Larry Haverkamp wrote an article entitled "Not Everyone Needs Life Insurance" in the Consumer Magazine, a publication of the Consumer Association.
He has this joke: "High distribution costs are needed to compensate agents for the difficult job of selling insurance with high distribution costs". (This is a vicious cycle).
My view: It is possible to sell life insurance with lower distribution cost, and reduce the premium for consumers. This will lead to more sales for the agents.
Yes, not everyone needs insurance. But the insurance agents tell everyone they need insurance. They will cook up all sort of imaginary needs to justify their sale. In short , they just want to make a sale regardless of the real needs of the clients. Larry is right. He knows what he is talking. Visit his blog. You will be shocked to insurance giving different views about insurance and all with one goal ie. to make a sale.
ReplyDeleteHigh distribution cost is usually found in traditional products like par whole life and endowment. Agents usually recommend them because of high com they get. They make clients to believe that these can address protection need and at the same time provide a saving plan.The agents are giving you value for money. Worse, they are never interested whether these products do meet yours needs adequately; they do know they meet their pocket adequately. Buy term and invest is a time tested strategy and has been around for very long time. This strategy earns less for the agents and also many agents are not qualified or confident to use it for clients.
ReplyDeleteIt is must that you get a good and qualified adviser and not a saleman. Most insurance agents are salesman pushing you products that benefit them.
I seriously hope that the comments commonly seen in Mr Tan's blog are not how the public see a Financial adviser.
ReplyDeleteI do agree that the standard of advice can be improved, but the adviser should not be seen like a pest or parasite.
The work of a Financial Adviser is professional and noble. They have to constantly upgrade with times. They walk with their clients for life. They had helped numberous families to live with dignity, etc.
They are the only salespeople who try convincing people to save instead of spend.
Of course, end of the day, they need some incentives for a proper living to feed their families.
While it is not an attempt to disparage the genuine financial adviser, public must be made aware there is a huge number of insurance agents who have no qualms about fleecing the unwary customers out there.We want to bring to their attention of the existence of this run of the mill group of people who
ReplyDeleteare passing off themselves as qualified but not so.We want help the customers to see through them, to identify them. Obviously, to distinquish them is to see their qualifications.
Many of you have experienced insurance agents when they have somethjing to sell to you. They have nothing in their mind but something to sell. Let's face it. They live by selling. I am not against them if they are selling other goods but not financial products which you see their efficacy only many years down the road.Many were caught and have no idea where to seek redress. As comsumers you must know your rights. Check them out if they are qualified;from firends and professional bodies and also what are the right qualifications. Don't fall for the many letters after their name. Ask them what are they and check with the relevant bodies.
ReplyDeleteHope this advice will help you safeguard your interest. The best safeguard is to read up and educate yourself. Remember , not everyone needs insurance. Read Larry's blog.
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