Sat, Aug 29, 2020 – 5:50 AM
FINANCIAL advisers here who are pushing critical illness (CI) insurance plans with misleading claims over changes to CI definitions risk tarring the reputation of the industry, especially as more marketing of products is flowing to the greyer areas of social media.
In fanning misleading claims that fresh changes to CI definitions will hurt the scope of coverage for future plans, such financial advisers' sales tactics can bring about additional stress at a time where customers are confronted with financial uncertainty over the Covid-19 crisis.
The Business Times understands that some financial advisory representatives, as part of their advisory process, have conveyed to customers that the scope of CI coverage would be narrower under the new set of CI definitions that came into effect on Wednesday, and that making claims would become more difficult.
These representatives were found to be using such reasons to pressure customers to purchase insurance policies by Aug 26.
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While it is important to be adequately insured, most comprehensive CI plans in the market that meet the Life Insurance Association (LIA) Singapore's recommended cover of about S$316,000 for the average Singaporean come with considerable annual premiums of around S$1,200 to S$3,000 in some instances. This rises for older policyholders.
Given this, customers should not be rushed into committing to a CI plan on overplayed fear of claims becoming more difficult to make if they purchase a plan after Aug 26.
The Monetary Authority of Singapore (MAS) last week confirmed to BT that it has issued a warning to all MAS-licensed and exempt financial advisory firms, including insurers, over misleading sales practices relating to CI coverage.
Further checks by BT found that some representatives have in recent weeks turned to social media to generate buzz on changes to CI definitions, which include public reminders that this would be the "last chance" to secure CI policies before the changes kick in. Such content were often supplemented with countdowns to the Aug 26 "deadline".
As it is, the growing use of social media for insurance sales and advisory in Singapore has brought some misselling risks to the fore amid regulatory grey areas in managing financial content online.
Industry watchers have flagged the overgeneralisation of cookie-cutter financial content, cherry-picked data, and misinformation on platforms such as Instagram and LinkedIn, as reported by BT in June.
In response to recent queries from BT, the Financial Industry Dispute Resolution Centre (FIDReC) – which handles the mediation and adjudication of consumer disputes with financial institutions here – said it has not received enquiries or complaints concerning the upselling of CI insurance policies for now.
But this may be due to the fact that before a claim can be filed at FIDReC, a complainant must first have approached his or her own financial institution to resolve the complaint. The financial institution has up to four weeks to attempt to resolve the complaint, said FIDReC chief executive officer Eunice Chua.
Insurance policies also have a review period within which consumers can change their minds and obtain a refund of their premium if they find that a policy is not suitable for them, shRead More – Source