Tan Kin Lian's Blog: Adviser is required to disclose and explain the charge

Monday, December 08, 2008

Adviser is required to disclose and explain the charge

Dear Mr. Tan

I wanted to terminate my ID2 and was told that I have to pay a charge of 15% of the premium for 5 years, making a total of 75%. I was not aware of this charge, which was not disclosed to me by the adviser. Is it true that I have to pay this charge? Is it a fair charge?

REPLY
During my time, I recall that the charge for ID2 is 15% for 3 years only. The total of 45% was much lower than an average of 150% charged in the market. I was not aware that the charge has been increased to 15% for 5 years. You can check with the adviser.

If you have not been informed by the adviser about the charge at the time that you bought the policy, you can lodge a complaint with MAS. The adviser is required to disclose and explain the charge to you, as set out in A5 of Q8 in this attached document from MAS:

http://www.moneysense.gov.sg/publications/guides_publications/Consumer_Portal_FAAGuide.html

11 comments:

Anonymous said...: All the charges should have already been disclosed in the benefit illustration. The illustrated "surrender value" column has already taken into the account of all exit penalties.; December 08, 2008 8:46 AM
Anonymous said...: I just checked, the latest ID2 worst case surrender penalty is still 15% x 3 years = 45%.; December 08, 2008 8:55 AM
Anonymous said...: You can lodge a complain against the adviser with the company and get all the refund plus some opportunity cost for non disclosure and other misconduct.If the company refuses lodge with MAS.; December 08, 2008 9:51 AM
Anonymous said...: Those who have been approached by ntuc agents for revosave and vivolife have to be careful too.
Remember this. THEY ARE DUMB AND USELESS PRODUCTS THAT WILL NOT MEET YOUR NEEDS ADEQUATELY AND AT LOW COST.
They will ANYHOW sell them to you. It is year end and ethics and conscience will take a back seat or throw to the wind.
NEVER , NEVER buy now. Delay buying insurance till next year.Next year is going to be though year. Don't waste your money.What if you lose your job or have your salary cut and you have to give up your insurance policies?
Think carefully before ntuc agents at roadshows or any where con you into buying these useless anticipate endowments, products that the mature markets(US< UK < Australia)are condemning and taking insurers to court.This is as good as scam.; December 08, 2008 12:13 PM
Unknown said...: probably the 'extra' 15%x2yrs is THE scare tactic to 'deter' withdrawal

then again its also possible its actually part of the terms of that specific agreement entered into then

AND OR these terms could have been 'updated' recently under that tiny end-of-the-booklet section called "Other Terms and Conditions apply"

the best is to refer back to that entity insisting the additional percentage, and 'ask' for a black white (even colour!) before forking over

DONT MAKE THE SAME MISTAKE TWICE; December 08, 2008 2:48 PM
Concerned said...: Why is it that we have so many cheats in our midst? Relationship Managers mislead their customers. Insurance Agents mislead their clients. All these happen more often in the financial industry where transparence is less opaque and is more difficult to detect. Compare buying structured products to a television, if a TV doesn't work or the vision is not so good, you can detect easily and ask for a exchange or refund. For Financial products unless you are a professional or somebody alerted you, you can be easily be mislead. The rampant cheats that is currently facing the industry lies with those institutions employing these RMs or insurance agents and who tolerant such unethical behaviour. MAS should be more stringent towards these institutions who tolerant such unethical behaviour amongst their staff. A heavy fine, publicity and suspension would do the industry a world of good.; December 08, 2008 3:08 PM
Unknown said...: Said this before, say this again AND AGAIN

Theres no such thing as Cheat

Theres just Naivety.

They are NEVER your problem. YOU ARE.; December 08, 2008 4:23 PM
Anonymous said...: Don't deal with ntuc agents.They are all product sellers. You are not going to get what you should get. Meeting your needs is just out of question. Why take the risk? You know what is go to happen.; December 08, 2008 10:35 PM
Concerned said...: If there is no such thing as Cheat, when why there is such a word in the English vocabulary.

Relationship Managers and Insurance agents who tries to obtain an unfair advantage, so as to induce them to buy over financial products through misrepresentation or failing to disclose material information are all CHEATS.; December 09, 2008 12:27 AM
Anonymous said...: Product pushers don't disclose. The intention is to cheat.; December 09, 2008 8:08 PM
Anonymous said...: Yes cheating is about hiding something from the buyers and telling the buyers the beautiful untruths to induce them to buy.
Non disclosure of of ID2 charges and other charges is tantamount to cheating. Product Selling and pushing is about twisting the truths to make the buyers buy a product that is beneficial to the seller.The benefit is HIGH commission.
NTUC agents are all product pushers. I dare ntuc agents to challenge this statement.; December 11, 2008 9:39 AM