Who can we trust? Even a long time friend since primary school is not spared :(

Hi Albert,

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We have written a blog with regards to this.

https://www.policywoke.com/post/what-you-should...

Many factors at play here. I guess it's a timely reminder for the public, and what to take note of.

1. Black and white: In this era of digitalization, all policies should be viewable via an online portal of sorts, regardless of insurer. So I guess in a way, the policy owner should also do a check to ensure that whatever policy he/she is buying, is eventually reflected in the relevant online portal. Also, a policy illustration should always be available for checking prior to any commmitment to a policy. Independently validate what you have been told (at the very least, check that the policy does exist and is not bogus; refer to the Sally Low case as an example https://www.straitstimes.com/business/indonesian-couples-lawsuit-against-aia-marathon-hearing-ends)
2. Realistic returns: The returns on a policy, can only be that high, even if you buy a second hand policy almost at maturity, an internal rate of return will be single digit (per annum). 16% returns in a year is unheard of. Greed is, unfortunately, the typical reaction upon hearing such returns, which is why these stories pop up once in a while. Don't be blinded by greed. Stop and question if it makes sense. If the stock market can't even deliver 16% p.a. on average, how can an insurance policy do that?
3. Dealing with a regulated person: Anyone who can set up a contract of insurance has to be regulated by MAS, and checks can be done via the MAS register of representatives at (https://eservices.mas.gov.sg/rr). If someone does not have a valid RNF number or is not licensed for the appropriate activity, one should be careful dealing with the person as you will not have any recourse even if you complain to MAS. Having said that, even if one is licensed, it does not mean that the right advice will be dispensed. So consumers also need to have some basic knowledge so that they won't be taken for a ride. I'll spare the details.
4. Dealing with a regulated entity: The MAS investor alert list (https://www.mas.gov.sg/investor-alert-list) exists for a reason. I won't say too much here, but regulated companies would not be appearing on that list.
5. Knowing how an insurance contract works: The contract is between the insurer and the insured/assured. Not the insured and the advisor. The advisor helps to facilitate things and is supposed to collect information from the insured/assured so that the insurer will be able to make a complete and thorough assessment of the application before deciding to offer the contract or not (especially in cases where medical underwriting is required) Thus, any payment of premium is to be addressed to the insurer. An advisor can collect a cheque on behalf of the insurer, but the payee should always be the insurance company. Payment to an insurer should be to the designated bank account of the insurance company (if applicable) and NEVER an individual.

Unfortunately, incidents like these occur from time to time, and often, such news tends to make headlines.