ST Forum: Insurance payout fell short of expectations

This was found on the ST Forum on 24th March 2011: "Insurance payout fell short of expectations"

Looks like another case of mis-selling on the surface. Everyone would be siding the customer. However, a more neutral view would be to focus on the app title the writer chose, especially on the word "expectations".

Like most customers, the individual is painting a very one sided story. According to his expectation, it was "$20,000 upon death". Is that all? If it was that simple, he could did a little research and purchase a term plan, period.

What if it included: 1) 100% returns after 20 years; 2) Within a budget of $200/month; 3) With Critical Illness coverage for 10 years; 4) Inclusive of investment like returns; 5) Medical loading due to age 50 years old with medical history, etc. I believe you get the picture.

Imposing all the impossible requirements according to his expectations would also result in the agent designing a plan to please him and herself. We do not have the full information to judge but consumer expectations of insurance is also important.

Further, customer "wanting" a payout of $20,000 in event of his mother's death is highly suspicious.. Anyway, it should be based on needs and not wants. Simply wanting $20,000 does not make it necessary nor sufficient.

He is not the first and definitely will not be the last. Get yourself educated and beware to avoid falling into the same problem.

Also, I do not particularly like how AIA has handled the explanation by brushing it to free look and buyer beware instead of responding with the FNA conducted. It is disappointing to see how the after sales service is. No wonder the industry has such a poor image.