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
Saturday, November 6, 2010
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.
Tuesday, November 2, 2010
Risk of Private Shield
I have seen several examples of the problems encountered by consumers when they change from Medishield to Private Shield or from one Private Shield to another plan. They encountered rejection of their claim due to failure to disclose previous medical conditions. In some cases, the previous medical conditions were quite trivial and are not material to merit rejection of the claim. However, the claim officer is "trigger happy" in rejecting the claims, so that they can make more profit for the insurance company.
The purpose of insurance is to pay claims, especially for legitimate claims. It is not to make excessive profit for the insurance company. In some countries, it is illegal for an insurance company to reject a claim for unjustified reasons. If they wish to cite "non-disclosure", they need to have reasonable grounds. As the situation seem to be quite bad in Singapore, it is best for consumers to avoid changing insurers or to avoid upgrading of Shield plans.
The behavior of the insurance company is bad in another respect. Even if they are entitled to reject the claim, it is still their duty to pay the Medishield portion of the claim, as this cover is supposed to continue from one insurer to another, and from one plan to another. By rejecting the claim, the insurance company is failing in its duty to treat its customer fairly.
If you are caught in this situation, and your claim is unfairly rejected, you have the following options:
The purpose of insurance is to pay claims, especially for legitimate claims. It is not to make excessive profit for the insurance company. In some countries, it is illegal for an insurance company to reject a claim for unjustified reasons. If they wish to cite "non-disclosure", they need to have reasonable grounds. As the situation seem to be quite bad in Singapore, it is best for consumers to avoid changing insurers or to avoid upgrading of Shield plans.
The behavior of the insurance company is bad in another respect. Even if they are entitled to reject the claim, it is still their duty to pay the Medishield portion of the claim, as this cover is supposed to continue from one insurer to another, and from one plan to another. By rejecting the claim, the insurance company is failing in its duty to treat its customer fairly.
If you are caught in this situation, and your claim is unfairly rejected, you have the following options:
- Lodge a complaint to FIDREC (www.fisca.sg) for your claim to be mediated or adjudicated
- Write a letter to the newspaper to complain about the unfair rejection
You can read several stories about unfair rejection of Shield claims in my website. Go to www.tankinlian.com/ask.aspx and search for 'Rejection" or "Shield".
Tan Kin Lian
Amazing Number cards
I have arranged the numbers into in a format that allows you to print them into small cards. You can print out the page, paste into a hard card and cut out the small cards. You can try the trick with your friends. Click here.
Ask Mr. Tan in www.tankinlian.com
I have now written about 100 articles on insurance, investment and financial planning in the Ask Mr. Tan section of my website, www.tankinlian.com. You can access this section directly from the "Ask Mr. Tan" button on the top of the right frame of my blog. When you are at the website, you can search for an article easily by entering a keyword, such as "health insurance" in the Search tab to get all articles on this topic.
In the past, I post these articles in my blog but they quickly disappear from the top of my blog after a few days.
By putting them in the TKL website, they can be easily retrieved in the future, using the search function.
I am a regular user of this Search function. When someone ask me a question, it is easy for me to retrieve the article or FAQ using this search and give a link as a reply. But I want to encourage my readers to search for the article on their own, rather than give me the additional burden of making the search.
In the past, I post these articles in my blog but they quickly disappear from the top of my blog after a few days.
By putting them in the TKL website, they can be easily retrieved in the future, using the search function.
I am a regular user of this Search function. When someone ask me a question, it is easy for me to retrieve the article or FAQ using this search and give a link as a reply. But I want to encourage my readers to search for the article on their own, rather than give me the additional burden of making the search.
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