Martin Lee @ Sg
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Misselling Insurance Plan

This is a classic case of mis-selling – providing a consumer with an endowment plan when he really only wanted cover for death.

Insurance payout falls short of expectations (Straits Times Forum)

Selling a pure term of $20k would have earned the agent peanuts. In this case, it is likely the agent knew what she was doing as she combined an endowment with a temporary term plan to give an impression of $20k worth of cover (at least for the first ten years).

She would have got away with what she did and everybody will be none the wiser if the insured had passed away in the first ten years.

While I sympathize with the buyer and agree that most of the fault can be attributed to the agent, I do think that the buyer also needs to bear some responsibility himself. As a buyer, he should look at the benefit illustration carefully before signing. If he had done that, it will be evident he was not buying what he had asked for.

It is possible that the agent is now no longer in the industry and the company concerned now has to clean up the PR mess.

Leave a Comment:

Singapore Man of Leisure says 10 years ago

This post and the ensuing comments are most stimulating!

It starts with finger pointing at agent, then a more “balanced” voice said not so fast….. Then ding dong a bit until it got pointed to MAS? But reason prevailed…..

If I don’t care about taking care of myself, why should I expect others will? (Taking personal responsibility)

But I do agree that buying insurance should not be left to the “luck” of meeting the “right” agent.

I can do my part by refering friends who have insurance needs to financial professionals I respect – like Wilfred. Note I never refer to the company, but a specific person. Like we say in NS – army is good; but it’s people that spoils it.

And to remind my friends that if we pay peanuts, we get monkeys! So focus on selecting their financial adviser wisely! Free can be expensive! While they are at it, they should interview at least 3 FAs before deciding. Again, focus on people first, not policy first.

P.S. I am not a client or associate of Wilfred.

Daniel P says 10 years ago

Would the original agent or replacement agent not have contacted the client about converting the 10 year term before expiry ?
I think agents like to talk to clients about converting their term into something that earns them good commissions, i find it strange the client was totally unaware, the term plan had expired 16 years ago.

The Watchman says 10 years ago

Walua, MAS is sleeping..MAS also says it is the responsibility of the customers to know what they are buying, an easy way out for MAS without getting its hand dirtied. It is hiding behind caveat emptor, also a good protection place for insurance salesmen and conmen. MAS also washes its hand in public like Pontius Pilate.

    Jason says 10 years ago

    These days, there are more financial salespersons than financial advisers. We have to know what we wanted and not what they wanted us to buy.

    Stop putting blames on MAS or other Govt bodies, they cannot have one controller following each insurance agent. Be realistic in your expectation with the respective governing authorities.

    You should be clear and crystal clear before putting down your signature on the dotted line that has something to do with your money! You should be responsible for your own money, not the financial advisers and not even the Government.

Nuts says 10 years ago

Prima facie case of mis-selling or selling for commissions.

If the customer die die wanted cash value type of insurance, even an incompetent & greedy agent should have just sold a $20K wholelife and that’s it.

However most people don’t know that many endowments pays more than wholelife, in terms of premiums and of course the commissions too. This is especially true for those cash-back type of endowments.

Don’t believe, can just ask AIA to reveal the premium & commission rates for their wholelife versus cash-back endowments 16 years ago.

And why only 10-yr term? Why not till the maturity of the endowment?

Looks like that agent simply selected the highest-commission combination of products to fit into the customer’s budget. This is beyond incompetent & greedy. This is stepping into unscrupulous territory and screw you customer mentality.

Wilfred Ling says 10 years ago

Not likely agent at fault. The client’s requirement is to use a whole life plan. A whole life plan attracts good commissions. There is no reason why an agent wouldn’t recommend that. Perhaps the client cannot afford the premium or wanted some kind of cash-back returns.

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