I am looking for some consumers to come forward and send a reply to the letter from the President of the association representing the life insurance agents. http://www.straitstimes.com/STForum/Story/STIStory_599561.html
Jeffrey Tan said consumers to get the advice of the insurance agent who will help them to select the most suitable products to meet their needs. From the questions sent to me, it seemed that many consumers were confused about the product that has been sold to them, and when they learned at a later date about the poor yield on the life insurance policy, they regretted having made a bad decision.
If you have suffered this unfortunate situation, I ask you to come forward and write a letter in reply to Jeffrey Tan. This will help to clean up the bad practices where many insurance agents continue to take advantage of the ignorance of the consumers.
If you are willing to share your experience, you can write a draft to me at kinlian@gmail.com. I will help you to polish up the letter.
Tan Kin Lian
Saturday, November 6, 2010
Bread Talk and Bread Life
I saw two shops in a mall in Jakarta that have similar name. Bread Talk was probably the original company. Bread Life follows the same concept. The Bread Life shop has many customers, and the Bread Talk shop was almost empty.
Cheated on inferior products
A consumer bought a few boxes of local sweets in a store at 8 yuan. Later, she saw the same product sold at another store for 3 yuan. She bought a few boxes at the lower price to average down. She was told later that the cheaper product could have expired. Her immediate remark was - I have been cheated. She felt that it the product had passed the expiry date, the store should not have sold the product to her without telling her.
Cheating is to sell a product without disclosing relevant information or providing misleading information about the product to the consumer.
If a consumer can felt cheated of a few dollars in a consumable product that has expired, how would the consumer feel if he or she has been sold a financial product that locks out the savings for 30 years and takes away 50% of the savings, amounting to more than $200,000, without being told? Is this cheating or not cheating?
It is important also to look at the degree. There is no much harm of being cheated of a few dollars. But if one is being cheated of a large sum, one should pursue the matter rigorously.
Tan Kin Lian
Cheating is to sell a product without disclosing relevant information or providing misleading information about the product to the consumer.
If a consumer can felt cheated of a few dollars in a consumable product that has expired, how would the consumer feel if he or she has been sold a financial product that locks out the savings for 30 years and takes away 50% of the savings, amounting to more than $200,000, without being told? Is this cheating or not cheating?
It is important also to look at the degree. There is no much harm of being cheated of a few dollars. But if one is being cheated of a large sum, one should pursue the matter rigorously.
Tan Kin Lian
Global Economic Turmoil
I expect a global economic turmoil within the next few years. My views are expressed here. I will be happy if I am wrong, but it is better to be prepared in case it materialises.
Family3
A consumer asked for my views about the Family3 policy. He was approached by an agent and was not sure if this is a good policy to buy.
I advised the consumer to read my FAQ on Family3 in my website, www.tankinlian.com/ask.aspx. (Search for Family3). There are a few FAQs written on this policy.
I also advised the consumer to read my book, Practical Guide on Financial Planning, available at www.tankinlian.com/ishop and to attend the educational talk on financial planning organised by FISCA (www.fisca.sg).
I hope that consumers will spend some time and money to be educated, so that they do not buy the wrong insurance product from an insurance agent who is unable to explain the product to the consumer and cannot be trusted to give the right advice to the consumer, due to the conflict of interest.
Tan Kin Lian
I advised the consumer to read my FAQ on Family3 in my website, www.tankinlian.com/ask.aspx. (Search for Family3). There are a few FAQs written on this policy.
I also advised the consumer to read my book, Practical Guide on Financial Planning, available at www.tankinlian.com/ishop and to attend the educational talk on financial planning organised by FISCA (www.fisca.sg).
I hope that consumers will spend some time and money to be educated, so that they do not buy the wrong insurance product from an insurance agent who is unable to explain the product to the consumer and cannot be trusted to give the right advice to the consumer, due to the conflict of interest.
Tan Kin Lian
How people vote
Contributed by DareToAct
In "Why empathy matters?", the author J D Trout pointed out that it is dangerous to think that people know what they want and can choose what they want. "When we choose poorly, these failures do not have a pure pedigree. They are part individual irrationalism, part unconscious influence, and part lousy choices."
When we are unhappy with the behavior of our first choice, or that the logical "right" choice disappoints, we might behave irrationally, especially under influence, and choose one of the lousy choices available.
Underestimating the potential of irrational voting can be detriment to any incumbent.
DareToAct
In "Why empathy matters?", the author J D Trout pointed out that it is dangerous to think that people know what they want and can choose what they want. "When we choose poorly, these failures do not have a pure pedigree. They are part individual irrationalism, part unconscious influence, and part lousy choices."
When we are unhappy with the behavior of our first choice, or that the logical "right" choice disappoints, we might behave irrationally, especially under influence, and choose one of the lousy choices available.
Underestimating the potential of irrational voting can be detriment to any incumbent.
DareToAct
Is exclusion of liability for injury caused by negligence lawful?
I refer to the letter "Indemnity forms unfair to participants" by Mr David Kwok Ng Kan (Nov 1).
Given the prevalence of this practice in the workplace and educational institutions,
perhaps it should be made a criminal offence
for anyone to purport to exclude liability in such circumstances.
Peter Wadeley
http://www.todayonline.com/Voices/EDC101103-0000045/Is-exclusion-of-liability-for-injury-caused-by-negligence-lawful?
My view
I agree that it is unlawful for a party to exclude liability in circumstances where they were negligent. The exclusion is unfair to consumers and goes against the established law of negligence.
Instead of waiting for Parliament to pass a new law, the relevant authority has existing power to tell these parties that they are doing something that is illegal. The relevant authority should step forward and exercise the powers that they already have, instead of standing by and watch.
Given the prevalence of this practice in the workplace and educational institutions,
perhaps it should be made a criminal offence
for anyone to purport to exclude liability in such circumstances.
Peter Wadeley
http://www.todayonline.com/Voices/EDC101103-0000045/Is-exclusion-of-liability-for-injury-caused-by-negligence-lawful?
My view
I agree that it is unlawful for a party to exclude liability in circumstances where they were negligent. The exclusion is unfair to consumers and goes against the established law of negligence.
Instead of waiting for Parliament to pass a new law, the relevant authority has existing power to tell these parties that they are doing something that is illegal. The relevant authority should step forward and exercise the powers that they already have, instead of standing by and watch.
Choice of insurance plan hinges on affordability, buyer's needs
Published in the Straits Times
WE REFER to the recent discussion
(Mr Tan Kin Lian,
'Why insurers, agents may turn a deaf ear to SM Goh's appeal'; Oct 27)
on Senior Minister Goh Chok Tong's appeal to the insurance industry
('Keep insurance affordable: SM Goh'; Oct 23),
and would like to share our views on
term insurance versus traditional whole life and investment-linked plans.
Such plans and their suitability are largely dependent on the consumer's
financial needs as well as affordability.
Term insurance, which charges cheaper premiums, does not offer any cash value.
Such plans are often temporary solutions to permanent whole life plans.
Most term life plans do not offer coverage beyond the age of 85.
Traditional whole life plans, on the other hand, offer bonuses -
albeit non-guaranteed, but which become guaranteed once declared -
that will be added to the basic sum assured.
Investment-linked policies offer more flexibility and transparency
as to how cash values are accumulated.
As it involves investment, it is not suitable for risk-adverse consumers.
Not all term insurance policies pay a lower commission
than traditional whole life and investment-linked policies.
Pricing of insurance products is a matter of actuarial science
determined by insurers.
There is documentation of the financial planning process that is signed off by the client.
The recommendations based on the fact-find are further checked by managers
for compliance and can be audited by regulators.
Financial representatives subject themselves to mandatory training hours
in compliance, knowledge and skills,
while disciplinary actions are taken to address unethical practices.
The Life Insurance Association's report released on Aug 5 stated that
72 per cent of life insurance applications were completed
with a full or partial fact-find.
Ultimately, consumers would have to decide for themselves
on the advice given as well as the option to compare and choose plans
across the various insurers.
The answer to SM Goh's appeal should be multifaceted,
whereby insurers, industry players and financial representatives
work to educate consumers on the importance of adequate insurance coverage.
Examples include MoneySense and public forums.
Jeffrey Tan President Insurance and Financial Practitioners Association of Singapore
http://www.straitstimes.com/
My view
My consumers have sought my advice on the insurance policies that they have bought. They were shocked to learn about the high dedction, amounting to more than 50% of the accumulated premium. They were not aware about the high charge as it is not explained by the agent.
I hope that these consumers will write to reply to the letter from Jeffrey Tan. Consumers who have been cheated should now voice their unhappiness. They cannot stand on the sideline and expect other people fight for them.
If you wish to write a letter to the St Times but is not confident about how to write the letter, you can send a draft to kinlian@gmail.com. I will help you to polish up your draft. You should talk about how you were sold a life insurance policy, and how much you understood or did not understand the product, and how shocked you were to learn about the high percentage that is deducted from the policy, giving you a large loss for a lifetime.
Do take this chance to write, and help to change the bad practice and dishonest selling that is happening for a long time in the life insurance industry.
(Mr Tan Kin Lian,
'Why insurers, agents may turn a deaf ear to SM Goh's appeal'; Oct 27)
on Senior Minister Goh Chok Tong's appeal to the insurance industry
('Keep insurance affordable: SM Goh'; Oct 23),
and would like to share our views on
term insurance versus traditional whole life and investment-linked plans.
Such plans and their suitability are largely dependent on the consumer's
financial needs as well as affordability.
Term insurance, which charges cheaper premiums, does not offer any cash value.
Such plans are often temporary solutions to permanent whole life plans.
Most term life plans do not offer coverage beyond the age of 85.
Traditional whole life plans, on the other hand, offer bonuses -
albeit non-guaranteed, but which become guaranteed once declared -
that will be added to the basic sum assured.
Investment-linked policies offer more flexibility and transparency
as to how cash values are accumulated.
As it involves investment, it is not suitable for risk-adverse consumers.
Not all term insurance policies pay a lower commission
than traditional whole life and investment-linked policies.
Pricing of insurance products is a matter of actuarial science
determined by insurers.
There is documentation of the financial planning process that is signed off by the client.
The recommendations based on the fact-find are further checked by managers
for compliance and can be audited by regulators.
Financial representatives subject themselves to mandatory training hours
in compliance, knowledge and skills,
while disciplinary actions are taken to address unethical practices.
The Life Insurance Association's report released on Aug 5 stated that
72 per cent of life insurance applications were completed
with a full or partial fact-find.
Ultimately, consumers would have to decide for themselves
on the advice given as well as the option to compare and choose plans
across the various insurers.
The answer to SM Goh's appeal should be multifaceted,
whereby insurers, industry players and financial representatives
work to educate consumers on the importance of adequate insurance coverage.
Examples include MoneySense and public forums.
Jeffrey Tan President Insurance and Financial Practitioners Association of Singapore
http://www.straitstimes.com/
My view
My consumers have sought my advice on the insurance policies that they have bought. They were shocked to learn about the high dedction, amounting to more than 50% of the accumulated premium. They were not aware about the high charge as it is not explained by the agent.
I hope that these consumers will write to reply to the letter from Jeffrey Tan. Consumers who have been cheated should now voice their unhappiness. They cannot stand on the sideline and expect other people fight for them.
If you wish to write a letter to the St Times but is not confident about how to write the letter, you can send a draft to kinlian@gmail.com. I will help you to polish up your draft. You should talk about how you were sold a life insurance policy, and how much you understood or did not understand the product, and how shocked you were to learn about the high percentage that is deducted from the policy, giving you a large loss for a lifetime.
Do take this chance to write, and help to change the bad practice and dishonest selling that is happening for a long time in the life insurance industry.
Guilin, China
I was in Guilin for the past four days. I went on a vacation by the inaugural flight to Guilin on Jetstar. It was an excellent trip to visit a beautiful place with nice people. The service by Jestar was excellent.
China still blocked Google and Youtube. I was not able to access my blog. But I was able to get the Google Mail.
I met many new and old friends on this trip. The enjoyed the shape quiz that I gave to them. They were fascinated by the challenging puzzles. They also enjoyed the amazing numbers. Many of them wanted to buy the Shape Quiz book, which is available here.
China still blocked Google and Youtube. I was not able to access my blog. But I was able to get the Google Mail.
I met many new and old friends on this trip. The enjoyed the shape quiz that I gave to them. They were fascinated by the challenging puzzles. They also enjoyed the amazing numbers. Many of them wanted to buy the Shape Quiz book, which is available here.
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