Friday, November 02, 2007

Excessive charges on ILP

Dear Mr Tan,

I bought an Investment Link Product in 2001 and made an investment of $1,000. This investment has is being depleted by the monthly charges. If I wish to make a partial withdrawal, I have to incur a charge of almost 40%.

When I bought the ILP, I was only 19. Can the policy contract be binding on me? I was not informed that the investment would be subject to the fee deduction and the withdrawal charge.

When I asked the adviser, he said he did not know that the fees would be deducted from the investment. I am bearing the brunt of his negligence. Does it mean that as long as the clause is in the contract there is no duty for him to advise me personally?

Thank you Mr Tan, I really really appreciate your help.

REPLY:

I suggest that you ask the insurance company to give you a statement for the past 6 years, showing the amount that you have invested, and the charges that are taken out each year (indicating the type of charge).

This statement should show what you can get now, if you cancel the investment. If you pass the statement to me, I will try to see if the charges are reasonable or excessive.

You should also get a written statement from the adviser that he was not aware about the withdrawal charge, and that he did not advise you about it. If you have this statement, you may have a chance to get the insurance company to allow you to make the withdrawal without this withdrawal charge.

3 comments:

Anonymous said...

Regular-premium ILPs are 10x worst than structured products. It's very difficult to make a profit on a RP-ILP. At least, structured products are capital guaranteed.

Khiat Han Hwee Adrian said...

It is interesting that your adviser did not know about the charges.

It is disappointing to see such advisers around and I'm sure there are still such advisers around in all different companies.

Anonymous said...

The ID2 from Income is no difference. It is a lesser evil only but still high. Don't talk of traditional like revosave, endowment, theyr are even worse. how come? High commission to agents is ythe reason to motivate them. High commission only can motivate insurance agents and NOT CLIENTS' INTEREST AND NEEDS.

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