Tan Kin Lian's Blog: Agent prefer to sell ILP

Friday, August 08, 2008

Agent prefer to sell ILP

A, an American living in Singapore, recently bought some properties and was looking for insurance. He turned to his friend, B, who works in the insurance industry, to help him out.

B recommended that A purchases term insurance, either level term or mortgage protection, as the insurance need was to just cover off the mortgages. B drafted a letter up on behalf of A, requesting term quotes to the top 10 insurance companies in Singapore.

A received quotes for unit linked investment plans from all the companies, and some companies stated they didn't sell term, or that they didn't know what "level term" was. A & B decided to follow up with company X, as they had the cheapest quote so far. They were told that "X doesn't offer level term", to which B replied "Yes you do, it's called x-Term". They requested that a senior agent come out and meet with them.

At the meeting, the agent pulled out his laptop and started to show ILP's. Again, A said that he is looking for term. The agent replied that term was not worth his time to do. This would have been the easiest sale in the world, as A was ready to sign on the dotted line right there, no hard sale to do, just fill out the paper work.

They also requested a meeting with company Y. They never showed up, and when they called, they said sorry and never arranged another meeting.

So, A & B decided to get some quotes from the USA, since he's American. The term quotes coming in from the USA, where about 50% cheaper than the quotes from Singapore. Even taking into account that they were for preferred underwriting, and underwriting tests are cheaper in the US, this is a large markup in Singapore. Particularly since Singapore mortality is better than the US!

So the morale of the tale, even if you want to buy term, it is very difficult to do.

6 comments:

Junyang said...: Mr Tan, I just want to highlight a typo that you made twice on different occasions. I think it should be "moral" of story rather than "morale" of story.; August 08, 2008 2:12 PM
zhummmeng said...: How to become MDRT, COT OR TOT by selling terms? Only whole life and endowment insurance can get you there. The awards are based on how much commissions you earned for that year and not for helping how many people meet their financial needs.
You see the irony of the industry?
It is bullshit. Agents like you to believe that they are in a NOBLE industry helping you poor consumers retire rich, adequately covered , sending your children to the U.
But government statistics show otherwise. People are grossly under insured. Only 25% of CPF members cam meet the minimum sum . 65% of Singapore got to KLKK the void deck in their 'golden' years.
Why????? wholelife and endowment products are the reasons. These products can only help the insurance salesmen and women, those MDRT, COT ,TOT to retire and not you. These products shortchange you of the protection and the return.
What term? No,lah. We don't have. We only SELL whole life products with high commission. take it or leave it; August 08, 2008 2:25 PM
ym said...: insurance co in more developed countries sell term-insurance directly.. (via net/telephone).. this is very convenient..

personal lines insurance is also sold directly..

geico, iag, allianz, to name a few..

the savings to customers can be alot!..

i expect some forward looking companies to move in this direction in next 5 years..; August 08, 2008 2:51 PM
zhummmeng said...: I hope that MAS will regulate soon that consumers can only buy directly products from manufacturers or wholesalers according to the prescriptions or recommendations by qualified financial planners.This will eliminate conflict of interest and the insurance salesmen. Only competent advisers can practise as an adviser just like in US and Australia.
Singapore must quickly make this change . If not, more and more consumers will be trapped with whole life and endowment products that get them no where except poverty.; August 08, 2008 10:51 PM
Unknown said...: Hi all,

I came across this local insurance website (http://www.insupermart.com/), which is a part of PhillipCapital. Apparently they offer term insurance, but I've no idea of their reliability or level of service. Those interested could ask them for a quote.; August 09, 2008 11:07 PM
Wealth Journey said...: I always recommend TERM insurance and Invest the Difference..

After explaining and showing them how much they could have saved by buying Term and how much they can get from investing the difference...

They will still tell you.... "I KNOW... But the insurance company can guaranteed the payment.. Can you. I KNOW the historical returns for stocks are xx, but can you guranteed it. Whole Life and ILP got guaranteed Cash value.. I'll treat it as a form of forced savings."

Anyway, most of them turn to other advisors who are willing to provide them with Whole Life and ILP.

So, it takes two hands to clap. The advisors can succeed in selling ILP and Whole Life because the customers wants it.

What happen to those advisors who recommend term and invest the rest like me? They get rejected like me most of the time.; August 10, 2008 4:24 AM