Tan Kin Lian's Blog: Experience in talking to insurance agents

Wednesday, November 21, 2007

Experience in talking to insurance agents

Hi, Mr. Tan,

I would like to share my experience with you.

I met five different agents. I am not able to identify the difference in their advice. Three agents strongly promotes Investment Linked Insurance by illustrating to me the working of dollar cost averaging. I already knew it, after being eduated by your blog.

I asked them about term insurance, but they did not want to talk about it. Instead, they try to get me to buy traditional life insurance, saying that term has strong disadvantage since it doesn't cover crisis after the age of 65.

Two other agents told me that term covering $150,000 is not enough. They recommended $350,000. They showed some calculation to me, but I don't really understand. They recommended a combination of term and other insurance that take away $139 a month.

I do believe that all insurance agent does have the professionalism to advise to their client. And it is true since the advice they gave are all so similar, "BUY as many as you can". After talking to the agents, I find that noobody would like to make a deal with low commission.

I do believe there are some insurance agents in this world would really take care of us by considering our real situation and be responsible for us and our money. But I don't think I will be the lucky one to meet them, so I decide to give up.

Some years later, after saving enough money, I will probably take a master degree on finance or related field. If we cannot trust anyone, the only thing we can do is to equip ourselves with financial knowledge so that we won't be easily fooled.

I do sincerely wish that Mr. Tan and your family happy for ever since you are the only one in the insurance industry I know would like to taking care of the general public in Singpore by educating them. Thanks again for educating all singaporean and foreigners by writing your blog.

10 comments:

Anonymous said...: Before taking the master in finance I suggest you consider the CFP course and beat the insurance agents at their game and see for yourself how incompetent and inadequate these salespeople are. The website is www.fpas.org.sg
This is a course that equips you with the knowledge of every area of the personal finance. This is a globally recognised professional designation. The ISO adopts their practice standard as the standard
for the financial industry.
Get more details from the website.
After your graduation your perspective of finance will change and you wouldn't want to leave your finances with the insurance salesmen.; November 21, 2007 12:31 PM
Anonymous said...: Insurance agents all have one common goal, that is to sell to you as many policies as they can.Just like you say , that is their professionalism. To them everything needs insurance.
They would not sell you term insurance let alone know how to recommend term. They studied that traditional wholelife is a permanent insurance but endowment with a term maturity is also permanent because it gives them high commission. In reality they will sell something that gives them high commission. They are not interested in your needs.; November 21, 2007 12:43 PM
Anonymous said...: Thanks for your advice, I will be looking at cfp course.; November 21, 2007 4:50 PM
Unknown said...: always do yr own findings..it is risky without insurance cover, you may need it as a backup plan in e future..; November 21, 2007 11:00 PM
Anonymous said...: For your sake, I hope you did something after talking to 5 different agents.

I think it is important to identify your objective before you even approach one to save yourself some time. For e.g., you know you need $150,000, then just get $150,000.

From your story, it seemed that you are not sure what you want to do and see if there is anything else better outside there. Have you consider that with changing times, different products will be made available to cater to different needs.

It is interesting to see someone earning $4000/month trying to see the difference between price between term plans and see whether you can save that $1.

Is your life just about getting some insurance or the best deal in insurance. how about hiring a student who can use a calculator to perform this task? Have you considered sharing some of your precious time in helping others in the society or saving the environment?

You know people say Singapore is a small country, but I hope our people's aspirations are greater.; November 21, 2007 11:19 PM
Unknown said...: 1) You do not need a masters degree to be rich. The world's richest ppl are sch drop outs.

2) People work for $$. Hundreds of millions of people in this world do so every single day. If your boss cut your pay from $5k a month to $1k a month will you still work for him if workload is still the same? The agent will probably earn $1k/mth selling term vs $5k/mth selling life. The answer is obvious. But again millions & millions of people wake up everyday and slog just for more $$. Why penalize only insurance agents?; November 22, 2007 12:30 AM
Anonymous said...: Would say both no right or wrong.
Everyone work to live as long its ethical.
A doctor or company CEO also earn high income but no one will say their commission too high?
ChFC/CPF a good one, but heard study that would need so much time? Why not just consult a friend/relatives who know them?; November 22, 2007 2:20 AM
Anonymous said...: I think we miss the point here. It is a complain that the insurance salesmen are NOT doing the job properly and professionally.It is alright that the insurance salesmen earn a commission but the commission must commensurate with the quality of the service or advice provided.Especially the salesman has vested interest and his sales pitch is biased toward s the product that gives highest commission when another low cost product can address more efficiently. This is conflict of interest and not that you worry that he earns a commission.
If the agent is ethical and competent this would not happen.
What if a doctor charges an exorbitant fee without even examining you; or would you think that you should pay a charitable organisation CEO more than $600k?
Not that you need a master degree; yes , you are right history is littered with a lot of educated poor, professors and monks with PhDs. But the point is, he wants to acquire that knowledge so that he would NOT BE CONNED by those unethical incompetent insurance salesmen out there.You can't trust them ,just like those 5 he encountered.No insurance salesmen can be trusted, this will be the conclusion after the experience.
If you read the posting by Mr. Tan above you would agree his recommendation of decreasing term and invest the saving is both effective and efficient and this definitely is in the interest of the client. The agent still earns a decent commission.If you think that is not enough compensation for your
work, why don't you rob a bank. High risk high reward?
Most insurance agents just fill forms and would you pay them high commission ? You are right there are millions of them, waking up every morning raring to fill forms and fleece the unwary public.; November 22, 2007 9:17 AM
Lanyu said...: My humble opinion is that it is true that the general public ought to get a certain level of education so that they can have a basic proficiency to assess the advice provided. However, the requirement for the masters' or the CPF would be too demanding on the layman, for not everyone have the time, nor the resources (e.g. the self-study CPF course cost $$3,000 for 6 modules) to complete the courses. This is almost akin to the analogy of becoming a doctor so that one can do a self-diagnosis. Fundamentally, I think that the central question is the conflict between self-determination and the reliance on 'expert' advice. To what extent can one be fully conscious of one's needs and not depend on others' opinions? This demands great self-responsibility. Moreover, even if one is responsible, there will still be circumstances whereby self-help is impossible. The best example is this - even if you are the best surgeon in the world, you cannot perform an operation on yourself.; November 23, 2007 12:00 AM
Anonymous said...: The point here is all the insurance salesmen out there cannot be trusted.
To safeguard your finances being fleeced by these salesmen the best defence is to equip yourself. With the knowledge you can pick out the qualified from the rogue ones.
The next alternative is seek the help
of the body or association that licenses them. This is safer only.
You don't marry the first girl you kissed, do you?; November 23, 2007 9:19 AM