If you go into the shop to buy product A for $1,000. There is another product B which is similar to A, but it cost $1,500 and gives additional items worth $300. Do you prefer product A or B?
Some life insurance products are designed to be like product B. It charges a higher premium and gives you frills that are worth less than the additional premium. But the customer is not able to know the value of the frills. The sales agent sells the enhanced product, because they can earn a higher commission. The enhanced product gives poorer value to the customer due to the higher marketing cost.
Lesson: Go for the standard products that can be compared easily. You can get better value due to competition. If you buy a complicated product, you are likely to be over-charged.
Classic example is Revosave from NTUc. The frills are worthless . Objective is to confuse and to make it look like and make the customers
ReplyDeletethink they will have more by paying for more. This is a marketing trick.
The frills are to mislead customers. Customers pay more to pay higher commission for the insurance agents.
ReplyDeleteIn selling new products are constantly created out of old products to pass off as new.Customers are funny. They believe and trust the agents but the agents have no qualms
to decieve and sell them.They don't seem to have any conscience. Money is their god and is above every thing , above clients' interest.Agents welcome new products because they are salesmen.
Mr Tan, would you liken NTUC Income's standard Personal Accident plan as Product A, and the PA+ID as Product B? Premiums are at least double for PA+ID.
ReplyDelete