How do related laws regulate unapplied premiums in insurance?
An individual located in Indonesia asked his agent to set the insurance small. It is highly plausible that the insurance agent will maximize the commission fee and set the premi to be very high while the insurance benefit is very limited. Moreover, the agent didn’t mention the acquisition cost, arguing that all the money is investment. It turned out that around $4k are spent for insurance benefits which worth only $40.
Other agents representing other companies stated that the agent must have picked a flexible product, and then set up a huge unapplied premium. Basically, the agent managed to set the benefit low.
The agent's justification for saying that all money is invested is based on the idea that unit link itself as a whole is considered as investment. That is even though first year premi are all spent on the acquisition fee. The customer was unaware of that and missed that part when reading the contract.
I want to learn how the related laws are in various countries, especially in Indonesia.