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.

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.


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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

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.

I said twice already, Hong Leong Assurance,

Thanks. PM you details

They sent me a letter, which is basically citing poor investment in the 1997 crisis, and a whole bunch of information which doesn't explain anything. I reread the insurance terms in more detail, frankly there is this Compound Bonus Revision, which is the investment, and it is subject to deductation fees and expense which are unstated. Bascially what I'm reading is they can deduct any amount based on what they like as expenses.

I'm gonna to write a complain letter to bank negara sometime end of the month when I find more free time, and maybe find a lawyer to take the case up. Any recommendations?

Really? If that happens, yes I won't buy insurance from that company. I'm sure there will be other who will spring up to offer traditional. When there is demand, there will be supply.

Sorry, I'm not into gambling or betting but investing. If that days comes, I will raise funds to start a insurance company for like minded people who are investment savy and want to have insurance security. BTW, I think I will win if I bet.

A good read on the matter against endowment policies, from ex NTUC CEO. Same issue in Singapore

http://tankinlian.blogspot.com/search/labe...s%20Bonus%20Cut

Which is why my recommendation. Insurance should be insurance, investments as investments. Do not tryo to mix the two and sell them together with misguided information.

Just as comparision from my personal experience.

When I buy unit trust, I receive an investment report on market trends every month. I get to meet my financial advisor whom I bought from, and we can casually discuss on what's the best financial route, since they are typically investors themselves. They will advise me on how the invest.

So I'm kept informed all the time about how much and where the investment should be.

When I buy unit trust from an insurance company, I only get a half yearly report on how fund value. I get to see the agebt when premium is due and I can't discuss investment from the agent cos they probably did not invest themselves. But I get a birthday card every year from my agent.

Which sounds more financially wise?

In the case of my mum, I think she only got a yearly report which doesn't even tell how much fund is left. There is a Compound Revisionary Bonus which is misleading because there is an undisclosed sum deducted from it as expense. In my mum case, the yearly CBR report shows the sum closing to 60K, which is why no alarm was raised. My unit trust, I know what is the charges.

Glad to find someone who thinks the same way about savings+insurance. This thread is started against HLA bank, and the agent still dares to advertise HLA plans.