For a long time, I have been planning to write this article because of its importance to the general Filipino public but I did not have time to sit down and write. Lately, I have been receiving a lot of questions from people on how they could cancel their life insurance policy which they got from an insurance company who hire salespeople to perform aggressive and “deceptive” selling and marketing strategies in malls (Starmall, SM North, SM Fairview to name a few). I don’t want to mention these life insurance companies because I don’t want to be called biased as I work in an insurance company myself. There are at least three life insurance companies that I know of that do this aggressive type of insurance selling inside malls. There have been many blogs and facebook pages created voicing the anger of customers who felt they have been scammed because of the way the life insurance agents sold the products.
The three life insurance companies rent space or unit inside malls so they can legitimately offer their products to people. They hire salespeople (girls and gays most of the time) to randomly ask people to join a special promo for free or get freebies (examples: win a trip abroad; win a car; win cash prizes, get free insurance, etc). The salespeople say all you have to do is to go to their office and fill up some forms to be eligible to the promos. The office is also located inside the mall where “highly” persuasive smiling agents are ready to welcome you. The agents will offer you refreshments to make you feel welcome and important. They even congratulate you without any reason at all. It is just like they are congratulating you in advance because you are going to get something very important to your life. In order to sell insurance plans, these agents resort to deceptive selling techniques that I really frown of. I do believe that there is ethical and professional way of selling insurance to the public.
ATM and Credit Card Deception
The agents will even ask your debit/ATM or credit card. If you ask why, they say that they want to check your eligibility for the promo. That is a red flag already. I think the real reason why they ask you to swipe your debit or credit card is to check your ATM Balance and your credit card limit. This way, they know how much money you have in order to provide the product that suits your budget. If you happen to have high ATM balance or high credit card limit, they will offer you big plans. I read customer complaints that their atm or credit cards have been charged with 4K, 20K or 60K pesos. If your debit card has very small balance or your credit card has very small limit or maxed out, they will “let” you go and just let you fill out the promo forms. If you don’t have money, they don’t waste their saliva. I believe that every Filipino deserves free financial advise from financial/insurance advisers irregardless of income level. As a financial advisor, I speak to minimum wage earners, janitors, farmers, drivers, contractual workers, government employees, etc.
The reason why the salespeople ask you whether you have atm or credit card is to learn your capacity to pay within that day because their objective is to close the sale within the day. They really don’t expect people to return back after few days of decision making and go on with the plan. They don’t accept answers like “pag-iisipan ko muna,” “kakausapin ko muna asawa/parents ko,” “hindi ako interisado,” etc etc. I read some complaints online that they were not released inside the room unless you get a plan even the smallest plan. The agents try all their best to let you decide within those moments on their favor and let your debit or credit card swiped. There have been instances that the customers complain that they don’t know that their cards have been deducted already. They just realized it few hours or days after the transaction happened. Because of the unauthorized deduction of atm or credit cards, customers began to distrust not only the agents but the insurance company as well. There are customers who use the internet and social media to voice out their bad experience with the agents. Because of this, many customers begin to think that they have been scammed as well even though they liked or understood the product they got. These customers are worried about their money so they just ask for cancellation and refund.
The products and the life insurance companies are legitimate. There is no doubt with that. The companies are authorized by the Insurance Commission to sell life insurance policies to the public. The products were also approved by the Insurance Commission. By the way, the Insurance Commission is the government agency that regulate the business of insurance in the Philippines. The agency has the power to revoke the license of insurance companies and agents if they violate government laws including the Insurance Code of the Philippines.
What is really wrong is the deceptive way life insurance agents sell and market their products inside shopping malls. They don’t explain the products very well to the customers. They misrepresent the benefits of the plan. They don’t divulge important aspects of the insurance policy like insurance fees and cost that will be deducted every time you pay your premium. They don’t tell you about the refund policy including the policy that you may not get all the money you paid even after few years of paying. Take note that the a life insurance policy is not the same as bank savings account. Not all the money you pay will be saved for your future use; there are fees and charges to be collected. There are plans that don’t accumulate savings until your 3rd year of paying the plan. Meaning, your plan will begin to accumulate cash values only after 2 years. Your first 2 years of your payment will be used to pay the commission of the agents who sold the product to you and other administrative and insurance charges.
Why there are charges involved in getting a life insurance policy? Why they cannot just give all the money back easily? Remember, a life insurance company is like any other company that needs money to operate. They have agents and employees, they have bills to pay and most importantly they have obligations to pay. These obligations include paying the beneficiaries of dead policy holders, paying the endowment benefits of existing customers and providing policy loans to existing clients. Life insurance products are not scam. They provide death and living benefits. Death benefits include providing your beneficiaries lump sum amount (example 1 Million) when you die. Living benefits include getting dividends from the company and the ability to loan against your accumulated cash value. Life insurance products can also provide decent amount of retirement money like the Sun Maxilink Prime plan I got from Sun Life. This Sun Maxilink Prime will give me about 8 Million pesos at age 60 by just paying affordable premium for 10 years. SSS or GSIS cannot provide that amount so I am happy with this plan. I was not forced to get this plan at all. I got this plan because of its insurance, disability and retirement benefits. I was given enough time to think whether this plan is for me or not. I studied the plan thoroughly before I paid the initial premium. There are plans that pay lump sum amount (example 500K-1 Million) in case of critical illness diagnosis (such as cancer, stroke, organ transplant, paralysis, blindness, deafness, hear attack, etc). Example of these plans is the Sun Life Assure and the Sun Flexilink plan.
Why the Insurance Companies are not Disciplining the Agents
I really believe that the management of insurance companies involved know the unscrupulous activities that their agents do in the field. They are earning from it, that is why they are deaf and blind on customer complaints. Many people don’t ask for a refund and just let their insurance contracts lapse. Many think it is hassle to complain and ask for a refund; they just set it as painful and expensive lesson. Many complainants are set to believe by agents and company representatives that it is difficult to refund and you may need to hire a lawyer. (WTH, who will hire a lawyer for a 20K refund? – the attorney’s fee is even more expensive). Many just forego the money spent and just ask the company to cancel any further deduction to their debit and credit cards. I feel sad for the complainants. I hope they will be enlightened with their rights.
How To Cancel Your Life Insurance Policy
You have the right to cancel your life insurance policy within 15 days from the day you signed up for the plan. This is called Cooling off Period. Within this period, you can cancel your plan and ask for full refund. Variable life plans or life insurance plans linked with investment funds are guaranteed to have this cooling off period (see http://www.insurance.gov.ph/htm/..%5C_@dmin%5Cupload%5Cservices%5CGuidelines%20on%20Variable%20Life%20Insurance%20Contracts.pdff) Unfortunately, traditional plans which are the usual plans sold by agents inside malls may not have this cooling off period. Traditional plans are plans with life insurance benefits and cash savings or cash values. However, even if you bought a traditional plan, you may still ask for a refund if you can prove that unethical and deceptive practices has been used by agents to sell you their products. The refund request or complaint must be filed immediately after you have been sold the life insurance plan. Filing complaint few months after the sale may make it very difficult to ask for a refund.
An important step in the cancellation process is to write a cancellation letter. Make 2 copies (0ne for you, one for the company) of the cancellation letter. Don’t forget to put the date in the letter and affix your name and signature. Important things to put in the cancellation letter is your reason(s) why you want to cancel the plan, the location of the branch/office where you got the plan (ex. SM Megamall, SM North), the date when you got the plan, the amount deducted from your credit/debit card. Also include in the letter that you are demanding full refund in accordance with the 15 days free look up period or cooling off period of the Insurance Commission.
Submit the cancellation letter preferably in the head office of the company (Google the head office address). You may also submit the cancellation letter to the branch where you met the agents but according to what I read from complainants, they got better treatment in the head office. Don’t forget to submit copies of the documents the agents gave you as proof of purchase/transaction (photocopy them in case the company get the original). Let the receiver of the cancellation letter sign both copies of the cancellation letter with date. Take note of the name and designation of the receiver of the cancellation letter. This is to prevent the company from saying that they did not receive your cancellation letter because you have evidence. Submit photocopy of your valid ID too. The employees may persuade you to continue the plan or tell you that you cannot refund anything. Do not believe them, state the Insurance Commission’s policy regarding the free look up period or the cooling off period. If they don’t know this policy, you are allowed to get angry because of their ignorance.
Submitting cancellation letter is the best option for complainants whose ATM cards have been deducted and those who paid cash. Calling your bank to reverse the deduction may not be allowed by the bank itself.The bank will tell you to talk to the merchant (the insurance company) directly for the reversal. I know it’s a hassle!
For those who paid via credit card, you may file a dispute immediately to the credit card company because of unauthorized transaction by the agents. Depending on the feedback of the credit card company, you may be successful in getting a reversal but if not, the best option is to submit a cancellation letter to the insurance company within 15 days. It may take time for the credit card company to investigate your dispute. It may take longer than 15 days so the best option is still to file a cancellation letter. You may do both: submitting a cancellation letter and filing a dispute by calling your credit card company. I heard that agents swipe the full amount to your credit card, even though they said that the plan is in monthly or quarterly mode. If you cannot pay the whole amount in your next due date, you will be charged with finance interest or penalties. I know it sucks! Just pray that the refund/reversal will be done immediately. It helps to follow up every few days, again it sucks!
There is a hope for full refund. I read that many complainants are able to refund their full payment by following the steps I mentioned to you.
You Deserve Better
Life insurance product is a very important financial tool but it should be sold in a way that is both professional and ethical. There should be no deception and marketing gimmicks. Life insurance is important to Filipino families. Bread winners need it to provide comfortable life to their dependents when the good Lord call them early. Life insurance can also be used for retirement needs and educational funding needs. Life insurance has many uses now as it answers different needs like income protection, estate tax planning, retirement planning, college funding, critical illness funding, business insurance, and many more. You don’t deserve agents selling insurance plans deceptively inside shopping malls, you deserve professional and licensed insurance advisers to help you with your insurance needs. You should be informed of your rights as policy holders.
You can get the assistance of the Insurance Commission by filing a formal complaint. Follow the instructions here: http://philippinesinsurance.blogspot.com/2011/05/how-to-file-your-complaint-with.html . You can email your complaint to email@example.com and firstname.lastname@example.org.
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