I REFER to Mr Tan Kin Lian's reply on Tuesday ('Hidden charges in insurance policies') to my letter ('Investment-linked products beneficial in the long term', Oct 5).

The current premium allocation on my policy is 108 per cent for the $1,200 premium paid annually; $1,296 is used to buy units at offer price. This is reflected in the semi-annual statements I receive from my insurer listing all the charges and fees incurred, which concur with the listed charges and fees in the policy contract.

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There were no additional charges levied on the premiums invested, as far as can be seen from the statements. I have been tracking the fund prices since 2004, and I can easily trace the prices to the point when charges were deducted.

I have term insurance policies, but they do not have cash values and most do not provide coverage beyond age 75. Some of their premiums have increased over the years to the point of being inequitable.

Like any insurance policy, investment-linked products are part of my long-term financial solutions to meet my future needs.

In his reply, Mr Tan raised issues that refer to an insurance agent's ethics - or absence thereof - during the sales process. But it is also about the buyer's duty to exercise due diligence over the products he aims to buy. How can an insurer deduct 'hidden charges' on the sly and hope to get away with it without being found out subsequently? If so, then the audit system put in place by the Government for all insurers would have failed.

If the practice of hidden charges was indeed prevalent, would not Mr Tan, as a former chief executive officer of NTUC Income, have been privy to such information and would have had the chance to blow the whistle?

Su Kim Teck

This article was first published in The Straits Times.