I often receive in my email inbox of insurers and fund managers giving free gifts, vouchers, plane ticket and even cash to entice customers to buy their products. This becomes so serious that CPF board has to put a stop to this. However, sometime the "free" stuff is not obvious and seemingly harmless. This is to me dangerious because it can destroy a person without even anyone realising it. How can this happen?
Take for example Aviva Myshield plan. With effect from 1 Oct 2007, both parents who cover themselves under Plan 1 or 2 will not need to pay premium for their children if their children are covered under Plan 2. This free coverage is until age 20. Sounds good? This is a classic case that if it is not careful, the family will be financially ruin. Take for an instance of a parents who covers themselves Plan 1. If they want to have their children get free coverage, their children must be covered under Plan 2. What this really mean? It means that while the parents are entitled to stay in private hospital, the parents are putting their children in the goverment hospital. Now, I am a parent and I see no logic to this because if I as a parent feels that it is good for me to stay in private hospital, why should my children enjoy anything less then me? Does it mean that they are a lesser human being then me? Or does that mean that I love them less then me? As a parent, I would ensure that they get the same kind of hospitalization benefit as me! What will happen if an illness happens when they are in Plan 2? It is extremely problematic to upgrade them to Plan 1 to get better coverage due to the problems of pre-existing conditions.
Recently Aviva Myshield revised their terms and conditions which is applicable for all new customers and existing customers. But strangely, many existing customers call me to ask me about how to maximize their money by getting the free coverage for their children. NONE asked me about the merit of the new enhancement and whether is the new enhancement beneficial or deterimental to existing and new customers. When I first heard about Aviva's launch of this new Myshield, I immediately had a long list of questions in my mind all of which are related to the benefits for existing and new customers. The last thing in my mind was the free coverage. [Of course I know all the answers now and if anyone wants me to provide them with a financial advice on this subject has to pay me for a consultation! That's what I do for a living right?]
My general advice to all people is this, a financial product should be purchased based on its own merits and should never be influenced by free gifts, discount or free vaccuum cleaner. You could end up buying that vacuum cleaner and nothing else.
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