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Review of Book by TKL

>> Monday, September 19, 2011

The 2011 Singapore presidential candidate has published a book "Get Value From Your Life Insurance". Being the previous CEO of NTUC Income for over 30 years, I hope that it would prove to be a very insightful read. A book review recently mentioned several points which discouraged me to pick it up.

The author, Mr Tan Kin Lian, became the general manager (subsequently re-designated as CEO) of NTUC Income Insurance Co-Operative in 1977 at the age of 29 and remained in the same position for 30 years.
- I wish someone would teach me how to qualify to be a CEO of a major company at age 29.

In the book review, the author mentioned that deductions from premiums should not be more than 20%.
- A quick check with some companies is that no such product exists and there is no suggestion as to where this is available. Quite difficult for a layman to get his hands on all available products in the market.
- You pay peanuts, you get monkeys. Some would like to pay more for the better service, efficient claim processing, branding, etc. That is why some eat at hawker centers, while others pay 10x more for the same thing at posh restaurants.

Buy term and invest the rest YOURSELF
- This is general advice but some may be uncomfortable with term.
- Anyway, investing yourself requires some wisdom. Some may prefer to leave it to the subject matter expert who can monitor as well. Trying to invest yourself may be equivalent to gambling without the proper knowledge, skill and time.

Know the Half Truths That Insurance Agents Are Trained to Tell
- This is brushing the whole industry which he led for 30 years one color because of the black sheep which did come about overnight.
- I do agree that the number of these black sheep is quite substanial, but it takes two to clap. Clients also tend to already have a negative mindset, unreasonable expectations and unwilling to take a geniune interest in financial planning. They also give half truths of their financial status.

Agents have a conflict of interest
- It is a industry practise, name one insurer that sells insurance products not through commission? NTUC Income previously?
- Think we are all well aware of the fact. But what does the general public like myself need to do to avoid this conflict?

Do Your Own Analysis and Focus on the Guaranteed Portion
- This seems to contradict "buy term and invest the rest yourself".
- Anyway, by focusing on the guaranteed portion only, it is normally equal or less than the total premiums paid. Then how? Why are these products even approved to be sold?

Overall, it provides mainly to the layman information only, no solution. However, I believe the general public would not be interested in such a book. Whereas for those practioners, it is simply stating what is generally known already.


Calvin September 20, 2011 at 5:18 PM  

Hi Lau,

I actually did a review on the same book in my post at

Like you, I am not sure if any of the products exist at which the deduction of premiums are under 20%. Not too sure if that's an ideal scenario for him or that the industry currently has such products.

I believe the conflict of interest is a reminder that the agent has interests in serving the most expensive product. As an insurance buyer, one should educate oneself and make sure one is comfortable with the premiums rather than let the agent cajole into buying an expensive, unsuitable product. This especially applies to new agents, relatives who always use "helping them to hit target" as the bait.

I for one believe in buying term and investing the rest yourself. Knowledge is readily available if one is keen to learn. If not, one may consider engaging a good financial adviser who is fee based rather than commission based.


Lau September 21, 2011 at 8:25 AM  

Hi Calvin

My "review" was from yours. Where u intro the bk. But don't think I'll b picking it up due to the stated reasons.

Anyway, fee based agents still get comm as the insurer still distributes their products as such. Of course u can rebate, though that is still not ideal. Cm can choose for highest rebate n who determines the market rate for fees.

Calvin September 21, 2011 at 11:55 AM  

Ah Ic, I didn't read that carefully. Yeah, the book is a little general. But, I still picked up some useful points from it. Maybe fee based financial planners should not be entitled to commissions from the insurance company?


Lau September 21, 2011 at 12:17 PM  

Not possible. It would render their distribution channel useless. I.e their agents. People will take free advice and buy DIY. Premiums without comm will be so much cheaper and comm will be so transparent that everyone will be upset for paying more.



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