Kum Weng Lai said:
(The policholders) can calculate their own return and arrive at the 4% conclusion. The real question is what recourse do policyholders have went they are told that this is the amount they will get after 21 years and the amount ends up being substantially less?
The insurance company has wildly exaggerated its claims, or it could have less competent fund managers, but the end result is they did not deliver on their projections and ended up giving a lower benefit for the client. Since the client depended on this money promised by the insurer, they are now facing a substantial shortfall. U do not address this issue at all.
Is there a complaint process through MAS? Is there a legal recourse through a lawsuit? I am sure this policyholder is not the only one that suffered. MAS takes a dim view of financial companies who promise one return and give deliver another. That's called fraud.
I am sure that all policies have a boiler plate caveat that returns are not guaranteed. But in this case, its not even close.
Seems to be a case of gross misrepresentation. If the client can find other insurers that manage to give a return of 6% or more during this 21 year time period, then it makes a much stronger case for them against their insurer.
At the very least, an ethical and moral insurance company should have informed all its clients years ago that their endowment policy will not be able to meet their initial stated target, so that they can make alternate plans to make up the difference.
REPLY
The complaint process is through Fidrec. Many policyholders have probably made their complaints to Fidrec, but they received the same reply - the insurance company did state that their projections are not guaranteed.
The insurance company did tell the policyholder each year about the bonus that were declared. The policyholder could have known that the actual bonus were lower than projection. But they did not realize it.
Even if the policyholder realized that the bonuses have been cut, they would be unable to cut their losses. The surrender values are very low. In most cases, it is better for them to stick to the policies to the maturity date.
Consumers can learn about a better way to invest their savings. I asked them to enrol for my talk, but they do not have the time. Who should be blamed?
Here is my next talk.
http://www.fisca.sg/event_det.aspx?id=18
(The policholders) can calculate their own return and arrive at the 4% conclusion. The real question is what recourse do policyholders have went they are told that this is the amount they will get after 21 years and the amount ends up being substantially less?
The insurance company has wildly exaggerated its claims, or it could have less competent fund managers, but the end result is they did not deliver on their projections and ended up giving a lower benefit for the client. Since the client depended on this money promised by the insurer, they are now facing a substantial shortfall. U do not address this issue at all.
Is there a complaint process through MAS? Is there a legal recourse through a lawsuit? I am sure this policyholder is not the only one that suffered. MAS takes a dim view of financial companies who promise one return and give deliver another. That's called fraud.
I am sure that all policies have a boiler plate caveat that returns are not guaranteed. But in this case, its not even close.
Seems to be a case of gross misrepresentation. If the client can find other insurers that manage to give a return of 6% or more during this 21 year time period, then it makes a much stronger case for them against their insurer.
At the very least, an ethical and moral insurance company should have informed all its clients years ago that their endowment policy will not be able to meet their initial stated target, so that they can make alternate plans to make up the difference.
REPLY
The complaint process is through Fidrec. Many policyholders have probably made their complaints to Fidrec, but they received the same reply - the insurance company did state that their projections are not guaranteed.
The insurance company did tell the policyholder each year about the bonus that were declared. The policyholder could have known that the actual bonus were lower than projection. But they did not realize it.
Even if the policyholder realized that the bonuses have been cut, they would be unable to cut their losses. The surrender values are very low. In most cases, it is better for them to stick to the policies to the maturity date.
Consumers can learn about a better way to invest their savings. I asked them to enrol for my talk, but they do not have the time. Who should be blamed?
Here is my next talk.
http://www.fisca.sg/event_det.aspx?id=18
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