A life insurance policy can be a good investment, if it gives a yield of at least 4% per annum in today's climate. This is possible if the policy has low expenses for marketing and administration, and is invested to earn an attractive yield for the long term, in a diversified fund. This type of structure can pay an adequate commission to the agent, and give a modest profit to the insurance company, and still give good value to consumers.
There are too many products that offer a poor deal to consumers, and continue to perpetuate high charges. Consumers should learn how to tell the difference and make the right choice. If more consumers are aware about it, there will be pressure on the insurance companies to design and market the right and fair products.
You can attend the FISCA talk on "Consumer Guide to Life Insurance" on 25 August. Do spend $30 and 3 hours and save yourself a lot of headache in the future. If it is already too late for you, you can tell your children and younger colleagues to attend, so that they can avoid a costly mistake.
http://easyapps.sg/assn/Org/Staff1/Event.aspx
4 comments:
Not only 4% but breakeven at the 7th year and attain a return 4% after 14 years. This is very fair.
This is easily done. Reduce all the costs, from distribution cost to the operation cost like paying the senior management obscene salaries.
Example: Reduce the agents' commission by 60% and the remaining to be paid over 6 years for wholelife at 10% per year so that agents would not think of hit and run and give sloppy shoddy advice with self interest.
The objective is to prevent the fly by night agents; people who are not serious about the career but joined because they were retrenched or waiting for another job and just trying; the salesmen whose only interest and skill is to get rich quick and of course the dishonest and incompetent agents.
Remember, the objective of the industry's existence is to help the consumers plan their finances and meet their life goals and NOT to enrich greedy salesmen and companies manipulated by CEOs for their own gain.
MAS must surely know that is the purpose of this industry. It is NOT to help greedy and unethical people to qualify for MDRT or to give year end incentive trips for the agents and their CEO to frolic at overseas resorts, wine and dine with their customers' money or to help the agents live in condos and drive limited edition cars.
MAS, please stop it. If people, agents or CEOs need these incentives other than the incentives to help their clients they should join the MLM industry or the casinos. This is also not the industry for people with mediocre qualification and competence to make a living just because they have family to take care. MAS should not let these people make a living at the expense of their customers.These unqualified agents should look for job that let them earn a decent living without hurting others. For these unqualified agents it is like the drug peddlers saying , please let them push these deadly toxic products so that they can make a living to support their family.Are the greedy and incompetent agents the same as these drug pushers? If the insurance agents are peddling the toxic insurance products without care and considering the needs of their clients and just for the commission they should be eliminated.
I hope the FAIR will rid the industry of these dishonest and the unqualified and incompetent salesmen to help and protect the consumers.
Disgusted Observer
The original objective of the ntuc cooperatives was to provide affordable low cost insurance to the workers. Now the original intent is gone. It is now an enterprise, a social enterprise, a business vehicle to milk the man in the streets to enrich the salesmen and senior management. It can have noble high sounding slogans and taglines but nothing says more than the actions, the products and the approach to the man in the streets needs.Do the company and the salesmen add value to the customers?
Do they ???
All business have connections.
When Resident's Committee hold block parties, who is the vendor to supply buffet food, sound system etc?
When community centres hold edusave award ceremonies, who is the vendor for drinks & food?
When INCOME hold road shows at shopping malls, who is the vendor to supply banners, service counters or brochure dispensers?
Profit before people should be the slogan of NTUC Income because they are made different from the cooperative during TKL's time. Look at the product pushing financial consultants insulting the consultants at the roadshow
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