On the Straits Times yesterday, there was an article about an admin executive’s whose yearly insurance premium is actually higher than her pay
Quick summary – Admin executive Mdm Han visited UOB branch in 2013 to open account or fixed deposit but purchased an endowment product that comes with freebies such as an air-fryer and a steamer. Attracted by the 4.75% projection, she signed up for the plan but later realized that the insurance premium was unaffordable for her
Enraged by this piece of rather terrifying news, I recalled that a similar thing had occurred on my mother.
Some years back, my mother had gone to the bank to renew her fixed deposit. She was introduced to Structured Deposit and was made to believe that it was the same as fixed deposit.
A couple of years went by and she realized that the bank had not sent her any letter about the deposit maturity.
I enquired with a friend who was working in the same bank and realized that it was actually Structured Deposit. Thus, we made arrangement for my mother to cancel the plan, paid some adminstration charges but thankfully, did not lose any of the capital.
Many years had passed since the occurrence of this unhappy episode
Seeing a similar episode but with insurance sale at a bank made me feel rather peeved.
It seemed that nothing had changed with the banks and sales tactics.
The banks’ sales strategy still evolves around older generation and their deposits
Of course, it takes two hands to clap.
Some online forum actually pointed out that Mdm Han was attracted by the freebies and got blindsided. Otherwise she would not have signed on the dotted line.
Some had also highlighted that Mdm Han could have made sure she understand the plan before purchase.
To a certain extent, I would acknowledge that those were valid observations
However, at the same time, my personal feeling is that there are a certain demography in the Singapore population that has no interest or access to financial information.
For aged people, they have lived in a world that is vastly different from the information technology era that we are currently in.
It is difficult for them to access and also likely of no interest to them about financial planning.
All they want is probably to spend their time with their loved ones while keeping enough money safely for afford simple luxuries.
That’s why they usually keep their monies in saving or fixed deposit accounts
That is also precisely the reason I am so enraged by the news article.
I feel that this particular demography of the population cannot be reached & educated as they are unlikely to go on the internet or read financial books.
Thus, they become easy prey to the tactics of unscrupulous sales people (not restricting to insurance or bank).
There is nothing much that we can do about it.
Perhaps we can remind our loved ones who are in this vulnerable group to check with us before making any purchase.
If you have any similar horror tales, please share with us for learning.
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