Set limit on commission

Dear Mr. Tan,

I am quite shocked to learn from your blog that up to 21 months of savings can be taken away to pay the agent to sell an investment-linked policy. If the monthly saving is $500, the total deduction is $10,500. Why should the agent earn so much money to sell a policy?

I am sure that the consumer is not aware about the total cost. Which consumer is willing to give away so much of the hard earned savings to pay commission to the agent?

I understand that the consumer is provided with a lot of information about the insurance product, including the charges. Many consumers are overwhelmed by the information, so they blindly trust the agent. When they find out the truth, it is too late.

Surely, the Government should set some reasonable limit to protect the consumer?

REPLY

I agree that there is a need for consumers to be better protected in Singapore. The commission rates for life insurance policies are too high.

In many countries, the regulators imposed certain limits on the commission rates, to protect the interest of the consumers. I hope that a similar practice can be adopted in Singapore.