Tan Kin Lian's Blog: Beware agents' glib sales lines

Monday, December 10, 2007

Beware agents' glib sales lines

Buying insurance?
Beware agents' glib sales lines
By Larry Haverkamp (Doc Money)

HOW much is your sum assured? Do you have convertibility? How about renewability? How about total confusion?

Hardly anyone understands insurance lingo. That's why some top agents skip the jargon and go straight for the heart.

They talk about life, death, loving, caring and - most of all - responsibility.

Here are the sales pitches I have run across most often. All are highly effective but they don't give you the full picture. How many can you recognise?

Sales pitch #1: 'Do you know how much it will cost to send your child to university?'
Sales pitch #2: 'My honest advice is: Save your money and buy an ILP.'
Sales pitch #3: 'If you buy term insurance, you won't get anything back at the end.
Sales pitch #4: 'Whole life and endowment returns are guaranteed. There are no losses.'

Read this article:
http://newpaper.asia1.com.sg/columnists/story/0,4136,131634,00.html?

http://www.tankinlian.com/drmoney/

11 comments:

Anonymous said...: Another 3 favourites.
#1. If you buy early the premium is lower.
#2. You may need one day why don't you buy now.
#3. Give your children a head start.

All the above spiels defy financial planning principles because all the 3 lines used by insurance salesmen is trying to create a need when there is none.
They may sound logical to the man in the street but insurance planning doesn't work this way.Insurance is bought to address immediate needs and not other future needs which may or may not happen.; December 10, 2007 8:51 AM
Anonymous said...: Buy a whole life because you need insurance most when you are old.

This is the stupidiest and most obvious line insurance agents use to con people.
You don't need insurance other than medical because you have no dependants. All your children would have grown up and are financially independant.The most important need is money for retirement.; December 10, 2007 9:36 AM
Anonymous said...: Some even go further to say that this living policy will guarantee you won't get critical illness.
If you compare with the bank ours is better;they give 0.8% only we give 4% guaranteed, you know!!
(The banks are insurance agents'sparring partners)must thank the banks.

Or in the bull market you sure make money or it is good time to buy or to sell or when you make money you can sell.
Check the Dow Jones to see you can buy or not.
Or you buy out tech fund you get more units, vely cheap.You buy Prime Fund you get little, vely expensive now.
This is the kind of advice you get from insurance agents. HOW CAN, LAH?; December 10, 2007 1:54 PM
Anonymous said...: To each his own.

For someone like me, who don't have the time and patience to check out the investments/tips from stockbroker, I find a friend I liked, and since some of the questions is exactly what life insurance is for, I am fine with paying him for his time and the products.

I guess Larry also has to sell himself - if nobody reads his column, he will be axed from the tabloid. Unless of course, he don't mind writing for free - I would love to hire a "work for free" person. The insurance people are always easy punching bags for Larry and everyone else who thinks they are paying too much.

If there any law in Singapore, that if I followed advice from a tabloid columnist and if the advice did not turn out the way I expected, I can sue him or the tabloid for damages?

I have a close relative who has been in this job for many years, and I notice the dedication he gave to his clients and the bond he had with them. Yes he sold life insurance, endowments, term insurance, car insurance, everything. He also delivered claim cheques, assisted with reimbursement claims, etc. It's a career for him.

With all due respect, Mr. Tan, you are in the business for almost 3 decades, and yet I noticed 90% of your blog is anti-insurance profession - how do you feel when others put everyone in the insurance profession down, regardless of merit.

You don't have to publish this entry.; December 10, 2007 3:33 PM
Anonymous said...: Mr. Tan is not putting anyone down but to put things right. I notice that you speak like an insurance agent. You may not be one but looking at the language you used , you sure look like someone who knows something about insurance and the work of insurance agents.Perhaps you have a very long association with your agent that you are talking like him. You are not alone.Many picked up the lingo from them.But if you think you know about insurance you don't need the insurance agent because what he does is filling the forms for you, making claims, buying travel insurance for you, giving you a chegue for reimbursement.The salesman does this but the advice that you need for all your personal finances ,he can't.If you think what your agent does is alright you are better off with an errand boy.
If you are willing to get another opinion to look into the insurance policies you have, I would bet that you be shocked at what you have . Half of the policies may not be suitable for you, or you might be under insured or over insured. I am talking about having a real qualified adviser who advises and not salesman
Today, insurance agents are obsolete or soon to be obsolete if he or she does what you described as their work. People today expect more. They don't want to pay them for that kind of work. They are salesman work.
Advisers would recommend the best for their clients and addressing them in the best possible means. They still get paid decently for work done. Salesmen sell rubbish and more often than not would scheme to sell customers products with highest commission. Most customers are poor people. they can't afford to have a fox in charge of their financial hen house. It is ok for the rich.They can have a few foxes or vixens.
Endowment and whole life plans are obsolete and poor investment. In the light of inflation going up to 5% these are rich men's products. The poor can ill afford to lose.The poor need a lot of help to get them out of the poverty rut.The insurance agents can't help and only advisers who are qualified and have their interest at heart can help.
Mr. Tan is here to educate and to create awareness of what the products that GOOD TODAY and not yesterday.; December 10, 2007 7:09 PM
Anonymous said...: i have learnt a lot from Mr Tan's blog.

so, as more people get more informed, (thanks to info by Mr Tan and Larry) we are able to make INFORMED choices and not choices that insurance salesmen try to make for us.

yes, if people know what products are best for them and yet go for products with high commission to the agents, so be it. at least these people made a CHOICE to pay the higher charges and not "fooled" with all the sales talk.

i have met many insurance agents and NONE are interested in selling me term insurance. it says a lot about the state of affairs in the industry.

so before insurance agents slam blogs like this, pls:

1. get your act together and build proper TRUST with your clients and act in their best interests instead of your own, or

2. find another job that has no ethical conflicts; December 11, 2007 1:09 PM
Anonymous said...: Another line used by insurance agents is "buy insurance to repay your parents if you die"

Another is " no insurance ,you can use your CPF special account to buy Growth for double indemnity insurance"

Take up under your wife the waiver of premium is cheaper.; December 11, 2007 9:45 PM
Anonymous said...: Term is not permanent but temporary insurance, the agents will tell you.
Who needs a permanent insurance when our needs are not permanent.Our life isn't permanent too.
What I can think of is the agents are looking for a permanent source of income and so is the insurer for permanent source of revenue.
This is a conspiracy between the salesmen and the company to squeeze their customers.; December 12, 2007 11:54 PM
Unknown said...: Yes, if you have dependents like kids but will you be so sure that yr own kids will be there to take care of you when you fall sick or have a long illness? What if you are single & have elderly parents to take care of & you as the younger 1 have a critical illness also to see to..

Thats where adequate insurance need to bought when 1 is young as nobody knows what the future forbears..; December 13, 2007 1:13 AM
Anonymous said...: Yes if you have needs go ahead and buy the maximum. Having to support an aged parent is a need; having children is a need;How to max your cover? By buying a cash value to max?
Only you are a rich. man. The agents want to sell a cash value only and they don't care whether you have enough.More important they have enough commission.; December 13, 2007 9:24 AM
Unknown said...: Thats why choosing e right company is important & asking lots of questions are important before commiting e cash..spare e time to think it over..; December 13, 2007 12:29 PM