5 Things a decent Insurance Agent would never say

Posted 4 December, 2015 by Clearly
in Pitfalls to Avoid

 

Life is such a conundrum of choices.

 

suspicious-fry

My face when choosing confronted with a decision

 

Which career should I embark on?

What car should I buy?

How do I know which avocado is ripe?

How do I know if an insurance agent is right for me?

While we may not have a clue about the first 4 questions (heard that avocados should be brown, but not too brown), we are certainly in a position to help filter out the good agents from the shady ones.

A good agent has plenty of traits which may not be immediately apparent (like having genuine concern about your financial well-being), but a shady one is far easier to spot.

To help you filter out the good agents from the bad, here are 5 things that decent Insurance agents would never say.

 

1. “You can never have too much Life Insurance”

 

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This makes it your 347th policy, why not make it an even 400?

 

Newsflash: Yes, you can be over-insured. More specifically, you can overspend on insurance.

Every agent will state emphatically that Life Insurance is crucial – and we agree fully. However the trick here is to balance it out with the other demands of Life which are equally crucial like food, housing, and leisure (its about a well balanced lifestyle).

A decent insurance agent would always consider how much you are already paying for the current premiums – and then make a recommendation which takes that into account. A rule of thumb when it comes to insurance expenditure: 10 – 25% of monthly income is plenty, any more than that is excessive and will come back to bite you. An extreme case of insurance purchase can be found here.

 

2. “Payment? Just go ahead to write a cheque addressed to me”

 

signing-a-check

ABC Pte Ltd? Its too hard to spell, try Adam instead. That’s A-D-A-M C-R-O-O-K

 

A big no no. Every agent is merely representing his company, and all payments for policies should be made out to the company only. Be on extra high alert when your agent proposes that a cheque be made out to his name – they are not supposed to be holding on to client monies.

What about payment via cash? That is supposed to be accompanied with a receipt issued from the company (not the agent). We say that there is still a propensity for fraud when it comes to cash so many decent agents would prefer to collect the premiums via credit card or cheque made out to the company.

Both such payments ensure the possibility of fraud are kept to a minimum.

 

3. “Sign up for this policy now to get this slow cooker/hot pot/shopping voucher before the promotion is over.”

 

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Beef Stew: Hardly worth buying a new policy for

 

The old “While stocks last” trick – and designed to work because humans have an inner aversion to scarcity, and Singaporeans in particular love a good deal. On the surface, this seems to make sense – we need insurance, and there is a great promotion going on. Might as well strike while the iron is hot, right?

Here is where the good agents distinguish themselves from the greedy ones. Good agents know that insurance is about commitment and responsibility, and it is a decision not to be taken lightly, and certainly worth than just a piece of cooking equipment.

For sure, the deals and promotions are meant to nudge people to take action, but every agent worth his salt will understand the benefit of a well bought policy outlasts (and heavily outweighs) any freebie associated with the deal.

 

4. “Surrender this policy of yours, what I have to offer is a lot better.”

 

Surrender

Only the vanquished will surrender their policies

 

This would be the grand daddy of red flags. Surrendering a policy means to stop paying premiums on an existing policy that you own, often times in order to buy another one instead. In fact, it is illegal when done without proper justification, and our good friends at MAS call this churning.

Why is this so insidious? Most of the time (I would say 99 times out of 100) it is to the overall detriment of someone to stop a policy before its due, just to take out a new one. This is because all the previous benefits accrued with the policy will be lost, and then the benefits associated with the newer policy will take time to re-accrue. This is especially accurate with it involves Whole Life or Endowment plans.

The only reason that an agent would ask you to surrender a plan is because he places his commission before his mission (to help others). Run far, far, away when that happens.

 

5. “Its OK, we need not indicate this on the proposal form. No one will ever know.”

 

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Do the words “Wilful Omission” mean anything to you?

 

Perhaps you are a social smoker, sneaking in a stick every now and then. Your agent informs you that non-smokers usually enjoy lower premiums, and suggest that you take advantage by conveniently “omitting” that fact on the proposal form. Heck, its almost true anyway and no one will be any the wiser.

Hate to break your bubble, but instead of looking out for your best interests, your agent is helping to commit fraud. Adverse selection is a very real problem in the industry, and a good agent knows the value of honesty when it comes to insurance application – the truth should always be reported, because this forms the firm basis on which the company can accept the application, and make the payout when necessary.

Here is a cautionary tale of a woman who recently nearly couldn’t claim her dues because of one such “omission”.

Honesty is always the policy. Choose your agents by the same principle and you won’t go wrong.

 

Do you know of any other things that a decent agent would never say? Share them with us in the comments below!

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.

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