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How to identify and avoid a "rip off" product? You have to be careful about the financial products that are sold to you at a bank, as you might not be told the relevant facts.
09 Oct 2013 (106 views)  

A bank marketed a life insurance policy where the consumer has to pay $10,000 annual premium for 5 years, making a total payment of $50,000.

At the end of 10 years, the policy pays between $55,000 to $61,000 (not guaranteed) giving a yield of about 2% p.a.

The surrender value before maturity is less than $35,000 (as against $50,000 in premium paid) and this is not highlighted to the unwary consumer - although it is shown in the benefit illustration. 

A consumer said that the product was sold to her as a saving plan, and she was not told that this is a life insurance policy. There is suspected mis-selling.

When I showed this policy to an independent financial adviser, his comments are:

1. This is a rip off product
2. How can MAS allow the insurer to sell such a product? How does it pass the compliance test of being fair to consumers?

It is important for consumers to avoid buying the wrong product. Learn the three tips by Mr. Tan Kin Lian.

When you are ready, join as a member of FISCA and get the right advbice, suitable for consumers.

 



How to identify and avoid a "rip off" product? You have to be careful about the financial products that are sold to you at a bank, as you might not be told the relevant facts.
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A bank marketed a life insurance policy where the consumer has to pay $10,000 annual premium for 5 years, making a total payment of $50,000.

At the end of 10 years, the policy pays between $55,000 to $61,000 (not guaranteed) giving a yield of about 2% p.a.

The surrender value before maturity is less than $35,000 (as against $50,000 in premium paid) and this is not highlighted to the unwary consumer - although it is shown in the benefit illustration. 

A consumer said that the product was sold to her as a saving plan, and she was not told that this is a life insurance policy. There is suspected mis-selling.

When I showed this policy to an independent financial adviser, his comments are:

1. This is a rip off product
2. How can MAS allow the insurer to sell such a product? How does it pass the compliance test of being fair to consumers?

It is important for consumers to avoid buying the wrong product. Learn the three tips by Mr. Tan Kin Lian.

When you are ready, join as a member of FISCA and get the right advbice, suitable for consumers.

 

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