(Help) Lost significant money from insurance

[DarkStarer]

Looking for advice.

Dad was being introduced to a leverage arrangement, where he takes up a loan and use it to service an insurance policy, and in the normal interest scenario, he "supposedly" will earn money from the difference of insurance yearly payout and loan repayment. This was arranged as a retirement where his money will grow an annuity for him.

Loan installment starts from Day 1, insurance payout starts from Year 5.

**** hits the fan when interest rate increase so we brought out the policy to see if can cancel. I suddenly realised he was sold an incredibly losing deal of policy, even without the interest rate increase, he already lost. It is a legacy policy, where the guaranteed value at the initial stages of policy is 80% of premium.

So not only was the policy already loss 20% at Y1, the yearly payout takes a damn long time to recover the 20% + loan interest paid. The kind where this lifetime he cannot see money type. And this is talking about recover money, not even earning interest. The only time this loan and policy arrangement can be positive return is when he dies where the death benefit is 105%.

It is a policy with 35 yr maturity and it was sold to him when he was 65.

I am dead shocked when I knew of this arrangement. I was not aware of this 80% loss at surrender. My dad used to handle my insurance and I trust him enough to know his numbers.

I went down to bank to stir a bit already. They will get back to me with best scenario and why they would sell this rubbish policy to my dad knowing that there is no way he can take back his money.

I am hoping to seek advice from this forum on what option and recourse I can go for.

 

[dry_county]

All the best zeh zeh….i dun have any advice….

 

[Encouragesome1]

Looking for advice.

Dad was being introduced to a leverage arrangement, where he takes up a loan and use it to service an insurance policy, and in the normal interest scenario, he "supposedly" will earn money from the difference of insurance yearly payout and loan repayment. This was arranged as a retirement where his money will grow an annuity for him.

Loan installment starts from Day 1, insurance payout starts from Year 5.

**** hits the fan when interest rate increase so we brought out the policy to see if can cancel. I suddenly realised he was sold an incredibly losing deal of policy, even without the interest rate increase, he already lost. It is a legacy policy, where the guaranteed value at the initial stages of policy is 80% of premium.

So not only was the policy already loss 20% at Y1, the yearly payout takes a damn long time to recover the 20% + loan interest paid. The kind where this lifetime he cannot see money type. And this is talking about recover money, not even earning interest. The only time this loan and policy arrangement can be positive return is when he dies where the death benefit is 105%.

It is a policy with 35 yr maturity and it was sold to him when he was 65.

I am dead shocked when I knew of this arrangement. I was not aware of this 80% loss at surrender. My dad used to handle my insurance and I trust him enough to know his numbers.

I went down to bank to stir a bit already. They will get back to me with best scenario and why they would sell this rubbish policy to my dad knowing that there is no way he can take back his money.

I am hoping to seek advice from this forum on what option and recourse I can go for.

Is it just? For insur product there is a 14 day free look period for consumer to go cancel his buy
https://www.lia.org.sg/consumers/ch...ance companies grant a,if it meets your needs.

 

[BiomedicalPasta]

Let me guess? OCBC?

Was approached by an ocbc staff after the previous one left and he took over. My parent has a single premium and started to get the monthly payout and that is when he suggested to buy another policy thru a policy loan and that will increase the coverage to a million dollars.

My parent heart itchy because it will mean leaving behind a million dollars for us but lucky I stopped it in time. Guess what, interest rate soared and my parent would be in deep **** with no income but needing to service the extra loan amount. During the selling meeting, the staff drew some graph and say interest rate has historically never reach so high until we need to service the loan with cash so it is almost safe. Load of ********

 

[dambio]

Looking for advice.

Dad was being introduced to a leverage arrangement, where he takes up a loan and use it to service an insurance policy, and in the normal interest scenario, he "supposedly" will earn money from the difference of insurance yearly payout and loan repayment. This was arranged as a retirement where his money will grow an annuity for him.

Loan installment starts from Day 1, insurance payout starts from Year 5.

**** hits the fan when interest rate increase so we brought out the policy to see if can cancel. I suddenly realised he was sold an incredibly losing deal of policy, even without the interest rate increase, he already lost. It is a legacy policy, where the guaranteed value at the initial stages of policy is 80% of premium.

So not only was the policy already loss 20% at Y1, the yearly payout takes a damn long time to recover the 20% + loan interest paid. The kind where this lifetime he cannot see money type. And this is talking about recover money, not even earning interest. The only time this loan and policy arrangement can be positive return is when he dies where the death benefit is 105%.

It is a policy with 35 yr maturity and it was sold to him when he was 65.

I am dead shocked when I knew of this arrangement. I was not aware of this 80% loss at surrender. My dad used to handle my insurance and I trust him enough to know his numbers.

I went down to bank to stir a bit already. They will get back to me with best scenario and why they would sell this rubbish policy to my dad knowing that there is no way he can take back his money.

I am hoping to seek advice from this forum on what option and recourse I can go for.

Got protect full capital boh?

 

[Zinna]

Before we had scams, we had banks

 

[stanlawj]

Dad was being introduced to a leverage arrangement, where he takes up a loan and use it to service an insurance policy, and in the normal interest scenario, he "supposedly" will earn money from the difference of insurance yearly payout and loan repayment. This was arranged as a retirement where his money will grow an annuity for him.

I am hoping to seek advice from this forum on what option and recourse I can go for.

Stir as much s**t as possible about the bank on social media until it reach mainstream news ST or Mediacorp channels.

 

[BO_KO_LENG]

i guess is bite the bullet till interest rates come down? surrender confirm bo hua

 

[whuttt]

Is it this kind of insurance is more to provide for the family when the insured dies, rather than a kind of savings?

 

[Epee]

Cut loss and get out. The Y1 loss is normal because insurance is supposed to be long term. That loss is actually the comms for the agents involved.

You can complain to MAS that the agent sold a 35yr policy to somebody who is 65. Does it make sense? See if MAS wants to mediate it for you. Good luck.

 

[TradeHippo]

Let me add, first 80% guaranteed does not mean u will get back only 80%, its just the worst case scenario, maybe if the market crash and the investment that the insurance invest in to get the return is terribly bad then u get 80%. You should get more than 100% given the inflation in a normal case, but minus the interest from loan it will surely be negative. I dont even know that a loan is possible and its my first time hearing it.

Also a product is typically structured this way: For example you have to pay 10k for 5 years. In the first year you paid 10k, and 5k goes into the pocket of the sellers. Thereafter, the 10K for the next 4 years goes into the actual product. Thus the guaranteed amount is low since you paid 5k to them already as fees, which is clearly written in the docs your dad signed blindly.

You can report this to FIDREC and cite misselling. However, banks make your dad sign every single page of the docs so they are well protected. Though you should still try FIDREC . Institutions prey on the less knowledgeable and naive people. Otherwise where do you think those profits come from?

 

[shidenx]

What kind of insurance? Got investment aspect or purely coverage?

 

[Mr.Kopi]

seriously... all those insurance peddlers sitting at bank really cutthroat

 

[Asy1um]

The insurance zeh zeh that sold him the policy must be chio bu, he dont even think this policy term is way too long?

 

[Forever84]

Isn't this a premium financing product? I thought this product is mostly for well to do customers?

 

[Epee]

Is it this kind of insurance is more to provide for the family when the insured dies, rather than a kind of savings?

This is a leveraged investment where you borrow money to invest in whatever the agent says. It's a very risky move. You pay interest on the loan but yet you don't get any guaranteed returns on the investment.

The loan part is just to make the investment bigger so got more 'returns'.

 

[LWZ]

What does your dad think ?

 

[Nefalrin]

No wonder there is CPF Life.

Many old people cannot invest wisely ..

 

[whuttt]

This is a leveraged investment where you borrow money to invest in whatever the agent says. It's a very risky move. You pay interest on the loan but yet you don't get any guaranteed returns on the investment.

The loan part is just to make the investment bigger so got more 'returns'.

So complicated. Me not rich enuf for the banks to sell me these.

 

[mgx-alander]

35 y maturity to a 65 retiree? No wonder they r scums

I will repork ma$ with wot until the agent or banker license get revoked