Tan Kin Lian's Blog: Life Insurance for College Students

Saturday, May 05, 2007

Life Insurance for College Students

I found this story in a book entitled "Insurance Principles and Practices".

Riddle: What group of intelligent people often buy a product they don't need from salesmen using high pressure tactics to convince them that they should borrow money to pay for?

The answer: Collegue students. The product: life insurance.

The author made the following general statements, but also recognised that there were exceptions.

Billions of dollars worth of life insurance are purchased each year by students who would be better off buying other policies or none at all.

Three problems are involved:

* question of need
* sales method
* nature of the policy.

Most college students don't need life insurance. The death of a young person with no dependents create relatively little hardship for anyone.

Many agents who sell insurance on campus lack professionalism. The use of high pressure or fear tactics is the rule. It created a bad impression of students about life insurance.

They sell products that do not meet the student's real needs.

Conclusion: The book was written 20 years ago. I do not know if the problem still exist today?

4 comments:

Anonymous said...: You fail to recognise that students will earn future potential income which their parents might need to rely on. This is especially so for the not so well off where the students have to take a study loan from the bank or borrow from their parent's CPF. Besides insurance, how else will the loan be paid off should anything happen to the student? If the student is an only child, who will support his/her parents?; May 05, 2007 8:41 PM
Anonymous said...: I totally agree with the above person. A parent would have spent quite an amount to bring up the child to youth age. If anything will to happen unexpectedly, who will the parent depend on when he retires then? Furthermore, insurance should be bought when one is young and healthy as the premium will also be affordable. Student will be better off with no policies? Such as spending more on things like clothes, entertainment, shopping?; May 06, 2007 1:06 AM
Anonymous said...: Hey guys the two of you students,
Mr Tan's thinking appears to be that if a student dies, since he has no dependents (parents are not dependents by definition), there is no need for insurance cover for he student. The thinking is that insurance is to cover and provide for the dependants and not the students' parents. Got it????; May 09, 2007 12:13 PM
Anonymous said...: Hey "Teacher", which dictionary did you use to check that defines parents are not DEPENDANTS? By the way, check your spelling before you post.
What if the student has liabilities such as student loan? Who pays for them? The parents' psrents? And the worst case...what if the student is down with critical illness or total permanent disability? Want to die also cannot die? How? You pay for the medical bills? Tsk tsk...; May 09, 2007 7:26 PM