I see a number of insurance topics and I just wanted to share my experience about buying investment linked insurance, which I feel is a very poor financial decision.

My mum bought a investment linked life policy about 20 years ago. The agent told her she would get back 60K++ upon maturity. We still have the paper document on that. My mum is illterate, so she trusted the agent who was her friend and bought it. Luckily, all was well we didn't need to make any claims. Fast forward to now, she received a letter stating the policy would mature in two more years, but she would only get back 18K.

I can understand if the amount is 50K even 40K but at 18K, it is 70% difference. I wrote in to the bank asking them why the amount differed so much. Their explanations was due to poor investment made in 1997, that's why it was so low. I don't buy that, I gonna write to Bank Negara and maybe sue them for false selling (anyone can help?).

Anyway, personally I do buy insurance but without investment. I pay a fixed sum yearly which covers everything in case of hospitalization to death. My premium is only 15% compared to an investment linked policy. My insurance agent always try to psycho me to buy investment linked polices, saying one must always invest. No thanks, I will use the 85% of not paying the premium and invest on my own. The insurance companies can't invest better, and the only reason they want to sell you investment is besides comission, they get 5% of the investment performance. Look at my mum's case, they got all their comission all these years, and the losing end is people like my mum.

If you have any investment linked insurance, check your maturity value. You can probably do a lot better financially than to leave it to the "experts". For those who will ask anway, the insurance policy is from Hong Leong Assuarance.

1. I do not understand why the company would tell you in 2 yrs time, the maturity cash value is 18k. They gave the figure based on what.

2. Investment link means linked to fund, unit trust. I'm sure you understand that, so now, how can a company say how well or how bad the fund would perform in next 2 yrs. For all you know, it could increased 50%!! Then the maturity cash value is certainly more than 18k. Now the other way around if the economy takes a worse turn, it could drop further, then the cash value is worse than 18k.

try get an expert to read the buying terms and condition first.. i dont think you can do anything(usually)

Look at Lehmen Brother case in Singapore, the government is blocking the refund to investor.
It's a different case in Hong Kong for mis-selling, investor got their refund back.

BTW, TS.
If you think you are not compatible with your insurance agent, time to move on.
When you advance to the next level, it's best to change your team of advisor.

now is bad time, investment link sure not good lah, wait till good time, then you will say investment link better geh.

5 more years lah if you can wait, then good lor ...

its true investment link has more tips and tricks than traditional insurance but eventually when the industry settles, there will only be 2 kind of insurances left, Term and Link ...

hei ts, did u read what is the nature of the product ur mom bought 20 years ago?? wondering is there such product 20 years ago...

do u mind to tell the amount ur mom invest 20 years time ago?? if ur mom invest 10k 20 years ago and now paying back 18k i understand la... but if all the while ur mom got add on money to the acc then it is kinda impossible...

besides that, since u mention it is a link investment, i wondering did ur mom take some money out during the 20 years period??
did ur mom forget to pay the premium for the insurance for sometime??
during the whole 20 years, did ur mom claim insurance be4?

lastly, i wondering is it the investment product + the insurance = 60k.... some agent juz wan to reduce the confussion level and just skip alot while introducing all these products....

the factors above might influence the sum u get back... suggest u to ask the agent back....

I don't think u can get investment-linked policy 20 years back !!!
I think it is endownment with cash payout every 3 /5 years.....

which insurance firm? mind to tell?

yea agreed

ILP was introduce in Malaysia bout 10 years back . . . but if its a traditional plan
its imposible to have negetive returns like what you said

i believe what you bought is a whole life insurance plan instead of endowment (savings) plan
that explain why the cash value is so little after 20 years

I am sorry to hear this, but as an insurance agent, I have to tell you that those figure they told you on what you going to get in 20 years is estimated amount and subject to economy and the investment method they have made.

As you know, there is no 100% assurance on investment. Say you invested in mutual funds and they tell you that you will get return of 20% in 3 years, is it true? It can be true and it can be more or less isnt it? How they know it will be 20% in 3 years? It is just estimated amount based on historical performance only.

Another saying is that if you invest yourself in shares, can you assure that there will be return?

Of course you can sue the insurance agent, but you will never succeed cause investment is investment, not savings.

Hope you can distinguish the difference.

i dont even trust the insurance with the investment link... it's worthless... some of the agent is really misleading. few yrs ago, my father was being approached by a bank agent for the insruance product.. she promised him that he will get 5 times more back from what he paid 100/mth 30 yrs later

after that my father home and discussed it with brother. and both of them went again for the further discussion on the matters. his q really strict and go to the points. the agent ended up cant really argued with brother. the actual return is only 20% of what she promised of my father.

somemore she not really know what actually the insurance is. even my brother (analyst) know more detail than her. u see them as irresponsible agent just walk away with the commission without telling customers about the risk associated with the products sold.

come on lah. u should telling the fact of the product do come with the risk not only for the return... it's just my sense and experience wanted to share with u guys.

This post has been edited by wkf: May 3 2009, 12:22 AM

I will just reply in one thread

The bank is Hong Leong.

The agent has already long left the industry.

I'm not sure the exact plan my mum took, it's some kind of whole life policy, ALP, or something where the returns are reinvested into. I think she put in 24K total. No she never took out the money or do a claim before. When my mum bought it, I was but a mere boy.

The paper slip has a chart showing values, projected maturity return 68K. I attached it here.

You said it "Investment is investment", and I say "Insurance is insurance". The two shoud not mix together or sold, especially to old illiterate folks. Sueing the agent is incorrect because it is the bank/company who approves the selling method. In Singapore, there is quite an uproar at Hong Lim Park over the Lehman bonds as it is the retirement funds of many, especially Hong Kong investors are compensated but not Singaporeans.

Even if I pay normal protection insurance premium and put the remainder in FD, 20 years will end with with more. True, my investment may not confirm may make money, but I won't make 70% loss as I will have a stop. Frankly, I still don't understand how they can be so far of the projectection. It just proves the point again that the investment "experts" doesn't fare better than average investor. And at least, I don't have 5% comission taken out from my gains.

My opinion is mutual funds is actually another poor investment form for the lazy but that is another topic.


Attached thumbnail(s)

Guess you need to get the idea right.

Investment-linked insurance product (ILP) = insurance + mutual funds.

All your premium paid will be converted to fund units then only deduct for any insurance cost. This is why ILP charged management fees + other charges for managing the funds.

And guess you need to know why most insurance companies sell ILP instead of traditional plan? This is to protect them self from being sue should they not achieve their "promised" amount stated on the quotation since it is "investment" in nature.

That is why traditional plan is more valuable.

Sorry but from your attachment, I can't really analyze what kind of insurance plan is it.
Definitely not Investment Linked.
Looks like endowment, but so far there's no cases where maturity value is less than what you paid.
Maybe Hong Leong assurance agent can explain it.

This post has been edited by bbjslee: May 3 2009, 04:35 PM

investment link product more benefit than traditional isnurance in terms of cash value

I got investment link insurance for 20 years.
I don't know:
- what investment it is investing in.
- what is the latest market price
- how much of the annual premium goes to insurance and how much goes to investment.
- how many percentage they deduct for management fees

Which insurance company will send me annual statement about the above?
How much paid for insurance, how much added to investment account, how much dividend is paid?

Maybe I should just buy a traditional plan (much cheaper maybe 80% cheaper??) and put that 80% into ASW or Sukuk which are GUARANTEED investment.

I think my ides are quite right. My own policy (not my mum) is pay and forget. My yearly premium is 80% lower than if I took a ILP. It give me the additional cash to invest on my own, and be responsible.

Mutal funds, unit trust, whatever..they are the same. You are putting your money in the hands on people whom you haven't even seen their faces. And you trust them to handle it properly for you?! No thanks, I will manage my own finances. People who don't want to be financially responsible end up losing it.

The thing that sickens me is that the sellers do not explain things clearly (like my mum case or Lehman bonds). It can be considered fraudulent selling but unfortunately here, there's not enough consumer protection.

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Added on May 3, 2009, 11:10 pmThe agent has already bye bye to the industry long time ago. It looks like endowment plan, but there are some strange rules about it which has a shroud of mystery, like how the guaranteed CBR is calculated and what is guaranteed really means. End of the day my mum paid too much for such policy coverage and received back too little.

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Added on May 3, 2009, 11:13 pmYes, you should rethink your insurance strategy. The only issue is ASW and Sukuk are very quickly subscribed, but you get the idea. Invest your own money yourself!

This post has been edited by imtrobin: May 3 2009, 11:13 PM

I like to give my point of view in mutual fund.


They are the best if you intend to work till retirement age and don't bother increasing your financial intelligence.

Most people go into stock market and earn money, yet later they lose it back again to the market. The reason is because they lack the plan.
Mutual fund can provide that plan for you.
The only problem is, it only works well in an up-market.

I would recommend a few options
1. Scan the whole policy and post here for us to see. (Very tedious)
2. Find your own insurance agent(s) ask them for opinion.

For all you know there was a simple misunderstanding somewhere.

Misunderstanding or not, my illiterate mum was sold on the idea of getting back $68k upon maturity, and now it is 18K. I can understand if it's 50K but 18K is more than 70% down. The agent is long gone, so there's no point chasing that path. I hope people rethink their insurance and financial planning for retirement.