Do You Know The Purpose of Insurance?
An agent from an insurance company approached me yesterday morning and asked me to help her by investing $8,000 with her. Her group manager had set a quota for all the agents to meet. So, the agents had to go out to do massive prospecting!
When there is a quota to meet, sometimes, it may cause the agents to become too aggressive in their sales, focussing on meeting the target rather than the needs of the customers. Of course, there is such a thing called Financial Needs Analysis which has to be carried out prior to recommending the plan. It does help to a certain extent.
It has been a while since I left the financial planning industry in which I have contributed nine years of my life providing financial planning and advisory services to my clients and recommending the relevant financial products to meet their financial needs. It was certainly a good industry especially the insurance sector.
Insurance has played a significant role in the financial wellbeing of many families. It helps to put food on the table when the breadwinner is gone. The basic purpose of insurance is protection. As the years go by, insurance has evolved to include the elements of savings and investment. But, I still maintain that insurance should be bought for the purpose of protection.
In my years of service, I have marketed many protection plans mainly the Term Insurance Protection Plans. These are temporary insurance. They are usually much cheaper in terms of premium. The only setback is that there is no return on premium paid if death does not occur within the period of coverage. This is the only point which is commonly used to discourage customers from buying term plans. Usually, the commissions for the agents are also much lower. However, if death does occur within the period of coverage, for the same premium paid, the family could receive up to 10 times the amount of insurance proceeds from a term plan as compared to a whole of life plan. I can see that you are clearly confused, if you have not been in this industry before!!!
The next time you need to buy an insurance plan, if you need a second opinion that is objective and unbiased, please talk to me.
When there is a quota to meet, sometimes, it may cause the agents to become too aggressive in their sales, focussing on meeting the target rather than the needs of the customers. Of course, there is such a thing called Financial Needs Analysis which has to be carried out prior to recommending the plan. It does help to a certain extent.
It has been a while since I left the financial planning industry in which I have contributed nine years of my life providing financial planning and advisory services to my clients and recommending the relevant financial products to meet their financial needs. It was certainly a good industry especially the insurance sector.
Insurance has played a significant role in the financial wellbeing of many families. It helps to put food on the table when the breadwinner is gone. The basic purpose of insurance is protection. As the years go by, insurance has evolved to include the elements of savings and investment. But, I still maintain that insurance should be bought for the purpose of protection.
In my years of service, I have marketed many protection plans mainly the Term Insurance Protection Plans. These are temporary insurance. They are usually much cheaper in terms of premium. The only setback is that there is no return on premium paid if death does not occur within the period of coverage. This is the only point which is commonly used to discourage customers from buying term plans. Usually, the commissions for the agents are also much lower. However, if death does occur within the period of coverage, for the same premium paid, the family could receive up to 10 times the amount of insurance proceeds from a term plan as compared to a whole of life plan. I can see that you are clearly confused, if you have not been in this industry before!!!
The next time you need to buy an insurance plan, if you need a second opinion that is objective and unbiased, please talk to me.
posted by Jonathan Ooi @ 18.1.06
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