AIA Insurance - Endowment policy scam

[Chris008]

AIA Insurance - Endowment policy

Beware of the AIA Insurance Endowment policy!
From the Straits Times:

Settlement roadblock in insurance policy
A 21-Year endowment policy of mine with AIA, bought in 1991, matured in July this year. Under the provisions of the contract, I am entitled to elect for any of a number of settlement options, and I had intended to choose one which allows me to re-deposit the maturity proceeds so as to earn an interest rate of 4 per cent per annum.

But AIA informed me that it will not fulfil the provisions relating to that settlement option, citing a clause which gave it the right not to do so.

In my view, the clause is administrative in nature, and should not be used by AIA to justify the non-fulfilment of the settlement options.

Goh Choo Seng

Settlement roadblock in insurance policy

Reply from AIA:
We thank Mr Goh Choo Seng for his feedback ("Settlement roadblock in insurance policy"; Forum Online, Oct 26).

Our policy contract provides that an election made by a policyholder in writing to settle his insurance proceeds with AIA Singapore is subject to acceptance by the company.

Due to the current sustained low interest rate environment and uncertainties in market conditions, AIA Singapore will not be able to accept elections for settlement options.

Settlement option monies are not covered under the Policy Owners' Protection Scheme, and rank after policy liabilities and equally with the unsecured liabilities of the insurer in the event of insolvency of the insurer.

Our policyholders may choose to receive the lump sum payout or consider other AIA products to re-invest the proceeds from the matured policy.

Malcolm Koh
Head of Customer Service
AIA Singapore

AIA on why it rejected client's option to settle matured policy

KNN I call on all HWZ users to boycott AIA. Wonder if Great Eastern and NTUC are conducting the same kind of endowment policies like AIA!

 

[clearsky2007]

Amost all insurance companies are the same. They used clauses in small fonts to protect themself first. Many people will still sign it knowing or not knowing it. Insurance products are usually sold by close friends or relatives thus the initate trust is there. Close friends/relatives may not even know if there are such clauses as they are only trained or told to sell these insurance products in order to earn a commission which is their interest. The clauses are written by th company's insurance legal/lawyer.

Even if people knew there are such clauses before they signed the policy, not many people will know how to interpret them.

There are reasons why insurance agents can live in bungalow/Condo and why insurance company can earn hundreds of million per year. while those who purchase the policy may still live in HDB.

 

[bloodsucker]

AIA is not making any sense here. They are still earning record profits; is it too hard to let its own policyholders earn that teeny little bit more interest on their policies?

This is truly the sharks bullying the small fishes. There is absolutely nothing that Mr. Goh can do to argue his case. However, I hope that everyone opens up their eyes before buying any policy in the future. The best thing is to avoid whole-life, endowment and ILP in the first place. Look at the BI and the effect of deductions and distribution cost segment. If you don't know how to read it PM me and I'll help you decipher the numbers.

For those who have studied econs and accounting before, your opportunity cost PER policy (on average) would cost you upwards of $200-300k. You go calculate how much an average Singaporean will stand to lose out if he buys 3 or 4 policies from his friend/relative. Some people even support them to the extent of more than 10 large policies! I pity these people because they have just given more than $1-2 MILLION to the insurance companies and they don't even know it. I always advocate financial education for everyone because afterall, this is your own money. Term is king. Everything else is laughable.

 

[hhanzorion]

First I am not AIA agent. haha

Here is my point,

Endowment policy is a Participating policy, it is Investment in nature with a high portion of saving investing instruments.
This means that the interest rate and bonus are NON-Guaranteed.
And with that, the client should already know that the interest rate will not be constant over the years.
If you out yourself in the Insurance Company view, will you still allow yourself to give 4% interest rate if today the finance sector crashed?

 

[Chris008]

On the other hand AIA profited from the endowment cash contributions for 21 years and made a lot of profit with them. The decent, trustworthy and moral thing to do is to pay out at least some of the promised interest...

 

[Chris008]

INSURER AIA's reply ("AIA on why it rejected client's option to settle matured policy"; Nov 5), to my letter ("Settlement roadblock in insurance policy"; Forum Online, Oct 26), presented four flawed arguments.

First, it stated that its policy contract gives it the right to withdraw the settlement option.

The clause in question exists for administrative reasons only, and implies that the settlement option will be processed only if the policyholder elects it by submitting documentation accepted by AIA. It is not intended for AIA to free itself from its promises.

Second, AIA cited the current low interest rate environment and uncertain market conditions as reasons for rejection.

This is a moot point because as long as a company is still in operation, consumers should not be prevented from obtaining the promised benefits of the product.

Third, AIA claimed that monies due from settlement options are not protected under the Policy Owners' Protection Scheme. However, through the contractual agreement of the policy, the law provides me with the right to exercise my settlement option and to claim any associated monies due.

Lastly, AIA stated that the monies owed need not be paid as they rank after policy liabilities, and equally with unsecured liabilities in the event of insolvency of the insurer. There is no validity to this statement as AIA has not yet been liquidated.

There is little basis to AIA's arguments.

I hope AIA will not take consumers' trust for granted and will uphold the sanctity of contracts.

Goh Choo Seng

Insurer's reply on rejecting option baffling

 

[yamashita]

I'm not affiliated to AIA, but threadstarter I will advise you to remove the word 'scam' from your topic as it may be libellous.

 

[bloodsucker]

Chris, I understand your frustrations, but honestly there is zilch you can do. Unless you are willing to go into a full blown court case with AIA, in which I think your chances of winning are close to zero as well.. Writing to the papers won't help; although yes it can promote awareness of this horrible clause.

AIA has covered its ass well with the wordings, and in fact it can pay all the policyholders zero bonuses for the entire duration of the policy and still get away with it. Of course not referring to those it marks 'guaranteed' bonuses. But most people know that AIA has the most expensive products with the worst returns, so I think the best thing to do is just to let more people know about what AIA does, without getting into trouble with the law.

 

[PruCorgi]

AIA has covered its ass well with the wordings, and in fact it can pay all the policyholders zero bonuses for the entire duration of the policy and still get away with it. Of course not referring to those it marks 'guaranteed' bonuses. But most people know that AIA has the most expensive products with the worst returns, so I think the best thing to do is just to let more people know about what AIA does, without getting into trouble with the law.

If AIA or any company keeps doing this, they won't be in business for long. The goodwill and trust will eventually all be eroded i.e. companies also reap what they sow, just like any individual.

 

[cscs3]

AIA again ! Now a day when I see AIA, I stay away from them.

 

[cscs3]

First I am not AIA agent. haha

Here is my point,

Endowment policy is a Participating policy, it is Investment in nature with a high portion of saving investing instruments.
This means that the interest rate and bonus are NON-Guaranteed.
And with that, the client should already know that the interest rate will not be constant over the years.
If you out yourself in the Insurance Company view, will you still allow yourself to give 4% interest rate if today the finance sector crashed?

This is exactly the reason that we should stay away from their agent/planner.

 

[cscs3]

Beware of the AIA Insurance Endowment policy!
From the Straits Times:

Settlement roadblock in insurance policy
A 21-Year endowment policy of mine with AIA, bought in 1991, matured in July this year. Under the provisions of the contract, I am entitled to elect for any of a number of settlement options, and I had intended to choose one which allows me to re-deposit the maturity proceeds so as to earn an interest rate of 4 per cent per annum.

But AIA informed me that it will not fulfil the provisions relating to that settlement option, citing a clause which gave it the right not to do so.

In my view, the clause is administrative in nature, and should not be used by AIA to justify the non-fulfilment of the settlement options.

Goh Choo Seng

Settlement roadblock in insurance policy

Reply from AIA:
We thank Mr Goh Choo Seng for his feedback ("Settlement roadblock in insurance policy"; Forum Online, Oct 26).

Our policy contract provides that an election made by a policyholder in writing to settle his insurance proceeds with AIA Singapore is subject to acceptance by the company.

Due to the current sustained low interest rate environment and uncertainties in market conditions, AIA Singapore will not be able to accept elections for settlement options.

Settlement option monies are not covered under the Policy Owners' Protection Scheme, and rank after policy liabilities and equally with the unsecured liabilities of the insurer in the event of insolvency of the insurer.

Our policyholders may choose to receive the lump sum payout or consider other AIA products to re-invest the proceeds from the matured policy.

Malcolm Koh
Head of Customer Service
AIA Singapore

AIA on why it rejected client's option to settle matured policy

KNN I call on all HWZ users to boycott AIA. Wonder if Great Eastern and NTUC are conducting the same kind of endowment policies like AIA!

They are mostly the same with AIA on the first price position. Their reputation is really bad especially their customer service department.

 

[benart]

Today AIA had tried to scam me with this policy too and another type of policy. Same in the pc written Insurance quotation and as what you had written here. However it is auto generated now with few numbers key in his pc. They promised 2 minutes time but ended up 30 minutes, not wanting to let me and family go. They promised free gift but ended up acted ignorance if you did not buy. Finally they did not success convincing me to sign and they used free vouchers, free 40" led tv,.... to attract me to immediately sign by saying today is last day offer.
They kept saying everyone wants to buy from them also cannot, too busy with clients,.... many more lies stories that tell you that they are so popular. I did not buy from them AIA because I had a bad experience with my motorcar insurance AIA in 2007. The other car which was in the accident also belong to AIA. I had reported and did all the procedure to AIA to claim that party which is wrong i speeding too fast banging into me a slow moving vehicle. But AIA came back with an unknown legal firm to claim from me for that party. I told them to claim from my insurance AIA too if I am wrong, which they should be doing too but AIA chose to keep pestering me to pay that legal firm. I ended up ignoring them and they have no choice to pester me anymore after the case had expired.

All AIA or other companies agents knows what you are signing. They had read through and understand well on all the papers that you will sign. They have the answers when you ask them but if you did not ask, they will be more glad. Once you had signed then you are obligated and your agent whether a relative or not will lie to you that he also do not know and cannot help. Your first few years of payments to the insurance company have huge commissions to the agents and later small commissions after many years. The amount is so big that anyone cannot avoid this greediness. These agents are trained and brainwashed to do so too. My advise, if you see a relative or friend is an insurance agent, pyramid sales agent or any type of those money hungry agents, just avoid them or you will be sorry. Insurance companies are business company too and making money by taking money from people to invest. They lost, the people lost too. They earn, they only give back little bit or try not to give. I have also seen paternal cousins fight over commissions which is only $400 when they drive new honda accords that worth $100k.

Believe me, in the past I told myself not to buy an insurance but ended up brainwashed and got obligated. I was con 2 times to be worse and very regretted to waste these money. Now, when I see or hear anyone of them, even close relative agents, I decline and runaway. If they suddenly show up at my door, I will ignore because their psychological brainwashing power is too great for most of us. Insurance companies have many types of classes and often conduct them compulsory.

 

[infusionist]

I came from AIA. Understanding the culture there, it is a fantastic place to work in and work for. Top notch campaigns, conventions and marketing. AIA agents are the best paid in the industry with multiple bonuses and different revenue streams.

But, at what expense? of the customers of cos! Have you wondered who pays for the record profits published in papers? Customers. Being the juggernaut of an insurer in Singapore, not paying out par bonuses, and exercising contract clauses to customers is pretty appalling. Indeed they really do pay their staff and agents first before customers.

Oh and do u know their plans are on average 7% more exp than the rest - for the similar coverage? Not to mention most of the endowments are not even capital guaranteed.

Working there, nothing to me felt beneficial to the customer tbh. Just my sharing on this.

 

[RetRace]

I came from AIA. Understanding the culture there, it is a fantastic place to work in and work for. Top notch campaigns, conventions and marketing. AIA agents are the best paid in the industry with multiple bonuses and different revenue streams.

But, at what expense? of the customers of cos! Have you wondered who pays for the record profits published in papers? Customers. Being the juggernaut of an insurer in Singapore, not paying out par bonuses, and exercising contract clauses to customers is pretty appalling. Indeed they really do pay their staff and agents first before customers.

Oh and do u know their plans are on average 7% more exp than the rest - for the similar coverage? Not to mention most of the endowments are not even capital guaranteed.

Working there, nothing to me felt beneficial to the customer tbh. Just my sharing on this.

Thanks for being truthful

Sent from Samsung SM-G900F using GAGT

 

[Shion]

I came from AIA. Understanding the culture there, it is a fantastic place to work in and work for. Top notch campaigns, conventions and marketing. AIA agents are the best paid in the industry with multiple bonuses and different revenue streams.

But, at what expense? of the customers of cos! Have you wondered who pays for the record profits published in papers? Customers. Being the juggernaut of an insurer in Singapore, not paying out par bonuses, and exercising contract clauses to customers is pretty appalling. Indeed they really do pay their staff and agents first before customers.

Oh and do u know their plans are on average 7% more exp than the rest - for the similar coverage? Not to mention most of the endowments are not even capital guaranteed.

Working there, nothing to me felt beneficial to the customer tbh. Just my sharing on this.

I don't like AIA.

Aggressive marketing tactics, expensive premiums but the insurance benefits lack behind other competitors.

 

[SBC]

Tabulated all my 5 polices life policies.
- 2 AIA that are oldest, > 24 years
- 2 NTUC, both > 15 years
- TM Life > 4 years

The returns of AIA are the lowest despite being the oldest.
Most expensive, highest premium $ per $10k SA.

Advised to avoid AIA if really need to buy any insurance.

 

[Shion]

Tabulated all my 5 polices life policies.
- 2 AIA that are oldest, > 24 years
- 2 NTUC, both > 15 years
- TM Life > 4 years

The returns of AIA are the lowest despite being the oldest.
Most expensive, highest premium $ per $10k SA.

Advised to avoid AIA if really need to buy any insurance.

Lowest yet one of the most expensive

 

[infusionist]

Thanks for being truthful

Sent from Samsung SM-G900F using GAGT

hahaha thanks man. I left AIA already. basically I couldn't bear selling their products to even my friends and family or even myself lol.

 

[bibu00]

So why cant he draw out the whole maturity amount in full cash, and just deposit it into CPF or SSB?

Not allowing you to put your money with them is doing you a favor bro. Never put any money with them, what have u learnt from the past 21 years.