Asked by Anonymous

What to do if your parents were mis-sold insurance?

From https://www.straitstimes.com/business/admin-executive-paid-yearly-insurance-premiums-higher-than-annual-pay. Like the article, 4 years ago, my mom and I went to UOB to renew FD and was sold the PruSave Max Limited Pay. Paid 60k (12k premiums for 5 years) on the spot of signing the insurance. The agent told us that it is better than FD and at maturity 75y.o or death, she would receive 80k. However, recently i reviewed the contract and realised that only 43k is guaranteed while the remaining 37k is not. My mom and I were unaware of this before but the contract did state so.Even SSB gives better returns

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  • Yixiong Chang
    Yixiong Chang
    Level 5. Genius
    Answered on 16 Dec 2018

    I feel u have a weak case to seek any formal recourse. But do not worry. While the remaining $37k is non-guaranteed, it doesnt mean there is a high risk of not getting it. I feel what would help now is to find someone to explain to u how the non-guaranteed portion works (how the bonus gets declared and how it all adds up on the yearly bonus, terminal bonus etc). With the knowledge, u will better understand what the endowment plan gives u, and also be empowered to make a better financial decision in the future.

    SSB might not give a better return, we would have to calculate the projected yield of your policy at maturity to determine that. =)

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  • Loh Tat Tian
    Loh Tat Tian
    Level 6. Master
    Answered on 16 Dec 2018

    Well, you can get a updated Benefit Illustration from Prudential on the annouced bonus (which is guaranteed upon annoucement).

    So likely you would have received at least 10k gauranteed returns imho from the annouced bonus yearly. The remaining 43k is gauranteed by policy end. So you should be sitting on gauranteed 53k for now. Prudential/AIA policies has a history of higher non-guaranteed returns.

    Also, for endowments, they do give projected bonus, unless there is a major issue (case in point AIG, before AIA asia is born).

    Do correct me if I am wrong, but this is what i would probably see. Do update us with the updated benefit illustration.

    In the future, do also make sure you are accompanied by someone who can read contracts, before going down for such FDs etc. Banks can sell endowments.

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  • Albert Ho
    Albert Ho
    Level 1. Freshie
    Answered on 25 Dec 2018

    You can seek recourse from FIDREC. https://www.fidrec.com.sg/website/index.html

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