ILP - sharing our experience and mistake.

Dear Mr Tan,

Here is my two cents worth for investment linked products. My wife being the naive person she is bought some insurance/investment plan from DBS/AVIVA called her assurance gold in a bid to earn a decent return on her hard earned money but alas she was sweet-talked by a financial planner to sign up for the plan.

Once the plan had been signed, the financial planner did not call her for the next 5 years and she had faithfully contributed $500/mth to this plan.

She started investing in this product in July 2004 till present Nov 2011 which would make it a total of 77 months of premium paid up to date. (Do correct me if I got the months wrong) Thus paying up to $38,500 in total. The current value is worth only $26,650.22 which a loss of 31% (no including inflation)

After selling the policy, agents have a hands off approach. I do believe that most people are better off investing in an STI ETF or some blue chip share which gets dividends.

I do hope that other investors do learn from our mistakes and not be CONNED into buying investment linked products from agents who think of nothing but earning a quick buck from naive people like my wife.

My pain is your gain!

*Kindly take note that most insurance agents do not have a basic salary or a very low basic salary thus they would sell products which would give them the most commission as just to meet the client, they would have to pay for dinner, transport, parking etc thus selling low commission products such as term insurance would not make sense to them.

PUT YOURSELF IN THEIR SHOES, WOULD YOU BE SELLING TERM INSURANCE TO EARN A MEASLY COMMISSION OR INVESTMENT LINKED/LIFE INSURANCE? (Food for thought)

KC

My view
Although an insurance agent needs to earn an income, it does not justify selling a policy that makes the customer poor for a long time. Some agents earn more than a modest income to make a living - they earn a large income of five figures a month.

The agent claims to be professional and to give advice in the interest of the client. It is bad for them to mislead the client and sell bad products to rip off the client.