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Should I forfeit $5,000?

Friday, March 27, 2015

Read this and see if you get upset like I did:

I have recently become interested in growing my wealth and financial planning because I have seen how my own parents failed. However, I am only just starting, plus I am terrible with numbers. I am probably only good at capturing the theory, but terrible at application, and may have made some mistakes, which I now need help with. I have no one else to turn to except insurance agents, who I am sure you know are mostly biased towards their own products.


One major mistake I made recently was buying from an XXX agent a pure investment product called PPPPPP. I have put 5k into it. I am not sure if the agent mentioned at the time that this product is a premium payment product, because I was shocked to learn only after everything was done that this is something I have to pay for monthly or yearly. She had put me down for 30yrs, I believe that is because she knows I am looking at long term investment. I was also informed by a third party that unless the funds make more than 6% returns, I would not be able to offset the charges and fees of the product. 

All in all, the impression I got from the agent who sold me the product was that this is similar to something I would get from the stock market, a one time payment, wait for gains, sell if you need to, otherwise hold and allow the gains to roll. I knew there would be fees and charges because this product is from an insurance company, but I did not know I would be unable to surrender any time before 30yrs is up.

My question is whether I ought to give up this product. I talked to the customer service at their headquarters, he told me if I surrendered the product I would simply be forfeiting the 5k, that even though the agent havent given me the policy document, I was past the 14days free look policy. The alternative would be to hold on because the funds are good. 

I had initially agreed to the product because i recognised a lot of the funds eg Blackrock, Schroder, Legg Mason, Pictet. Plus, I thought this product would be a safety net for me, just in case I screwed up my own private investments, because I had believed in the ability of these funds to do better than I could.

I am unable to decide now if surrendering the product would be a rash decision. However, if you are able to tell that this is a bad decision and surrendering the product now will cut future loss, please let me know. I promise I will not sue or come back to you for revenge because the funds turned out to be profitable. I have no one else around me with appropriate financial knowledge who is unbiased towards any companies, and as I think you can tell, I am a green horn greener than grass. 

Any advice or feedback will be greatly appreciated.


Misunderstood? Misrepresented? Negligence?

I have passed this case to a friend who is a professional to follow up. However, feel free to share your opinions in the comments section. I am sure the victim reader will take all the comments (if any) into consideration in deciding what to do next.

Related posts:
1. Know what is good for us.
2. Will I retire happy?
3. "A safety net in case we screw up our investments?"
(It is the CPF.)


Rebel said...

Grrr . . . Lace the money sucker's underwear with grounded chilli padi @_@

Singapore Man of Leisure said...


I'm glad you gave this case to a professional to follow-up.

Need to verify BOTH sides of the story before jumping to conclusion.

If it's indeed a case of misrepresentation, the agent's career may be short-lived.

I'm sure the Life Insurance Association of Singapore would appreciate the opportunity to kill chicken to frighten the monkeys.

AK71 said...

Hi Rebel,

That would be very satisfying but it could get us in trouble. LOL. ;p

AK71 said...


Yes, like a friend put it so well, it probably isn't that the agent lacks knowledge, very often, it is a question of ethics. -.-"

AK71 said...

For the reader concerned, this is what my friend who is also an insurance agent said to me:

"If she got evidence that is a missold case, she can go a higher management de"

This would probably mean bypassing the call centre staff.

AK71 said...

The following are comments left on my FB wall by other readers:

Matthew Seah:
can still cancel within 14 days after receiving policy document. A trick of agents is to withhold the documents till past the date. then get you to sign the acknowledgement of receiving policy documents without asking you to fill in the date

Christopher Lock:
The right to exercise your "free look" is 14 days from when the insured RECEIVES the policy contract. If the policy contract is NOT delivered, the "14 days free look" remains intact.

calving777 said...

Just talking to myself on what I think :)

1. Need to deduct 6% before net returns.
2. Lock-in continual payment (Amt?)for 30yrs. Unsure what is the charges for "early surrender".
3. Use a spreadsheet to generate various %returns for 30yrs, comparing with a low cost index ETF.
4. See where is the $5000 breakeven point (based on assumed %returns).
5. ???

temperament said...

6 % fees p/a before any returns for 30 years? i think an annuity can not even pay you that 6 %.

Rodney said...

This is not the kind of Singapore that was built to last ... people singaporean agent taking advantage of those less knowledgeable....just for commission; his license shld be revoked... said...

Hi AK,

I feel regardless if it's misrepresentation or misunderstanding, 30-year duration is a critical piece of information that should not have been missing or having the remote chance of being misunderstood. The financial committment over the next 30 years should have been clearly presented, so one can always go back to the proposal given by the agent as evidence to see if it's been included.

I recall my own horrible experience with the so called capital guaranteed policy. They just omitted telling you that the capital here is net all charges and commissions. So I put in 10k, after charges was left with $9500 the very next day and that was the amount I received after 5 years!! What a joke! I found it very amusing in retrospect. I was such a fool. Imagine enrichng the coffers of insurer and the agent who just move my money around without really doing anything and for me the opportunity cost of the 5 years? I learnt my lesson/s.

If I was the reader, i would not cave, I will go to CASE, or any relevant insurance association to make a report, the Fair Trading Act should be enforced as the other 2 FB posts pointed out, the reader still has a chance.

Dont sign anything from the insurer or agent from now onwards.

Dont be intimidated by their tactics, and believe the only option is to lose the $5k!

They are also concerned about the bad publicity and the power of social media to disseminate info now.

If you genuinely believe you were misled or misunderstood the info presented, then take a stand and insist on having your hard earned monies refunded. There may be a couple of hundred of dollars incurred as admin cost, thats ok.

all the best !


gerimegaly said...

Hi AK,

The Reader should not forfeit his $5K, but instead attempt to speak to the higher management of the insurance company concerned, to explain the situation. For sure, he must insist on talking to someone who is in a better position to help him.

Even though his policy has "technically" past the 14 day Free Look period, the higher management has the ability to still do the refund, based on compelling reasons. The Reader should do this soonest possible, and not wait any longer.

It is pointless to speak to the Customer Service staff as typically, they are not in a position to make certain decisions.

I have heard of many instances where refunds have been made, even though the policies bought have gone way past the Free Look period.

PS. I have been in the Life Insurance line for over 25 years.
11 Years as a Tied Agent for a single life insurance company, and 15 years as a FA Rep.

AK71 said...

Hi all,

I am so glad I shared the reader's experience here in my blog. I have asked her to read all your comments and she will have to decide what to do from here on.

When bad things happen to us, it helps to know that there are people out there who care enough to share and to help lighten our load. :)

Thank you very much. :)

starmaster said...

14-day free look period
All insurance companies grant a "14-day free look period". It starts from the date of receipt of your policy document. During this period, you should review your policy to see if it meets your needs. If you decide not to keep it, give the company written notice of cancellation and the company will terminate your policy and provide the appropriate refund.

You can cancel it since you haven receive your policy document

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