the charges, also called "the effect of deduction". After the deducting, you net yield may be only 2%.
The sales person may give you convincing explanation verbally. Be careful. The verbal statements are different from what is written in the document that you are asked to sign. And you are signing a statement that you understood what the investment in, and you actually don't understand how it works, because you rely on the verbal explanation. And the verbal explanation is likely to be different from the written statements.
Mr. Tan , since you have plenty of evidence against the conmen insurance agents, the banks and the insurers why don't them to MAS to take action. Anyway, the complaint against them has increased this year as reported in Business Times, higher than last year.
ReplyDeleteIt is time MAS seriously take punitive actions against errant agents and keep them behind bars and revoke their license to protect the public from being plundered by them , especialy at roadshows.
MAS, don't drag your feet and protect the consumers.
The 4.75% "is the yield before deducting the charges. ... After the deducting, your net yield may be only 2%."
ReplyDeletePerhaps the above statement must be highlighted (made compulsory) in those pages of documente you have to sign.
No way the insurers want to be transparent. If they do then they are telling the truth 'don't buy from us' , our return is rotten.
ReplyDeleteThat is why the BI is made as complicated as possible all truths can be buried deep below and let the stupid and unscrupulous agents tell their story to con the clients.
MAS must do something about all this...and don't wait until like Paris is explosive.