Alex turned on the ignition to his car and thought of what to eat after a long hard day at work.
Too lazy to cook, he decided to go to the convenience mart at the petrol station to grab some instant food. He got home and made a cuppa coffee off his coffee-maker while the washing machine-dryer took care of his office clothes.
Then he opened his letters and found a hefty credit card bill staring at him.
In our fast-paced society, it seems that time is a scarce commodity. Hence, we start to value convenience ever more in our bid to save more time.
We drive or take cab to reduce travelling time; we have machines to help out on household chores.
Fast-food become a way of life too as we can eat quickly and get on with our life.
Little did we realize that there is a price to pay for convenience.
Most of the time, you have to pay more for it – the same item will cost more in that shop at the void deck in comparison to the supermarket 2km away.
You may also have to compromise your standards to accept convenience. That coffee at the kopitiam is mediocre but you will accept it since there is no way you are taking a bus to have a cup of Joe.
Having to pay more or to compromise is bad but just not the worst yet.
There are long term consequences to making the convenient choice all the time.
Eating fast food or instant noodle daily and constantly taking relief medicine instead of resolving the root cause of your ailments are potential permanent side-effects of taking the easy and fast way out every single time.
That’s not me, you may think.
“I know what are the cost of convenience and also prioritize health over convenience”
Unfortunately it is not the last negative traits of convenience.
In 2014, two researchers Pam Mueller and Daniel Oppenheimer, of Princeton University and UCLA, did a study on the learning methods of the students. Half the students were instructed to attend lessons and take notes via their laptop. The other half were using pen-and-paper method.
All the pupils were asked to take a test after the lesson.
It turned out the pen-and-paper method students fared better.
Why is this so ?
Without a doubt, the laptops are far superior in note-taking. However, the traditional note-taker must comprehend the lesson, think of a way to summarize and write it down quickly.
By not having the convenience, the pen-and-paper students were forced to think and form solutions on their own.
Basically, the laptop users were going on an auto-pilot mode.
Well well, you are onto something eh ?
Spit it out !
One of the greatest conveniences in our society is to have someone complete a menial task for us ?
Not wanting to supervise the home renovation ? Hire an Interior Designer.
Lazy to wash the car ? Pay a Bangladeshi foreign worker to clean that up.
Don’t know about insurance ? Get an agent on the line !
Wait. the last one is indeed convenient but does it cost you too much ?
Let us go through the price of convenience of having an insurance advisor to do all your financial planning for you
First, a typical insurance commission ranges from 15% to 50% of the first year premium, depending on which policy genre.
It reduces gradually over the next few years.
An average individual in Singapore spends $2,447 on insurance premium in 2014.
If we ballpark commission at 30%, you are paying $734 for having an agent to advise you.
You are the best person to decide if that is worthwhile.
Next, you may have to compromise on what you want.
The advisor can be a Independent Financial Advisor but you may have a product that you wish to buy from a insurer that he/she is not affiliated to.
Hence, you might have to give up a superior plan in that event.
Lastly and what we view as most damaging is that you may simply turn off your mind to your own financial planning.
If you have a very capable advisor (we know some if you need one), you may depend on them so much so that you know zilch about the insurance plans you have.
When the advisor exits the company or industry, you shall be at a loss on what to do next as you have been auto-piloting for the longest time.
Similarly with daily conveniences, you have to weigh the pros and cons before deciding if it is worthwhile to go for an advisor a not.
We just think it should not be a brainless automated process to go for convenience all the time without realising the true price of it.
Like Alex in the fore-mentioned story, please do not allow the cost of convenience hit you hard without knowing before-hand.
Last of all, we thank you for reading all these.
It must have been inconvenient but hopefully also a thought-invoking reading experience for you.
www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.