Tuesday, September 18, 2012

Bad investment-linked policies

Most investment linked policies provide a poor return to consumers due to the high charges that are taken away from the savings. Consumers are not aware of this fact. They were told untruths about the projected return and were under the impression that they would get a much higher return than was actually the case. If you have bought an investment-linked policy, you should check the facts here.

Some investment-linked policies may be acceptable. Do you know the difference? Learn about how to tell the good from the bad policies.


Sureesh said...


Recently one insurance company is proposing to provide a yield based Single premium investment linked policy that pays 5% a year but only after the 3rd year the policy is in place. I find that only ignorant investors would buy this policy because if you were to invest in REITS directly you can get the 5% yield without having to wait for 3 years. Why should the investor give 3 years worth of dividend to the insurance company.

zhummmeng said...

ALL regular ILPs are bad investment plans because of the high charges and more than 160% commission that goes to the insurance agents. You notice why agents like to sell this type of plans . Because they are lucrative and easy to con unwary customers into buying this 'saving' with protection plan.
The victims are usually young people.
Because you can start with $100 young people find it easy to cough out this amount.Sometimes the young people are conned and shown how $100 can give them large coverage but NOT told the premium of $100 will NOT cover them for long.
The commission for a regular premium of $100 monthly is $600 annually in the first year .It is so easy to con young people into buying and selling 10 policies isn't difficult in a month.This translates into $6000 commission a month if the customers pay by credit card. Do you see why it is popular with agents? It is conjob because the customers aren't going to keep the policy for long when they find out about the charges and the very long break even.
Remember the Sunday Times exposed an agent from a local insurance company pushing to an old lady of 60+ a regular ILP which breaks even in 15 years time when the old lady is 80 years? And his general manager got no shame at all to defend him that his recommendation was suitable to the old lady? Walau!!! this is the kind of shoddy compliance we are getting from the insurance companies' management . It is scary, right?
MAS should know the management of insurance companies are colluding with their agents to fleece the customers. That is why they are fighting hard to get MAS to maintain the status quo for the industry, ie. to retain the commission model and not to move to fee based.It will be a big mistake if MAS accedes to them. This is betraying the consumers.This will send the wrong signal to the industry that MAS can be arm twisted into agreeing using the threat that many salesmen' rice bowl will be broken if commission is banned.This will be a sad day for the industry which promotes shoddy standard and perpetrates a practice that robs the man in the street of their hard earned money by incompetent, unqualified and unethical insurance salesmen and this is tantamount to filling the rice bowls of these unqualified insurance salesmen with ill gotten rice. Hope MAS will not be persuaded and fooled into abetting these self interested industry players to rob the people of Singapore of their financial goals and rights to responsible and competent financial advice.

zhummmeng said...

Commission must be reduced to a level where the insurance salesmen is fairly compensated for form filling,entertaining the clients, explaining to the clients about the products, seeing the clients and deliver the policy document and of course not forgetting the big deal claim filing on behalf of clients without which the clients will be at the mercy of the insurer.
What is the right commission to reward these salesmen for their important distribution work??? I reckon 30% spread over 4 (10,10,5,5) years should be the fair amount. That is a lot of money if they push wholelife, endwoment and regular ILPs).
The 3 tiered structure must be demolished forever.The managers don't deserve a cent. They teach their downlines the skills of pushing high commission products to benefit themselves.You won't hear a word about helping the clients to achieve their financial goals. If there is , it is to con them. They teach their agents to use confusing technical word like' legacy planning' to sound professional instead of saying planning for the dependents when you die. It is big bull, isn't it?
How to plan for the dependents? with wholelife,? with endwoment? Crap!!!!
MAS must demolish this multilevel
structure and ban commission to protect the consumers from these predators.
Mr. Lee Chuan Aik of MAS already said that if the role of insurance agents is to distribute products then there are BETTER and EFFICIENT ways of distributing them.

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