I was told that some young people bought too much life insurance. They bought policies for themselves, for their children, to save for their eduation, for their medical expenses, etc.
The total insurance premium that they have to pay takes away half of their salary. They face some financial difficulty in managing their expenses.
I was asked by their counsellor, on what are their options. If they terminate some of the policies, they would have to suffer a loss. But, if they continue, they find it difficult to cope.
Here is my frank view. The insurance adviser has over-sold and gave bad advice to the customer. The customer can make a complaint to the authorities for the bad advice, and ask for a refund of the premiums that they have paid.
I hope that the adviser is made responsible for the bad advice that has been given. Do not let them get away with it.
I have always maintained that insurance agents never put clients' interest before theirs because
ReplyDelete1.They are not trained in financial planning or poorly trained.
2. They have entry level qualifications just good for licensing.
3.They enter the industry because they are retrenched or no better paying job than insurance. Imagine with 4 "O" levels they have potentials to earn 5 figure income or CEOs' pay.How?
4. They enter industry because they want to make quick and lot of money.
5. They are salespeople at best.
6. They don't have passion or real sincerity or skills.If you hear them claiming they have, ask them .If they have why they have not upgraded their qualifications or skills that will help the clients.There is a saying, sincerity is the most dangerous and disastrous because of trust and advice always goes awry.You read this very often in the press. So and So entrusted xxx amount of money to so and so and got cheated or advice inappropriate.
Remember to hire an adviser who is registered with an association or society which is responsible for his or hers certification as practitioner.eg like lawyers and doctors and financial planners. They can be censored, suspended, fined or struck off the register if they have committed serious misconduct against the client.
Ask the adviser for his or her credentials before engaging their service.
These are the qualifications you might want to see: CFP, CFA, CPA, LLB and not bachelors or masters of engineering or computer or science.
This is your safeguard against rogue insurance agents (both male and female).
Mr Tan,
ReplyDeleteI share the same views with you.
I have just realized that my Prudential Financial Planner only offered me Whole Life insurance products but not Term Life when my wife was about to give birth to our first son in 2005.
After investigating the amount of commission Financial Planners get from Whole Life vs Term Life now I understood why he never offered me the cheaper one.
I finally "confronted" him last week about the whole thing and he admitted that the commission is bigger for Whole Life than Term Life (by a factor of 10 or more).
Should I inform the authorities? Is MAS the right authority to handle this?
Thanks!
Examples of products that are not good for the ordinary folks are the traditional products and those limited premium and also the just introduced revosave by Income. They
ReplyDeletecarry high costs to pay the agents with high commission..The ordinary customers buy them only to lapse them after a few years.They waste a lot money. But do the insurance agents care? Worse, in the mean time they get low coverage .What if something happens? Bringing a cheque to deceased customer's spouse isn't comforting when every thing settles down and the spouse discovers that the deceased was grossly under covered.
The ordinary folks need a lot of coverage at the lowest cost but unfortunately end up getting lesser coverage because insurance agents want high commission , therefore sell to them traditional products with high cost.
The situation is now getting worser
because of promotion and incentives reward for agents who can hit certain targets. The agents just sell as much without caring for the clients' needs.
There must be strict regulations to stop this trend.
Look at what your needs are.
ReplyDelete1.I have mentioned several times, Hospital and Surgical Plan is the basic need, which many are still hesitant in considering, comparing between Shield Plans. for goodness sake, take any Shield Plan that one favours and compare later, if one has no time to decide, until it is too late.
2.Review some of the old plan riders, that was taken years back. Today's riders and Personal Accident Plans premium are much lower.
Some people just couldn't be bothered until too late.
Some people procastinate and then worst scenario happens.
List out the needs and then plan to meet the need.
- Thomas Phua
Yes, time is always of e essence...e earlier one gets coverage e better it is.But, planning with moderation is also a key factor :>
ReplyDeleteSometimes, advisers recommend term. Customers refuse to get because it does not offer returns. When they are recommended regular investment, they are afraid of risk.
ReplyDeleteWhen they are not convinced with both, advisers cannot force them down the throat.
NOT ALL ADVISERS ARE LIAR, DISHONEST, GREEDY, DREADFUL, HORRIBLE, etc.
Many made a modest living, working passionately, serving their clients with all their claims, enquiries, services, yearly gifts and the endless complains.
Why are not other salespeople such as a $3,000 vacuum cleaner man being criticised or professionals such as lawyers who charges us millions for nothing being criticised.
I stand to defend the integrity of the many good advisers in Singapore. There are certainly many good ones around who had served the community well over the years.
Yes , it is true not all insurance agents are liar, greedy, dishonest etc. and so it is also true most agents are incompetent. If agents' roles are to provide the services as
ReplyDeletelisted above then they should be paid for those services only and not huge commission. Anybody or tom, dick and harry can be trained to do the jobs.
But insurance products are far more complicated than those useless services provided by insurance agents. They are just out to clean up the poor clients, old people and women especailly.
They are also being criticised when the need arises. For example, there was a letter regarding a housing agent who raise the price by some 150,000 when the owner agreed to share the profits with her. She did this in five minutes time and that is why the owner realised he was conned.
ReplyDeleteThe reason you see criticisms here on insurance agents is simply because this blog's owner was an eminent insurance professional and hence the forum here revolves around insurance.
I would advise the insurance agents here not to be too sensitive to the comments vented by frustrated clients as it simply reflects their experiences which they are sharing. The way to go is to stick to your honest dealings and be sincere and upfront with your clients. If you have done so, then your conscience is clear and people will be able to see it, just like many who can see that Mr Tan Kin Lian is honest and upfront with the policy holders of Income and no one can accuse him of those undesireable actions without incurring the wrath of the thousands of policy holders who have benefited from his benevolence.
Ii won't be long when agents will pay back what they con from their customers. It is round the corner and this will be their D-day...
ReplyDeleteIt will be a good guide to ask your insurance agent to show you what they themselves have.
ReplyDeleteAn agent may have made a big commission out of customer, as perceived by many.
ReplyDeleteBut at the funeral wake, the agent is the most comforting person to be met by the deceased's family member.
Think of a day, how insurance can be distributed without middle man, and claims can be submitted online and hotline is the only avenue to submit claim, to press 1,2 or 3.
The agent may be the comforting person AT the funeral wake but when every thing settles down and grief subsided and the bereaveds in the presence of their mind , discover the money left by the deceased not enough even to settle the funeral expenses, that is when reality creeps in.
ReplyDeleteThe point here is I am saying most insurance agents think that is great to bring a cheque but what is the amount of the cheque? This i s more important. A cheque that will bring relief is a cheque that tells the widow that she need not worry about the next 30years and including her retirement. She need not return and join the queue for employment at age 50.This is comforting.
Not many widows know their rights. She can engage some one to look into this to ask why her late husband was insured for so little.If the fact finding form tells otherwise; a lot of huge figures but only miserable sum taken up. There i something wrong.Was there a conflict of interest? If there was ,the widow can raise this and take up a legal suit against the agent.
The agent didn't do a good job. It is obvious that agent was product seller and sold a product which pays high commission.
I seriously wonder whether what you said about the agent being the most comforting person is guaranteed. Or is it under the column of estimated. Now while I am still alive I cannot even get simple answers and kept being given the merry go round, I really shudder at the thought of when I am not around. I know Income has many staff, and is resource rich. I have called to advise them on why they are sending me so many useless mails, including one letter for each and every policy that I have, repeating the same thing and also sending me what I do not require but denying me what I ask for. No managers bother to call back and it is just left to the front line staff who may not be in a position to rectify the matter. Now I think Income is a joke when Mr. Tan Kin Lian is no longer there to oversee things.
ReplyDeleteIn this case, maybe think about getting another husband or wife better than insurance.....
ReplyDeleteThat will be better insurance perhaps.
Insurance is important if it is properly sold. The problem selling insurance is lucrative that many join the trade just to prey on the unwary victims who usually are the poor. They are easily bluffed and conned.
ReplyDeleteThey are the people who need most help and yet they are the people who suffer most when they lost a loved one . The loved one for the obvious reason never left much for them becuase the insurance salesman didn't do the job properly.The salesman sold them products with high commission. So when we talk about the insurance salesman bringing a cheque to the funeral wake, it is disgusting when the amount in the cheque is small.The salesman ought to be ashamed.
Yes, the insurance salesman is disgusting and not insurance is the issue.With huge proceed from the insurance you can have another spouse.....that is what insurance is supposed to replace.
after reading all these comments, i jus feel that these ppl are jus making comments based on feelings, on hearsay n not rational!! U ppl wan good service from insurance agents, but u ppl always reject insurance agents. U wan big sum assured payouts, but only willing to afford alittle premiums. U wan good returns, yet dun wan to take any risks. U all jus wan to tok n complaint, never wan to listen n follow. Always say u dun need insurance now, but when mishaps happens, complaint why insurance agent din sell/recommend this plan! Always say insurance agents earns alot, want free gifts, wan free dinner..etc. In fact, selling insurance isnt tat easy money as what others tot.. esp with so many ppl LIKE U complaining this n tat!!!
ReplyDelete