Friday, December 10, 2010

Risk of becoming an insurance agent

Some people gave up an office job to become an insurance agent, on the promise of being able to increase their earnings significantly. There are risks, as explained by the wife of an ex-insurance agent.

Do consider carefully, before you jump in. You may face stress, feel bad about cheating your friends, or suffer financial loss!


zhummmeng said...

People are attracted by the get rich quick scheme offered by insurance companies. The companies also dangle cash joining incentives like 2 companies are doing right now, aia and manulife. They poach from each with incentives and counter poach and offer.I wonder MAS is aware of this unethical practice.
To stop all this MAS must ban commission to protect the consumers because consumers will get proper advice and suitable products according to their needs and circumstances.

Bai Hu said...

Hi Mr.Tan. I totally agree with what this article has written. I ever have a 'good' friend who started to sell insurance in Prudential after graduated from NUS. But i later found out that he did not reveal many info to me. When he is being queried, he mumble & stumbled in front of me. I straight away terminated the policy & tell him off. So u can see, when people are being desperated, they can do all kinds of stuff to people who are dear to them. I just hope that more of these stories can be spreaded around to create more awareness of these rampant cheating by insurance agents.

dave said...

Dear Mr Tan
This article should be extended to people in the financial advisory line besides insurance agents. Many have joined and quit because some of their bosses are quota driven as their income depends on those under them. Quota - they 'claim' it is MAS requirement that they must achieve $25,000 commissions if not have to be terminated. A lot of companies nowadays tend to quote this is 'MAS' requirement, whether it is true or not.
Mr Tan, maybe a 'whistle blower' site could be set up to give anonymous 'tip off' and activate MAS to check on these companies.

rex said...

REX comments as follows,
i think this is a serious offence of misrepresentation, if any agent should claim that "it is an MAS requirement" and it is not really the case.
I hope that Mr Tan or some learned reader could confirm whether it is truly, actually an MAS requirement?


zhummmeng said...

It is NOT a MAS is the company's..there is a also an agency's requirement which is higher or double the company's.
The quota adds to the pressure and the agents in their desperation resort to unethical practices and cheating.
MAS must put a stop to all this.

dave said...

As the financial industry becomes more complex and regulated, we need a system to trigger off - tip off for regulators to investigate and erridicate company's license for company using MAS name in vain. We have come across many other instances, this is MAS requirement etc etc. How sad, we claim to be 1st in everything but no one is daring enough to talk to big brother MAS.

zhummmeng said...

It has been suggested umpteen times that MAS should have whistle blowing channel for the public or a hot email to tip off the malpractices of insurance agents and the companies..
No use having one in the company.Who dares to report the CEO or a senior manager or an agent to compliance officer who is an employee of the company?
MAS should plant a mole in every financial company.
MAS should know in the insurance company the way they comply with the FAA is like a conspiracy to cheat MAS..Eg. the fact find forms, writing the fact find forms,
the recommendations, the reasonable basis requirement are all rubbish. MAS should check all of them. Not surprised that the fact finds are used as cover up to push products. If there has been true fact find why whole life or endowment or anticipated endowment products are still 'recommended'? No way can these products be recommended if the fact find is real and the products recommended according to reasonable basis.
Don't trust the insurance companies. They are all in cahoot to cheat the consumers.
Have a whistle bowing channel for the public to complain against the insurance agents and the companies.

Vincent Sear said...

Zhummmeng is right. There's no such thing as MAS requirement of commission income. It's the company's quota. It's usually on an FYC basis, first year commission, i.e. new cases, trailing commission doesn't count.

For example, let's say a company has a system of paying 50% FYC, 20%and 10% in subsequent 3 to 5 years or so trailing for policies kept in force. If the agent fails to bring in more new cases to count toward his FYC quota, he'd be asked to leave and lose whatever that has been earned by him but not paid to him yet.

The current quota among life insurance companies should average between S$2 to 3k per month. If an agent upkeeps that quota with new cases, his income is easily around S$4 to 6k per month including trailing commission and bonuses.

The "better" agents who qualify for MDRT (million dollar round table) all average S$20,000 per month or above, since MDRT requirement is FYC of around S$100k +/- per year (depending on exchange adjustments since it's an US organisation and qualification.)

Where does this money come from? How can insurance companies afford to pay their agents so much, not uncommonly more than their senior managers and CEOs? You go figure. It comes from the clients.

Anonymous said...

Hi my name is Bella, im going to college into the field of business and i have been offered an oppurtunity as an insurance agent anyways i have to take a 10/wk training course and also when i get my license to sell insurance i start to work from home i was also told that i have to sell about 40 auto insurance and 5 mortgage insurace a month but what if i dont sell 40 and how will i get my commisions from working at home?

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