Saturday, July 24, 2010

AXA FutureProtector High Lapse Rate

It was reported in the Straits Times today that AXA, an insurance company, is trying to claw back $7 million from local financial advisory firm Finexis.

Last year, Finexis had a promotion where they were giving away free 1 year term insurance to its customers and potential customers. This free 1 year term insurance was AXA's FutureProtector policy. Most probably unknown to AXA, Finexis gave away all these insurance policies without asking customers to pay a single cent.

This was my personal experience:

Financial Planner from Finexis: "I got free insurance to give you. Just sign it here and after 1 year cancel it. Free, why not just take it. $200K coverage."

Me: "Okay lor"

I readily signed up for the free insurance from Finexis with the mindset to cancel the policy after 1 year. Afterall, that was what I was told to do. In fact, just this year, the agent sent me a giro cancellation form so that I could cancel off the policy as agreed upon. But I had no use for the form as I had already informed the bank beforehand to cancel off the giro agreement at the start of the year.

So now we know the repercussions of giving away free insurance. I am pretty certain that many of those who took up the free insurance just lapsed their policies as they saw no need for that protection at all in the first place. The only reason they took it up was because it was given totally free of charge without them having to purchase any other policy at all. We Singaporeans love free stuff =)

6 comments:

  1. Finexis is a disgrace and shame of the financial advisory industry. Their young and naive "adviser" (more correct to call them product salesman) are just doing high pressure product peddling, no advising, and now I heard poor servicing, because too busy to chase after new sales. Finexis recruit these young and gullible people because they are easy to control and brainwash.

    This incident showed that Finexis not only do not act in the interest of their clients, by selling them costly insurance using gimmicky sales tactics, but at the same time won't hesitate to screw their business partner (AXA Life), as long as they can make money for themselves!

    MAS MUST TAKE ACTION ON SUCH COMPANY. IT'S BECAUSE OF SUCH COMPANY THAT CONSUMER ARE GENERALLY SKEPTICAL OF OTHER PROFESSIONAL FINANCIAL ADVISER, AND AS A RESULT "AVOIDING" REALLY GOOD ADVICE. SUCH BLACK HORSE MUST BE ERADICATED!

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  2. looks like a free promo that had gone too big and out of hand. big wake up call to put more check and balance in place, not only to finexis, but also to the rest of the financial industry.

    Rather than adding insult to the injury, one shld reflect back on himself. A promo is good to bring in customers & expand your market. Even though with purest intent, when it had gone too big & successful, there would be many people envying with green eyes, waiting for this promo to fail. Casualites? Not the customers, but the consultants. Imagine the livelihoods that are affected.

    Praying for god's grace. Let this be a lesson to everyone.

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  3. The whole episod lies in the fault of AXA commission payment and greedy advisor from finexis. Many of them simply asked the clients to sign up with the intend of lapsing after the 1st year. Some even go the extend of paying for their clients 1st. They just needed their 'client's' signature and details... for their sales only

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  4. anonymous 1, you are such a joker~ Did you work at finexis before or working at similar sector, if not why are you so agitated? And what makes you have so much assumption about their advisers and company?? Relax ok, too agitated will high blood pressure.

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  5. Hi FF,

    I don't understand why Finexis has to give back 7 mil to AXA...do you know why? I had it too, but had cancelled it one yr after the free period is up.

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  6. Hi all,

    Thanks for the comments. I think AXA just feels that they might have gotten a bad deal with the way the products were marketed.

    LP,
    I think the reason is because of bonuses. If I am not wrong, a lot of Finexis agents like to sell AXA products. By "selling" away or should I say giving away this free 1 year term insurance, it must have counted in some way or another to their sales quota and given them a higher bonus or something from AXA. So perhaps it was an artificial way of boosting their sales results when it would actually have been dramatically less. Perhaps u can ask ur gf since she is in the line =)

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