Insurance is an essential part of financial planning into achieving our eventual financial freedom. If I were to quote this saying – “Sex is like air, it’s not important unless you are not getting any” and apply it to insurance, it would not be too far off. Why? Insurance is NOT important unless one of these events happen – death, total permanent disability, critical illness or hospitalization. We know we need to get it at the cheapest cost but the process of getting the right amount of coverage is not only a uphill task, but could be a nightmare as well.
A lot of people faced the problem of don’t understanding what insurance they have, don’t know if they have enough and are naive to the fact that they have been paying an arm and a leg in their insurance premium.
The worst is when emotion is involved in buying an insurance premium, instead of own personal needs. What I mean by that is getting an insurance policy just solely because we are supporting a relative, a friend or a colleague who’s in this business.
But that’s not agent’s fault – I was not from any insurance agency but people who were admitted that agency train their agents to focus on the selling technique instead of identifying clients’ needs. It has been accepted as the norm, but really good, ethical agents know that the only way to keep customers for long term is to adopt a need-based selling that can only be accomplished by understanding clients. The regulators know the weaknesses in how things have been done for so many years. Therefore, they implemented a lot of additional measures requiring product providers to disclose more information to buyers in the quotation. Another example is the Customer Fact Find Sheet which is now compulsory with every new application, as compared when I first bought my policy back in 2007. In short, more transparency to keep customers informed.
Speaking of this, I wish to quote 2 industry experts in independent financial advisory – Yap Ming Hui and Ng Chee Yong. Both are form insurance agency before giving up everything and starting over, same like Fin Freedom CEO whom I interviewed. See their experience in the insurance industry – how they disagree with what their agency leaders told them on how agency business is being conducted – which is on the gray area of ethical selling. You got to listen to it to see their exact comments published in a book and the FPAM journal – in this video below. Skip to time 11 minutes onwards for the best part.
Of course, I believe there are ethical agents doing honest business out there, but because of certain bad apples in the industry, it spoils the industry as a whole. Like they say – a bad apple spoils the barrel.
Consumers like you and I are getting smarter nowadays. The old way of “part bluff part sell” as what was told to Ng Chee Yong by his previous agency manager won’t work so well going forward.
The latter part of this monologue talks about the start reality of the unpleasant feelings agents have towards the small numbers of financial advisers in the market. Why? If you haven’t able to guess you already, financial advisers are generally more adept in understanding the client’s needs, analyze the gap and then fill this gap with the most suitable solutions out there. Agents can do the first two, but are helpless when it comes to the last step. But let’s face it, its the thing you should do as a smart consumer making an informed buying decision.
And last, if you are an engineer or a professional watching this till the end – I got a message for you. I’ve been through a critical stage to bring you this message.