Thursday, June 08, 2017

Buying a policy that he does not understand or need

Mr. X sent an email to me. He had bought a policy and asked me if it was "worth keeping". The consultant who sold him the policy had kept the policy document from him until after the 14 day free look period expired. He was not able to exercise the cancellation. What should he do?

I asked Mr X to scan the benefit illustration for me to look. He took photos using his mobile phone in various odd directions. I replied to him that I cannot read it. (It was quite inconsiderate of him to expect free advice and provide the information in a shoddy manner).

I asked Mr. X to telephone me. He did. He said that he had bought the life insurance policy at a road show. He did not understand what he was buying but bought it anyway on the recommendation of the consultant. He paid $1,200 as an annual premium. He is still single but expect to get married soon.

Mr. X is totally lost. He would probably have to lose more than $1,000 on this bad mistake. Frankly, I am not able to help him in this complicated situation.

I had warned many people on the following:

1. Do not buy any insurance policy on a road show.
2. Attend the financial planning talk organized by FISCA
3. Read the financial planning tips in the FISCA website.

Many people ignore my advice. When they get stuck with a very costly decision (like what had happened to Mr. X) they expect me to help them. Sorry, it is already too late.

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