Monday, September 6, 2010

Beware of this Insurance Agent

There are many insurance agents that we ought to be afraid of. After all, the typical insurance agent has a glib tongue that can probably out talk most of us. But the worst kind of insurance agent isn't the talkative one. It is the one who masquerades as a financial planner and yet is always trying to get client's to cancel their old policies to buy a new policy from them.

This is an especially common situation in Singapore where insurance agents change companies the way they change shoes. Because of buyout clauses, failure to hit sales quota, or some other kind of reason, insurance agents often change from one company to another over the years. This is nothing common and we should not blame them. After all, who really sticks with one company for more than 5 years in today's job market? Where people are encouraged to gain as much job experience in as wide a variety of roles possible, it is not surprising that people change companies.

But what happens when an insurance agent changes to another insurance company is probably the worst thing that can happen to his clients. It might be better if the insurance agent had left the industry altogether. For the insurance agent who changes company will soon try to convince his existing clients to switch over their policies to his new company. It is not a new trick. It is an old trick that has happened time and time again.

True. There are instances when an apple to apple comparison is done, the consumer can clearly see the benefits of a certain policy over another policy. However, the worst kind of comparison is the kind that tries to compare an apple to an egg. With this kind of insurance agent, one must beware.

This insurance agent will take a whole life policy and compare it with an ILP. And from there he will show you all the benefits the ILP has over your whole life policy.

If you have an ILP, he will take a term insurance and compare it to your ILP!!

If you have a term insurance, he will take an ILP or Whole life policy and show you the benefits of it over your term insurance!!!!!

With this kind of apple to egg comparison, it is impossible to refuse the "benefits" that are proposed by the agent.

Rule of thumb: Always do an apple to apple comparison. When you try to compare an apple to egg, it is impossible.

Don't say you have not been warned.

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