Wednesday, October 27, 2010

Why insurers, agents may turn a deaf ear to SM Goh's appeal

If an insurer or its agent can earn so much by selling a whole-life or investment-linked policy,
why should they want to sell term insurance?
If MAS wishes to give better protection to consumers,
it should carry out a survey to find out
if the consumers are being given the proper advice and being charged fairly
on the life insurance products.

Tan Kin Lian


jovan said...

I totally AGREE~!

zhummmeng said...

Come on, the man is obssessed with being #1. Call the agents to sell term? no way, lah..
He is not even asking his agents to do the right thing, ie to sell based on fact find and analysis which is fair dealing to consumers but he is not calling for that. He is urging his agents to push and peddle those crap products to earn high APIs and high commission for the agents.
MAS must see through this 'people before profit' crap. It is a scam to bullshit the public. If it is not then the agents must be told to conduct proper financial planning instead of pushing products.
Don't be a victim in the next 2 months.

Lye Khuen Way said...

Was pleasantly surprised that Mr Tan's letter was published in today's ST - 27th October.
Now let us all wait & see if any Authority will do any thing.
MAS and the Insurance Association cannot now claim that no one, no less than someone of Mr Tan's standing as an ex-Insurance man had "complained".

S. Q. said...

Hello Mr Tan, glad to hear from you your interpretation but you made it sound like agents get 50% of premium as commission EVERY year. As far as I understand, for e.g. agents may get 40% first year, 4% 2nd year, 3% 3rd year, and no more commission subsequently, or something along this concept.

Therefore it's not exactly right to simply say "If 50 per cent of this amount is taken away" because it seems to imply that the 50% comm is for as long as policy is held and premiums paid...

I may be wrong. Maybe there're really insurers out there who pay 50% comm for premiums received for such a long period?

By the way, it's like buying software (Im more familiar with this).
Sales guy gets comm (%age on either profit or revenue) for closing deal.
Client pays license, services and maintenance (which can be more than 20% of license fee).
2nd year, client will pay for maintenance (e.g. 22% of license fee) and license again (if it's not a one time license) but there'll be no more comm for sales guy unless he sells something else (another product) or client needs to upgrade/modify (services).

Anyway, kindly correct me if I'm wrong regarding my understanding of comm structure of the mentioned insurance products.


zhummmeng said...

'A' company pays 50% 1st year., 25% for next 2 years and 5% for the rest of the term.. If it is forever the agent is paid for 4ever.
Pru used to pay 50%, 25%, 25% and 5% for next 3years..
The other companies have similar structure, more or less..
the incentives on top of production? the allowances and the year end bonus, all of them come from the products and NOT from the CEO's pocket, right?
The question here is do the agents deserve the commission? NONE!!!!for doing nothing other than (1)filling up forms (2)read the BIs (3) submit case for approval (4)and nothing worthy and nothing that adds to the financial life of the customers.

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