August 12, 2023
Part 3: Cash Out
After nearly 4 months, the process had been completed. It all began in late April while learning from financial experts and doing my own research. I came to the conclusion that cash value whole life insurance policy is a mammoth scam. Shockingly, I broke even! Statistically, 90% of whole life policies are cashed out at a loss, so this was a nice turnaround to be sure. Even so, the real loss is the lost opportunity of not having a half million in the bank as I should have by now.
The payout of about $150k got deposited into my Hong Kong bank account during the Thai biking trip. At the time I didn't want to mention anything about it for whatever reasons. But now, I'm in Hong Kong and effectively a Hong Kong millionaire. The total in the bank now makes me eligible for HSBC Premier status.
This part of the trip would be applying for such status. I was hoping to have pulled this off on the first Hong Kong run in late June, but that didn't quite work out. But now it could. So I went to the bank to update my information with my wife helping out. The person running the information counter did a quick check: I'm just a regular customer. Ok then, so that meant a 90 minute wait. While waiting, I also tried to activate premier status on the phone but they said a branch visit was necessary. Alright, so the trip and the wait was then worth it.
Finally it was our turn. The clerk was all smiles and friendly and confirmed that yes I could upgrade to Premier status. That meant a package of new ATM cards and credit cards was on the way. Then he introduced me to a personal relationship manager and said those three magic words I had been waiting to hear all trip: Let's go upstairs.
At this point, I only wanted to park my money for a few months and earn decent interest while figuring out my next moves. After all, you need a cooling off period from a whole life insurance scam that lasted for nearly 15 years. It's even worse than abusive ex-wife. So what did my personal relationship manager then do? He offered to sell me more insurance.
In actual fact it took awhile to figure out that's what he was doing. First I didn't understand anything he was talking about while he rambled on and on. From what I knew, if they can't teach you stuff then they must be salespeople. So my gut told me this was a scam. As well, I had learned so much from my Thai trip that just because you're not falling for the scams on Khaosan Road doesn't mean you can't be a victim in other unexpected places. Such as this premier lounge.
It's natural to get caught off guard. After all, you rock up there and think you've arrived at some bank nirvana. You think you're one of the select few elites who gets a personal relationship manager. It would be the last place in the world to get scammed, you think. But after listening to his sales pitch it became clear that he was selling insurance as an investment because that was the fastest and easiest way for him to make a buck.
After he finished his ramble, I asked him "Is this whole life insurance?" He didn't answer.
I then continued and said, "I'm not interested in this scheme. I sold an insurance policy like this one earlier and don't want any more, thanks anyway."
His argument was that I needed to keep the money in Hong Kong to retain premier status and that, as a foreigner, my investment options were limited. This was starting to sound just like what the expat financial planner said who hooked me up with insurance back in Shanghai. He had a few more points along these lines but I wasn't buying it. In fact, on future trips I would be able to disprove him.
After all, the guy I first saw downstairs said that if you open an HSBC Premier account in Hong Kong, then you are a premier member at any other accounts you open in the world. That includes the possibility of going back to Bangkok on a future trip and opening such an account there. It can link to the other account I just opened, thus creating a way to get money out of Thailand.
But this "relationship manager" kept on trying to peddle his insurance. I told him no once more, and said why don't we go with the other option: fixed term deposit with 3.5% for 3 months. Since I'm basically clueless with investments at this point, it was the easiest way to start rather than letting the money just sit there.
His tone abruptly changed and he simply barked, "How much?" when he saw that's what I wanted. I told him the amount, he printed off a piece of paper, and that was that.
I guess you can't really blame these guys, they're selling the easiest product for them to make a buck. Nothing has changed in decades and nothing will change in the future either. It's buyer beware. To quote Dave Ramsey, whole life insurance is the payday lender of the middle class.
As one of my good friends told me back in Shanghai, this is not a massive windfall, this is a chance for a do-over and to make wiser and smarter investments.
The same principle can be said about the Thai condo, it was sold to me by scammers calling themselves "agents" and recommended by questionable people who sold me whole life insurance. The whole thing is ridiculous.
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