Sunday, August 19, 2007

Getting more people to buy Life Annuity

I wrote an article on life annuity. It explains why there is a difference between the amount payable under an annuity ($523) and the amount payable by the CPF on its retirement account ($790). It also suggest how the gap can be narrowed to make the life annuity more attractive.

The letter was published in the Straits Times (Insight) a few days ago. You can read my suggestion in this article.
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1 comment:

Anonymous said...

I salute you for this bold proposal regarding annuity and that CPF should take on the responsibilty to provide the annuity. It is in the best position. It has the numbers and therefore pooling of risk to give the best payouts.Current annuity is miserable and paltry and it can't beat the CPF.
Income's annuity may be the best AMONG the insurers but the best is still not good enough when compared to CPF.
Your below posting about the role played by Financial Advisers and about clients' interest being often compromised because of greed.This is what happening. Income's agents
in their desperation to make a sale
never disclose what CPF actually provides. They often manipulate the sale process by giving half truths.They will tell the client that leaving minimum sum with CPF the payouts will run out and annuity will not. This is half truth.They never mention about the number of years and how much CPF pays. They talk about Income's annuity pays for life.They talk about theirs' being the best but never mention CPF.You see these are half truths
They also never do a proper check up, like asking family life expectancy history; the health of the client.
You be shocked to know that someone with heart problem or diabetese or other health problems ,be told that annuity is good for him because he is expected to live for very long, beyond 82 and therefore he may outlive CPF payouts. This is the kind of conflict of interest we hear, not just about annuity but with other products.
Mr. Tan, public education like this will put things in right perspective and you are the best person to do this job. We must clean up the industry of unscrupulous, unethical and incompetent insurance agents. The public must be educated to know who to go to when it comes to financial health check up and not to incompetent agents who impersonate as professionals and whose sole purpose and career objective is to make a lot of money without caring for clients' interest and needs.
You have a great role to make this change.

August 18, 2007 1:38 PM

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