Hong Leong Income Builder Plan

Sharon is 22 years old. She does not have a steady job. She is still depending on her parents when her odd jobs income do not meet her expenses. In fact, Sharon is spendthrift. She likes to buy branded clothes, go clubbing and drink at starbucks.

Her friend, Magdalene is also 22 years old. Through Sharon's social friend, she came to know Magdalene, who has just started to earn extra income by joining Hong Leong Assurance as life insurance agent.

One day, Magdalene called up Sharon to have lunch with her. Magdalene showed her concern for Sharon's way of spending, and encourage her to take up Hong Leong Income Builder Plan. This plan is popularly promoted by HLA agents as well as HLB's sales officers. Magdalene proposed to Sharon that she should save RM200 every month with her for 12 years. On the first anniversary, Sharon will start getting dividend from HLA.

Sharon went home to ask permission from her mother to take up the plan, and her mother agreed. After paying for 2 months, Sharon was not in good term with her mother. Her parental assistance of pocket money halts.

When Sharon talked about this with me, I pointed out to her that this saving plan is a wrong choice for her. She should keep her money in the bank as she doesn't have steady income. Furthermore, an insurance saving plan is not a good idea for saving at all. When she needs money, she will not be able to withdraw the premiums that she has paid. She should have deposited her money in the bank. It is also ridiculous to ask premium from mother to 'save' in the saving plan.

I notice that many consumers when heard of the product name "saving", they will assume that it is similar to saving account in the bank. Agents or bank officers will seldom point out to them that they are at a loss should the policy be discontinued.

On my advise, Sharon stops the plan losing a few hundreds. When I called up the young agent, she even told me that Sharon can get back 70% of her premiums paid. From here, I concluded that this young agent doesn't even know her products well, how can she give correct recommendation to her customers?

I wish Bank Negara has better control of the insurance agents and bank officers selling insurance plan. Should there be any complaint or mis-selling, the premiums should be refunded to the customers.