I get disturbed if I get to know of any advisers asking their clients to terminate their Whole Life Plan or ILPs for certain reasons. I'm not against terminating an insurance policy if due diligence been made but my observation is that some advisers do not advises properly before asking their client to terminate their existing policy.
One common objective of these advisers who asked their clients to terminate their Whole Life plan or ILP is by asking them to buy another Limited Premium Term Whole Life Plan. Even if they can’t convince them to surrender the existing policy, they will still tell them to get one more whole life plan as if a limited premium term whole life plan is a “must have” type of policy.
When these advisers see a regular Whole Life Plan, they will emphasize to their client that they have to pay whole life for their whole life plan and why not switch to a limited term one? They will also harp on the point that it will tough to pay when you are retired and you may have to surrender the policy when you do not have money.
When they see an ILP, they will keep emphasize to their client that they will have to pay a high mortality premium when they reaches 60 or 70 years old and focus on the fact that the mortality charges will exceed the premium paid at certain age. They will further harp on the point that they will not get the necessary cover when they are old. They will also like to say “When you are old, this is the time you need insurance most because you have the highest chance of contracting it”.
What they said are not entirely untrue and some of them sincerely do have client’s interest at heart but they may not realize the implications for doing so.
Some of these advisers did not bother or do not know how to analyze that existing policy’s future projections or failed to see the benefits of the existing plan in their current situation. They simply harp on the “Whole Life” premium payment and “High Mortality cost” issues.
The above are often said by newer advisers who were taught by their manager to say all these things. The new adviser may innocently do what he/she thought is right and best for client based on what their managers teach. It is even more unfortunate that some of these managers may be practicing the above themselves and passes the wrong message to all their new advisers.
I want to reiterate that I’m not saying that all advisers or managers are what I described above but these are things that I had observed over the years on some advisers. I’ll write more in my next posting about this issue.
(I’ll not accept any comments that are not constructive)
Tuesday, October 27, 2009
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1 comment:
Both wholelife and regular ILPs have high mortality charge when the policyholders reach 60.
The insurance agents who are churning policies are cheating on their clients. The agents lie that whoelife mortality charge doesn't increase. It also increases like the regular ILPs except that the policyholders are not told and left in the dark whereas regular ILPs are transparent.
In fact regular ILPs are better than limited payment wholelife becuase policyholders can decide the term .
Eg; Policyholders can decide 5 years instead of 10 years as this minimum term is common to most companies. They can continue the premium as and when they like.
So you see the agents are lying to you about wholelife and regular ILPs.
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