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What You Should Do when Buying Resale Savings Plan

Updated: Jul 20


What You Should Do when Buying Resale Savings Plan
Figure 1: What You Should Do when Buying Resale Savings Plan (News headline source: CNA)

On 28 May 2021, CNA released a news about a victim who was cheated SGD24,900 by her insurance agent, for a fake savings plan. Source: https://www.channelnewsasia.com/news/singapore/insurance-agent-cheat-primary-school-friend-policy-14904466


We are deeply saddened by the news. No one should have his/her trust betrayed by his/her insurance agent. Fortunately the insurance company compensated the victim for her losses.


Some of you may be wondering what "Absolute Assignment" is. It means transferring of rights from one person (assignor) to another (assignee). Only the owner of the savings plan at that point in time can be the assignor. Once the rights have been transferred, the assignee shall be the new owner, new premium payer and new beneficiary of the savings plan. The life assured of the savings plan remains unchanged. You may refer to the following page for details: https://www.prudential.com.sg/services/claims/nominations/assignment-of-policy


We would like to take this opportunity to share the following tips on what you should do when buying a resale savings plan:


If your insurance agent introduced you a savings plan that is available for buy-over via "Absolute Assignment"

In this case, it is likely that the insurance agent is already looking for a buyer on the current owner's behalf. Ask your insurance agent to show you a copy of the savings plan's revised policy illustration, which can be obtained from the current owner, It is also known as:

  • Revised benefit illustration

  • Post sales policy illustration

  • Post sales illustration

  • Post sales quotation

  • Illustration generated AFTER the policy is incepted

If the revised policy illustration is not available (for those incepted less than 3 years ago, or those whose insurance company does not generate such), a pre-sale policy illustration would suffice.


This policy illustration is a good indication that the savings plan exists with ownership.


Revised Policy Illustration
Figure 2: Revised Policy Illustration

If you saw a savings plan that has been put up for resale by a resale broker, and it is available for buy-over via "Absolute Assignment"

The revised policy illustration should be available on their website for your viewing. If it is not available, ask the resale broker to show you a copy of it BEFORE you even decide on buying. Also, get their UEN (Unique Entity Number) and do an entity check on ACRA that their company status is "LIVE COMPANY".


ACRA Search Results
Figure 3: ACRA Search Results

Make arrangements with the assignor (current owner) of the savings plan to meetup at the insurance company's customer service centre.

Some insurance companies require you to book an appointment in advance, as they do not allow walk-ins. Please check with the insurance company if booking an appointment is required before making arrangements with the assignor. Also, ensure that both you and the assignor bring your respective identity card, which is required for "Absolute Assignment".


When both you and the assignor are at the customer service centre:

  • The customer service is able to verify that the savings plan exists and is under the assignor's ownership, and

  • Both you and assignor can fill up the forms required for "Absolute Assignment", and submit them on the spot.

From our past experience, it takes between 2 to 10 working days for the "Absolute Assignment" to be processed on their back-end. You will receive a confirmation letter via mail from the insurance company once it has been processed.


Absolute Assignment Confirmation Letter from Etiqa
Figure 4: Confirmation Letter from Etiqa

For most insurance companies, they even have login web page for you to open a free online account and login to view the savings plans you own. For added assurance, you may do so to see that the savings plan is under your ownership.


When making payment for buy-over

If it is the case of insurance agent's introducing. DO NOT transfer any funds to the insurance agent's bank account, as the agent is NOT the assignor. Instead, transfer funds to the assignor's bank account. The least error-prone way is to do so via PayNow with the assignor's mobile number as the identifier.


If you are making payment to a resale broker. Ensure that the broker sends you an invoice with payment instructions before making payment. The least error-prone way is to do so via PayNow with the assignor's UEN as the identifier.


Conclusion

We hope the tips we shared have helped you understand the process on buying a resale savings plan, and minimise your chances of ending up with a fake one like the one in the news.


For enquiries, feel free to contact us via WhatsApp, Telegram or Facebook.


Take care, and stay safe.

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