These case studies have been modified so as not to identify any actual cases at FIDReC. They are provided for purposes of learning and are not necessarily indicative of outcomes at FIDReC.


Mr Ong was 42 years old, self-employed, and proficient in English. One day, he met up with his Relationship Manager (RM) to discuss growing his retirement funds. After many discussions with his RM, Mr Ong took up an endowment policy. He also took up a premium financing loan. This meant that he would take a bank loan to fund the insurance premium. Mr Ong expected that the earnings from the policy would be enough to fund the instalment payments for the bank loan.

Some months later, due to rising interest rates, Mr Ong started receiving payment notices for the loan instalments. Surprised, he lodged a complaint to the Bank. He alleged that the insurance policy was unsuitable for him. Also, he stated that the terms of the bank loan were not clearly explained to him.

During the mediation, the Bank explained to Mr Ong that the policy was recommended after a Financial Needs Analysis. The Financial Needs Analysis documented his investment experience, risk profile, financial goals, and financial situation.

The Bank’s investigation found that the product recommendation was in line with Mr Ong’s profile and goals. The Bank also interviewed the RM, who confirmed that he had explained the product and the loan to Mr Ong. Mr Ong had signed all the documents, including the loan documents and a separate GIRO form for the payment of the loan instalments.
Mr Ong insisted that the Bank should allow him to cancel the insurance policy and the premium financing loan without any penalty. He also wanted a refund of the amounts he had paid. He decided to refer the dispute for adjudication.

The Adjudicator considered the arguments and evidence presented by both parties. This included the oral testimony of Mr Ong and the RM. She found that recommending the endowment policy to Mr Ong was reasonable. The recommendation followed the information Mr Ong provided in the Financial Needs Analysis. She also believed the oral testimony of the RM. This was because the testimony was consistent with the signed documents and the markings made on those documents. The Adjudicator concluded that the RM had explained the insurance policy and bank loan to Mr Ong. This included their features and risks. The Adjudicator dismissed the claim.


Key Learning Points

  • Endowment policies are a type of life insurance policy. They provide insurance protection and investment returns for a specified time. A small part of your payments will go to the insurance coverage. The rest is subject to investment risk.
  • Premium financing is usually offered when the insurance premiums are large. However, it may not be suitable for everyone. A premium financing loan is a long-term commitment and interest rates are not fixed. When interest rates go up, you may have to pay more in monthly instalments.
  • When purchasing financial products, ensure that you read and understand any document before you sign. You can always ask a trusted person to help explain the document to you. Always seek clarification before deciding.
  • You should also compare first before deciding which life insurance product to buy. You can refer to compareFIRST, an information portal on life insurance products.
  • There is usually a free-look period of 14 days for you to review buying an insurance policy. Should you change your mind, please notify the financial institution within 14 days.
  • The outcome may have turned out different for Mr Ong if the endowment policy was recommended to him without a reasonable basis. For example, if the financial product did not meet the stated investment objectives. In such cases, FIDReC may be able to assist the parties to come to a mediated settlement.


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