From:   To:  
  Unethical Behaviour of Insurance Agents


Insurance Agent Flees After Taking Commission
Villagers persuaded into signing up insurance policy which does not provide protection
  • A mother decided to purchase an insurance policy for her daughter for protection,hence the daughter, Ms. Choo used her hard-earned savings from years of working in Singapore to pay for it. According to her, the insurance agent will pay her mother a visit almost every night, even on Sundays and public holidays, to talk about the benefits of insurance. Her mother finally gave in to the  agent and signed up.
  • The insurance agent continuously persuading Ms. Choo’s mother to purchase an insurance savings plan where she only needs to pay premium for the first 10 years.On the 11th year onwards, she can stop paying and will receive interest on monthly basis. In addition, she gets to go for an overseas trip. She will also get back her capital plus interest when she attains age 55. The agent also stressed that the life insurance policies will cover all types of illnesses and medical charges will be taken care of by the insurance company. As the agent is very familiar with the family background, she then designed a few insurance plans for them.
  • Ms. Choo’s mother eventually signed up for the plans arranged by the insurance agent as she was illiterate in English. Not only that, the insurance agent used various tactics to persuade her mother to increase protection and eventually signed up 8 insurance plans for the whole family of four! Ms. Choo was not aware of the details of the insurance plans. Also as the premium was only about RM67 per month, it did not bother her much and she continued to pay for 9 years.
  • Ms. Choo said that apart from them, there were many others in the same village who have purchased similar plans from this agent. Then one year, one of the policy owners had an accident and lost both his hands. He had bought 3 insurance policies
    yet couldn’t claim a single cent. The agent then told him that the policies that he bought is actually a savings protection plan and does not cover accidental claims unless the insured completely lost both hands or legs and if there is an injury to the eye, claims will only be paid if vision is totally lost in both eyes.
  • Stunned and anguish, he decided to take legal action for justice, which he unfortunately lost the suit. The agent was cursed by the villagers after the incident and eventually disappeared. With the agent gone, who is going to continue servicing the policy holders? In any case an accident happens, who is going to fight for their claims?
  • The villagers then engaged a professional to review the details of the insurance plans that they have bought. They found out that the policies do not provide any coverage, so much so that even in the event of accident they get nothing in return. Finally, the whole family decided to terminate the policies. Ms. Choo paid in total RM7236 of premium for the past 9 years and only obtained less than RM3000 upon termination.
  • However, she is thankful that her family didn’t come across any unfortunate incident so far. She felt sorry for other policy holders who did not realise the type of policies that they have bought. The unscrupulous agents will come up with various excuses or even flee when policy holders had an accident.
  • Having terminated the policies in 2006, Ms. Choo did not buy anymore insurance product. Until now, she feels that insurance are all cheats.


Code of Conduct an Insurance Agent Should Possess

Having read the series of cases above, let’s one lament for the innocent victims. A lot of people tend to sign up for insurance policy without first understanding the details and content of the policy coverage thus allowing unscrupulous agents to take advantage on them. As more cases of policyholders got cheated appear, public’s view on the integrity of insurance industry is diminishing and  building stronger apprehension against insurance agents. If insurance companies do not take steps to weed out the bad agents, this will tarnished the image of insurance agents.

A professional insurance agent should educate the customers, getting them to understand the details of insurance coverage and not just blindly pushing the product to customers. Peter, an insurance agent for the past 15 years observed that many Malaysians, after signing up for the insurance, will chuck their insurance policy contract aside ignoring to study the finer details in the document, and being ignorant to the policy coverage that they have bought.

Most insurance agents will approach close friends or relatives and many will purchase the policy out of camaraderie or as a favour thinking that the chances of getting cheated is highly unlikely since they are familiar with the agent. Unfortunately, human is unpredictable. Even if we are familiar with the agent, it does not necessarily mean that we will get the right protection or coverage from the insurance policy.


Source: Sin Chew Daily (4 April 2011)
Translated by insuranceinfo
  Back to Announcements