Life insurance buyers deprived of huge savings!

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Life insurance buyers deprived of huge savings!


May 17th, 2013 | Author: Contributions




The following report from Monday’s ST deserves the widest
possible publicity because it shows how buyers of life insurance here have been
deprived of the opportunity to buy less expensive life insurance: they could
have saved as much as $20,000 when buying a $1m life plan.

FUNDSUPERMART’S move to sell insurance products on its online platform at
a 50 per cent rebate off the lifetime commission sparked some unhappiness among
industry players who saw it as a price war tactic.

Four days after launching it on April 30, Fundsupermart took down the
offer, and has stopped selling insurance products since.

On its insurance webpage, which has been removed, Fund- supermart said it
was introducing the distribution of protection products as a value-added service
to its customers.

“More importantly, clients who are on the search for transparency on the
commissions they pay for purchasing insurance can find this here,” it
added.

There were also two examples stating that the 50 per cent commission
rebate translates into savings of $2,000 for a $1 million term plan. For the
same sum assured, the savings for a whole life plan could be more than
$20,000.

The calculations were aggregated across three insurance providers, based
on the profile of a 40-year-old, non-smoking male.

The Straits Times understands that Fundsupermart initially intended to
continue with this model but later revised it to a one-month promotion, before
pulling the plug completely.

A check with Tokio Marine, NTUC Income and Manulife, whose products
Fundsupermart was distributing, found that individual financial advisory firms
are free to employ different business models.

http://www.cpf.gov.sg/imsavvy/infohu...le.asp?readid={4798875-17383-3900371789}

According to the report, financial advisers (what insurance sales persons
call themselves,nowadays, for various reasons) bitched to Fundsupermart: The
Association of Financial Advisers (Singapore) said in an e-mail statement that
when the advertisement was published on Fundsupermart’s website, the association
expressed its members’ concern to Fundsupermart, “noting that the tone and
language used in its postings could be detrimental to the reputation and
professionalism of other financial advisers”. [Err wondering what
reputation and professionalism? What can be lower than the reputation and
professionalism of life insc sales persons? Used car dealers? Juz kidding
leh.

The industry body, representing nearly half of the financial advisory
firms here, added: “We are glad that it has taken our views into consideration

and has decided to withdraw the advertisement.

Hopefully some human rights or other kay poh activists will kick up a fuss,
though I’m not holding my breath: They focus on things like ISA, capital
punishment, FT workers rights and other things fashionable with ang moh social
activists, not with the concerns of median S’porean wager earners.

So here’s hoping Tan Kin Lian of Fisca will organise a protest or write to
the press to highlight the loss of this scheme; or for Uncle Leong to get Mrs
Chiam to ask in parliament that the the competition authorities investigate
whether there was undue pressure to remove the offer. Note that the agents’
trade union emphasised that “All financial advisers are free to offer their
competitive deals to their customers. We believe that in such an environment,
consumers will ultimately benefit in terms of both quality of advice and
pricing.” Ya right, so how come no one offers to give such big rebates, and why
the bitch to Fundsupermart when it cut its commission rates?

Doesn’t smell right, does it?

Meanwhile, three cheers to ST for highlighting this issue.

.

Cynical Investor

[Source]: Thoughts of a Cynical Investor (http://atans1.wordpress.com).


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