Former Singaporean Presidential Candidate Blasts ILAS, Whole Life, and Other Ripoff Insurance Products

A Profile of Tan Kin Lian

Tan Kin Lian

Before running for President in 2011, Tan Kin Lian spent 30 years as the CEO of NTUC Income, which he helped transform into one of the largest insurance companies in Singapore. The success of the company was driven in part by TKL’s determination to give consumers fair prices, which was accomplished by keeping operating expenses low.

In an interview with Yahoo News, he explained that “NTUC Income paid insurance agents lower commission rates than the market industry and that his own salary was half that of his counterparts”.

TKL left NTUC Income in 2007. Shortly afterwards, the Lehman Minibond scandal struck Singapore. Approximately 10,000 exploited investors lost most, if not all, of their savings. Utilizing his experience and influence in the financial community, TKL helped victims fight for justice by organizing public rallies and petitions.

TKL Rally

TKL later set up FiSCA (the Financial Service Consumer Association), a non-profit organization whose mission is to “promote financial education and protect consumers from unscrupulous practices in the financial services industry.”

TKL is an active blogger who writes on a wide range of topics, but he gives special attention to problems in the insurance industry. His insights and opinions are backed up by his 30 years of experience as an insurance CEO.

Powerful Statements by Tan Kin Lian

TKL knows exactly what he is talking about when he states unequivocally and repeatedly that all, I repeat, all ILAS products are bad. Below is a screenshot from his Facebook page(Note that, in Singapore, ILAS is usually called ILP, which stands for Investment Linked Policy.)

the flow and name of the game

TKL’s comments upset a lot of insurance agents, but he does not back down when they come onto his page and accuse him of being wrong.

All ILPs look bad

If you wish to rip off your client, to earn a high commission, you can do it your way

ripped off and conned by insurance agents who masquerade as financial advisers

Below, TKL explains how unethical agents deceive consumers, and then he calls out regulators for failing to understand and effectively address this problem.

selective disclosure and telling half truths

He exposes insurance companies for deliberately complexifying products to confuse and mislead consumers—and even agents.

consumer will be taken to the cleaners

When people ask for TKL’s help, he gives clear and easy-to-understand advice.

takes away two years of your hard-earned savings

In a blog post, TKL talks about the story of Ms. Koh, whose “shocking experience reflects what has been happening to tens of thousands of unsuspecting [Singaporean] purchasers of many ILP policies.”

His comment suggests that Singapore has been suffering from the same plague as Hong Kong, on a perhaps equally large scale.

In a Facebook post, TKL asks, “I do not know why the financial adviser, who was supposed to look after the interest of the client, can advise the client to invest in such a bad financial product, i.e. ILP?”

Of course TKL knows the answer, but mind-bogglingly, regulators don’t seem to get it.

In an excellent article written for The Online Citizen, TKL explains that:

“Many families are being grossly overcharged for the modest financial protection offered by the life insurance policy. After deducting the high expenses, their net savings do not earn a sufficient yield for them to live on during their retirement.”

He goes on to criticize several different insurance products, saving the worst for last:

“The investment-linked policy is equally bad for the policyholder. I have seen benefit illustrations for these policies where the reduction in yield is 4% or more…This is taking too much from the unsuspecting consumer. It amounts to daylight robbery.”

He then offers several points of advice, the first one being this:

“Do not buy any high-cost life insurance policy. High-cost life insurance plans are those where the policy combines life insurance protection with savings. Low-cost life insurance policies – term insurance policies – cover protection only.

Examples of high-cost life insurance policies include whole life, endowment, critical illness, education and investment-linked policies, where many months of your premium are used to pay the insurance agent’s commission.”

In a piece for the Straits Times, TKL rhetorically asks:

“If an insurer or its agent can earn so much by selling a whole-life or investment-linked policy, why should they want to sell term insurance?”

Obviously, an agent won’t want to, unless commissions are equal or else banned altogether.

Further Reading

For those who wish to learn more about TKL, here are links to different pieces he has written:

Life Insurance before and Now (Blog Post – June 12, 2014)

How to stop mis-selling of life insurance policies (Blog Post – June 4, 2014)

Consult a Fee-Based Financial Adviser (Blog Post – May 2, 2014)

Shocking experience with Investment Linked Policy (Blog Post- Dec. 28, 2012)

Ms Koh’s Story (Facebook Post – Dec. 28, 2012)

Rebuttal to Adviser (Facebook Post – Nov. 17, 2012)

Zurich Vista Plan (Blog Post – July 14, 2012)

Buying the right life insurance policy (Blog Post – Sept. 15, 2011)

Avoid financial advisers (Blog Post – Jan. 31, 2011)

Comparing whole life and term insurance (Blog Post – Dec. 7, 2010)

Why insurers, agents may turn a deaf ear to SM Goh’s appeal (Blog Post – Oct 27, 2010)

The Truth about Life Insurance (The Online Citizen – May 7, 2008)

Interviews

Financial Planning for Singaporeans – Interview with Mr Tan Kin Lian, President of FISCA (Big Fat Purse – May 14, 2013)

I was unfairly criticized: Tan Kin Lian (Yahoo News – Aug. 10, 2011)

In Conversation with Mr Tan Kin Lian, CEO of NTUC Income (Tech in Asia – Oct. 25, 2006)

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