Monday, December 06, 2010

Avoid insurance agents

I wish to advise consumers to avoid insurance agents (unless this is someone that you know and can trust). I have seen too many cases of insurance agents cheating on unsuspecting consumers by telling blatant lies. (There are many cases where they used half truths, which is also dishonest, but not as bad as blatant lies).

This statement may be unfair to some agents who act honestly and take care of their customers' interest. But it is difficult for consumers to tell the honest agent from the dishonest ones. This situation is made worse when the the dishonest agents are allowed to get away scot-free by asking consumers to sign blank forms. Some of the life insurance policies are clearly unfair to consumers, with excessive charges that seem to be designed to rip off the unwary consumers.

I urge MAS to investigate complaints of dishonest practices, rather than let the matter be decided by FIDREC as a dispute. FIDREC takes a long time to decide, and does not have the disciplinary power.

Tan Kin Lian


yujuan said...

Also avoid all sales people who make a living out of commissions, and this include bank relationship managers and estate brokers, the latter if unavoidable never trust them, they lie with a straight face just to close a sale.
Before buying a house, bring along your trusted renovation contractor or engage a Company that gives advice for a fee charge, and ask these people to go through the place with a fine comb. Better pay for such services, then to be saddled with problems, better to ask about the history of the property from the neighbouring houses too.

Vincent Sear said...

I think that it's alright to look for insurance agents if the purpose is to buy insurance, but not for savings and investments.

The insurance industry is separated into general and life. The practices in both are very uncommon. General insurance (medical, accident, fire etc.) charges low level commission but same every year. Life insurance charges high upfront commission that tapers off guadually.

General insurance is pure indemnity, except for personal accident based on sum assured. Life insurance is a composite of sum assured and investment returns, except for term.

Settle all these insurance needs, if any, accordingly, and for savings and investment needs, look for bankers and stockbrokers.

zhummmeng said...

Insurance agents sell and peddle products on half truth..This is a fact and that is what selling is all about.
The line dividing Salesmanship and conmanship is blurred today. In fact they can be used interchangeably.
If you call an insurance agent a salesman or a conman there is no difference. Both use the same strategies......half truth, lies, misrepresentation, concealment of material facts etc., agree?
Is this your insurance agent? I bet your insurance agent is if he or she is a product pusher....tick option 3 product advice agents are all conmen and women. They breach section 27 of the FAA. MAS should discipline them, fine, suspension, revocation and jail.

Vincent Sear said...

Ironically, my view is that KYC/FNA shouldn't be used by tied insurance agents, or even shouldn't be allowed to be used.

Insurance agents are in no position to provide comprehensive and unbiased financial planning advice, whatever qualification they may have. They'll have to recommend their companies' products. The KYC/FNA if answered at option 1 or 2, gives the agent more information for sales peddling instead of helping the client to make a good decision.

The standard insurance proposal form with medical and financial underwriting questionnaire should suffice as to whether a client is insurable and the product is suitable and affordable.

Allowing insurance agents to pretend to be financial planners with professional KYC/FNA make the product peddling process even more dangerous to unsuspecting clients.

zhummmeng said...

The insurance agents shouldn't be in this business, ie selling financial products..As you said they are not qualified and not competent to recommend any of these products.They peddle and push and that is dangerous and worse they peddle whatever the products their company carries that might not be suitable for consumers. That is why MAS is tightening up the rules and hope the population of financial advisers will be reduced to 5000 competent and qualified in financial planning, insurance and investment.
Singapore will follow UK and Australia to ban commission. Australia in mid 2011, UK in mid 2012, perhaps Singapore in end 2012, followed by Hong Kong, Malaysia. India already started banning commission for investment products in 2009 and later insurance products..
From this scenario what can the insurance salesmen peddle? Fee driven will require them to show expertise , knowledge and skill and fee will depend on scope of service and advice to be rendered.
Insurance agents will soon follow the dinosaurs to the grave.

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