By Jaime Ee Wen Wei

Mr S.H. Wong imagined the worst when news broke last Monday of insurance giant American International Group's woes.

Worried that the company would fold and he would lose his life savings, he rushed to the office of AIA Singapore in Finlayson Green on Wednesday.

He has a $30,000 life policy and a $10,000 21-year endowment plan with the company, an AIG subsidiary. He joined hundreds of jittery policyholders in the queue to terminate his policies.

But just two days later, Mr Wong, 35, who is unemployed, was back at AIA Tower, this time to reinstate his policies.

The US Federal Reserve's announcement of an emergency loan to AIG on Wednesday had changed his mind. 'From what I've read so far, it appears that the financial situation has calmed down, so I decided to reinstate my policies. I would have lost about $7,000 by terminating them,' he said.

Like him, thousands of AIA policyholders had a harrowing week. Thinking of cutting their losses, many made the agonising decision to terminate their policies. More than 2,000 policies have been terminated. There are 2.6 million AIA policies here.

Businesswoman Sharon Lee, 49, surrendered her investment-linked policy on Friday. The decision cost her $4,000. 'They advised me to transfer my money to other investment funds but I didn't want to do that. I don't trust the company anymore,' she said.

Money losses aside, policy holders said that the queues and repeated trips to AIA Tower, plus the hours spent mulling over news stories and figures, had drained them physically and mentally.

Delivery man P.C. Tan, 54, took three days of leave to settle the paperwork. He gave up his 15-year endowment plan worth $20,000. It would have matured in two years.

'I bought this when my children were still young and needed protection. But they have grown up now and are working; there's no point keeping it.'

But he is keeping his $30,000 life insurance plan with the company. His wife, who has five AIA policies worth about $60,000, is still trying to decide what to do.

While some have made a U-turn - more than 20 customers had reinstated their policies by last Friday - seven customers who surrendered their policies said they had no plans to do so.

Storekeeper Lee Siow Teck, 51, who terminated his AIA life insurance plan after 17 years, said: 'I have insurance policies with other companies. I won't buy from AIA anymore.'

This article was first published in The Straits Times on September 21, 2008.