Promoters of the plethora of financial products in the market are fond of dispensing such advice. Nothing wrong with that and most of the sellers are probably well-intentioned.
But it’s also good advice to not rush into buying a financial product until you are very clear about the benefits and the risks involved. If possible, read the fine print and ask a lot of questions before committing yourself.
A retiree has learnt a costly lesson for buying an insurance policy that looked “very attractive” but which he subsequently found to be very “lopsided” in favour of the promoters.
Wilson Koe, 56, said he would be more than RM20,000 poorer because he was taken in by the sweet talk of a customer service officer when he visited UOB to place an FD account.
Relating his plight to theantdaily, Koe said he paid the RM100,000 premium for five years upfront for the PRUhorizon policy by Prudential which guarantees RM200,000 upon maturity in 20 years’ time.
To his shock, he learnt that he would be getting back only about RM72,000 for surrendering his policy now, before the end of the first year.
“The customer service officer recommended this plan as an alternative…like not putting all the eggs in one basket.
“Thinking that I am covered for RM200K (death benefit) because it’s an insurance policy, I decided to sign up. So, the officer ran through the benefits (called Illustration of Total Benefits) but the Surrender Policy was never brought up,” he said.
“Now that I have time to digest the policy in totality, I am shocked to see that there is no insurance coverage but only death benefit.
“The longer you survive the better it is. Up to the first 10 years of survival, the death benefit is only RM132K. If I place RM100K in an FD for 10 years, say @ 3%, I would get more. Hence, without insurance coverage (medical benefits, etc), it is foolish to take up the policy,” he said.
“Now, the worst part is the surrender value where 70% of the premium paid is gone. I feel that the policy is a gamble...if you survive for 20 years then only you get the full benefit. In between, up to nine years, the policy holder gets back what he had put in and is punished severely for pulling out,” said Koe, who retired as a factory general manager last year.
Koe said his mistake was that he did not go through the details before signing up but he wondered how such a “lopsided” policy could have been approved by Bank Negara.
“As far as I am concerned, if it comes from an insurance company, how could it be without insurance coverage?” he said.
Koe said he was surrendering the policy because he needed money for some family emergencies.
“If I surrender now I will get back RM72K, but if the policy enters the second year I will get only RM57K,” he added.
“I hope other people won’t be so easily taken in by so-called retirement plans marketed by insurance companies,” he said.
I got cheated by Prudential. I have emailed them. The CEO of Prudential Malaysia replied to my email saying that the Director of Customer Engagement will get back to me. Unfortunately, they all have a habit of passing around my requests and they don’t honour their words. Just talking and not doing. They assured me this morning that I would get a reply. Too bad for me and my money.
ReplyDeleteMy advise to all, never invest your money with Prudential. Always get a time frame for reply or payment. Never trust these people, I have dealt with them and feeling cheated.