What You Should Do when Buying Resale Savings Plan
Updated: Jul 20
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.
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".
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.
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.
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.
Take care, and stay safe.