Portfolio Withdrawal Condition - Why You Need Not Worry

Recently, I got a few queries regarding Portfolio Withdrawal Condition (PWC) term in AIA policies from potential clients. I know for sure this must be from agents of other companies trying to confuse the prospects because I received the same remarks when I decided to sign up with AIA. What this term means is basically the insurance or takaful company has the right to withdraw the policy you've taken if they decide not to further underwrite the product. Technically it does sound scary. Yes...

AIA and AIA Public Takaful earlier policies do have such clause. Here are a few reasons why I still decided to sign up with AIA despite existence of those terms:

1. Should this be a main consideration to a prospective client? Well, consider this... during the subprime crisis, even the biggest of banks collapsed. So does it matter whether this clause exists or not? When a company collapse, the company will not be able to pay its liabilities. Even if they don't have such clauses, it still does not have the ability to pay no matter what. Considerations shall be given to the financial strength of the insurance/takaful company. Your main consideration should be whether the company would be able to pay your claims or not.
2. The insurance/takaful industry is regulated by Bank Negara Malaysia (BNM). Even a product brochure needs approval from BNM. Do you think an important decision such as withdrawing a policy would not come under great scrutiny from the authorities? Think again.
3. We live in a digital age. Imagine a few thousand policy holders voicing their frustrations on facebook because their policy cease to exist. Imagine the damage done to the company's credibility. Do you think it's a wise move for the insurance company to do that?
4. Since 2014, ING has merged with AIA. What happened to those ING policies? They are still being honoured and in force.

All these reasoning are common sense. It's something that you should not be worried about too much. What's more important is whether the plans offered suit your needs and whether claims are paid.

For those who finishes reading this post, I have a greater news. Since 1st December 2015, the PWC term has been removed from AIA policies. If there are still people telling you the same old story, then you should run very very very fast away from that person.