<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Oct 5, 2008
small change
</TR><!-- headline one : start --><TR>The day I almost lost my head
</TR><!-- headline one : end --><TR>Swayed by the crowd, I nearly gave up my eight AIA policies but good sense prevailed </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Lorna Tan, Finance Correspondent
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</TD><TD width=10>
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->I knew something was brewing when I received a text message from the newsroom on the morning of Sept 16, asking me to check out what was happening at the office of American International Assurance (AIA).
Word had got round that many customers were queueing up at the customer service centre in Finlayson Green.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>Disturbing fact
What I found disturbing was that a lot of customers did not bother to seek professional advice before surrendering their policies. Many had rushed to AIA's offices because their friends or relatives alerted them to the possible collapse of AIG and the dire consequences of losing their hard-earned savings. What a loss it would have been
I am glad I kept cool and was not swayed by the noise in the market. Terminating my policies early would certainly have resulted in a huge surrender penalty. As all of my family's AIA plans are whole life policies, they are structured as long-term contracts. An early surrender would have meant losing a significant portion of my premiums and missing out on future annual and maturity bonuses. I would also have lost the critical illness protection.
</TD></TR></TBODY></TABLE>Earlier, news had broken that AIA's parent, American International Group (AIG), was on the brink of collapse and scrambling for financial aid. The future of AIG, and thus AIA, appeared bleak.
When I got to the AIA building at 11am, there were more than 100 people there. Most had rushed to AIA to surrender their policies.
About 40 were in line to get a queue number while the others, who had already got their numbers, were waiting to be served by AIA staff. As they had to wait two to three hours before being attended to, some left after taking their numbers, intending to return later.
The crowd was orderly but unhappy. Faces looked strained, anxious and worried. While some people were tight-lipped, others spoke in hushed tones. Some were on their cellphones, urging relatives and friends with policies to join them in the queue.
Strangers became friends as they exchanged notes on what policies they held and the predicament they were in.
What I found disturbing was that many of the customers did not bother to seek professional advice before surrendering their policies.
Many had rushed to AIA's offices because their friends or relatives alerted them to the possible collapse of AIG and the dire consequences of losing their hard-earned savings, which were embedded in policies, such as whole life and endowment, as cash values.
AIA was partly to be blamed for this.
These customers did not contact their agents for advice because the original agents who sold them the policies had left AIA and, somewhere along the line, little or no effort was made on the part of AIA and its agents to contact these 'orphaned' policyholders.
Standing in the crowd, I found myself being sucked into the atmosphere of fear, too.
After all, I am an AIA customer. My husband and I own eight AIA policies, all bought in the mid-1990s. We also have a car insurance plan with American Home Assurance, the non-life insurance subsidiary of AIG.
We used to have 10 AIA policies but I surrendered two last year after deciding that the returns were too low - partly because of the low sums assured - to justify holding them.
I decided to hold on to the others. Despite owning them for more than a decade, none of the policies has broken even and two have critical illness riders on them. We have already paid more than $100,000 in premiums for all eight.
Overwhelmed by the crowd's anxiety, I debated, for a moment, if I too should take a queue number. After all, I was going to spend the next couple of hours there observing the crowd for a story I had to file later.
But good sense prevailed. I called some financial experts, and after discussing with them, was convinced that since AIA's assets and life funds are in Singapore, they would be ring-fenced here and out of AIG's reach.
In the worst-case scenario, AIG may simply opt to sell its life subsidiaries in Asia.
After all, AIA, with its 2.8 million policies and more than one million customers, remains an attractive business proposition which I am sure its rivals would love to get their hands on.
And if that happens, my family's AIA policies would end up being managed by another insurer. Whichever happens, my cash values should be safe.
Among those in the crowd was AIA customer John Tan, who told me he was there because he wanted to 'cut loss'. Better to get some cash now than get possibly nothing if AIG were to collapse, he said.
I pointed out that he would lose all his insurance cover, including his critical illness protection, if he surrendered his four AIA policies since he was not insured elsewhere. He looked worried.
I came across AIA customers who could not figure out if their policies had broken even - that is, whether their cash values had exceeded the premiums they had paid so far.
I ended up helping them to navigate through their policies and highlighting the guaranteed and non-guaranteed portions of the illustrated cash values.
Back in the office later that day, I received e-mail and text messages from friends asking if they should surrender their policies.
My answer was: I have several AIA policies but I am not in the surrender queue.
I finally went to bed at 2.30am, convinced that the United States government would not leave AIG in the lurch. Sure enough, a few hours later, the US announced its bailout plan for AIG to the tune of US$85 billion (S$123 billion).
Over the next few days, AIA issued statements and took out full-page advertisements in newspapers reiterating that it has sufficient capital to meet all policyholders' obligations.
By the end of that week, more than 20 customers had reinstated their policies. At last count, a few thousand AIA policies have been surrendered.
I am glad I kept cool and was not swayed by the noise in the market. Terminating my policies early would certainly have resulted in a huge surrender penalty.
As all my family's AIA plans are whole life policies, they are structured as long-term contracts. An early surrender would have meant losing a significant portion of my premiums and missing out on future annual and maturity bonuses. I would also have lost the critical illness protection.
When it comes to financial investments, customers should never make hasty decisions, be it buying or selling them.
Of course it is easier said than done. Even someone like me, who has been covering financial matters for eight years, almost lost my cool too.
=> In other words, the 154th only know how to talk cock and perform ant ass for the Familee. They dun really believe in what they write themselves. *shake head*[email protected]
small change
</TR><!-- headline one : start --><TR>The day I almost lost my head
</TR><!-- headline one : end --><TR>Swayed by the crowd, I nearly gave up my eight AIA policies but good sense prevailed </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Lorna Tan, Finance Correspondent
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->I knew something was brewing when I received a text message from the newsroom on the morning of Sept 16, asking me to check out what was happening at the office of American International Assurance (AIA).
Word had got round that many customers were queueing up at the customer service centre in Finlayson Green.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>Disturbing fact
What I found disturbing was that a lot of customers did not bother to seek professional advice before surrendering their policies. Many had rushed to AIA's offices because their friends or relatives alerted them to the possible collapse of AIG and the dire consequences of losing their hard-earned savings. What a loss it would have been
I am glad I kept cool and was not swayed by the noise in the market. Terminating my policies early would certainly have resulted in a huge surrender penalty. As all of my family's AIA plans are whole life policies, they are structured as long-term contracts. An early surrender would have meant losing a significant portion of my premiums and missing out on future annual and maturity bonuses. I would also have lost the critical illness protection.
</TD></TR></TBODY></TABLE>Earlier, news had broken that AIA's parent, American International Group (AIG), was on the brink of collapse and scrambling for financial aid. The future of AIG, and thus AIA, appeared bleak.
When I got to the AIA building at 11am, there were more than 100 people there. Most had rushed to AIA to surrender their policies.
About 40 were in line to get a queue number while the others, who had already got their numbers, were waiting to be served by AIA staff. As they had to wait two to three hours before being attended to, some left after taking their numbers, intending to return later.
The crowd was orderly but unhappy. Faces looked strained, anxious and worried. While some people were tight-lipped, others spoke in hushed tones. Some were on their cellphones, urging relatives and friends with policies to join them in the queue.
Strangers became friends as they exchanged notes on what policies they held and the predicament they were in.
What I found disturbing was that many of the customers did not bother to seek professional advice before surrendering their policies.
Many had rushed to AIA's offices because their friends or relatives alerted them to the possible collapse of AIG and the dire consequences of losing their hard-earned savings, which were embedded in policies, such as whole life and endowment, as cash values.
AIA was partly to be blamed for this.
These customers did not contact their agents for advice because the original agents who sold them the policies had left AIA and, somewhere along the line, little or no effort was made on the part of AIA and its agents to contact these 'orphaned' policyholders.
Standing in the crowd, I found myself being sucked into the atmosphere of fear, too.
After all, I am an AIA customer. My husband and I own eight AIA policies, all bought in the mid-1990s. We also have a car insurance plan with American Home Assurance, the non-life insurance subsidiary of AIG.
We used to have 10 AIA policies but I surrendered two last year after deciding that the returns were too low - partly because of the low sums assured - to justify holding them.
I decided to hold on to the others. Despite owning them for more than a decade, none of the policies has broken even and two have critical illness riders on them. We have already paid more than $100,000 in premiums for all eight.
Overwhelmed by the crowd's anxiety, I debated, for a moment, if I too should take a queue number. After all, I was going to spend the next couple of hours there observing the crowd for a story I had to file later.
But good sense prevailed. I called some financial experts, and after discussing with them, was convinced that since AIA's assets and life funds are in Singapore, they would be ring-fenced here and out of AIG's reach.
In the worst-case scenario, AIG may simply opt to sell its life subsidiaries in Asia.
After all, AIA, with its 2.8 million policies and more than one million customers, remains an attractive business proposition which I am sure its rivals would love to get their hands on.
And if that happens, my family's AIA policies would end up being managed by another insurer. Whichever happens, my cash values should be safe.
Among those in the crowd was AIA customer John Tan, who told me he was there because he wanted to 'cut loss'. Better to get some cash now than get possibly nothing if AIG were to collapse, he said.
I pointed out that he would lose all his insurance cover, including his critical illness protection, if he surrendered his four AIA policies since he was not insured elsewhere. He looked worried.
I came across AIA customers who could not figure out if their policies had broken even - that is, whether their cash values had exceeded the premiums they had paid so far.
I ended up helping them to navigate through their policies and highlighting the guaranteed and non-guaranteed portions of the illustrated cash values.
Back in the office later that day, I received e-mail and text messages from friends asking if they should surrender their policies.
My answer was: I have several AIA policies but I am not in the surrender queue.
I finally went to bed at 2.30am, convinced that the United States government would not leave AIG in the lurch. Sure enough, a few hours later, the US announced its bailout plan for AIG to the tune of US$85 billion (S$123 billion).
Over the next few days, AIA issued statements and took out full-page advertisements in newspapers reiterating that it has sufficient capital to meet all policyholders' obligations.
By the end of that week, more than 20 customers had reinstated their policies. At last count, a few thousand AIA policies have been surrendered.
I am glad I kept cool and was not swayed by the noise in the market. Terminating my policies early would certainly have resulted in a huge surrender penalty.
As all my family's AIA plans are whole life policies, they are structured as long-term contracts. An early surrender would have meant losing a significant portion of my premiums and missing out on future annual and maturity bonuses. I would also have lost the critical illness protection.
When it comes to financial investments, customers should never make hasty decisions, be it buying or selling them.
Of course it is easier said than done. Even someone like me, who has been covering financial matters for eight years, almost lost my cool too.
=> In other words, the 154th only know how to talk cock and perform ant ass for the Familee. They dun really believe in what they write themselves. *shake head*[email protected]
