In France, there are virtually no life insurance agents left. All the life insurance sales are carried out by the banks or by salaried employees.
The upfront sales charge is 1% or less for single premium products. The annual fee deducted from the investment fund is 0.5% for equities and 0.1% for fixed income.
These charge are very low. Life insurance gives good value to the customers.
Previously, the sales were done by life insurance agents earning a high rate of commission. When the agents were forced to disclose the high commission to the customer, resulting in no cash value for the first two years, the customers refused to buy the products.
In Singapore, the high charges are disclosed to the customers. But the customers are not aware that they have the alternative to "buy term and invest the difference". They pay the high sales charges and, when they learned about these charges later, they regret their decisions.
In Singapore customers are clueless about insurance. They have no idea of the purpose of insurance. Many think they know but they actually don't know. As long as they have some insurance it is enough.And having a million dollar insurance cover seems to make them exclusive.They don't know whether they have the right insurance.Usually this group of people are worth more death than alive.
ReplyDeleteHowever, majority do not know their rights as consumers. They have no idea how to take legal actions against insurance agents. They think it is expensive to sue.
They only know how to whine when they lost money. This is the only thing they know.
Of course the insurers are also bucking this trend.They cannot afford to be at the mercy of consumers when consumerism rears its head.I just hope for that day when we need not go through an insurance agent.
Perhaps Mr Tan with his vast experience can setup a "revoIns" company to benefit the people.
ReplyDeleteThe funny thing is when a product cost or charges are transparent customers complain expensive but when not revealed, like traditional products they accept. You can vomit blood trying to explain the charges.
ReplyDeleteThe moral of the story is never disclose to the customers too much. Tell them what they like to hear.
Don't tell them how much you earn lest they ask too many questions. Telling the truth has its backlash.
Another observation is customers want comparison before they buy. I am amazed. What are they comparing?
Premium? features? benefits? early returns? final returns? etc How to find the right one?What do they know?
Most customers DIY their needs.I wonder if they are self taught financial planner because when you approach to help, their standard reply is "no needs" or " I don't need" or " I got already" If they do really know their needs they need not use insurance agents. Why pay high commission? There is a saying when a pig goes to the slaugther house they don't even know what awaits them. The DIY customers are like this pig when they finally decide what to buy from an agent.
Customers think they are smart when they are actually.......
Isn't it expensive to sue? Roughly how much will it cost to sue? Are there any precedent cases of consumers suing insurance companies? Usually when calamity strikes, the family is already devastated. The last thing on their minds and resources is to sue which will cost money and resources which are stretched at that time. What organisations can someone turn to for advice before approaching expensive lawyers?
ReplyDeleteThanks
Some time, I wonder if we do believe insurer can survive on low cost.
ReplyDeleteWho pays the staff salary? Is the premium paying the agent commission only, so simple?
Who else gets a piece of the pie for the distribution cost?
Where does the CEO draw his salary from?
I hope Mr Tan will be fair to answer this and not block my views.
There are steps to take. First, bring it up to the company if it is ignored or not settled between the parties then you can use CASE to take up your case with the tribunal or you bring your case before the dispute resolution body and if it is not settled, institute a private legal suit against the agent or insurer or jointly.
ReplyDeleteIn US there are legal firms specialising in legal suits against insurance agents. The firm can take up the case for free but it is entittled to a cut in the monetary award agreed between the client and the firm. Maybe one can have such arrangement with a lawyer if there is a taker.