Being an adult is a risky business. In a family, where both parents need to work, a simple accident can blow up the financial burden that is impossible to handle alone. Therefore, you never know what the future holds, and to prepare for just such unfortunate events, a Life Insurance is a must have!
There are currently 14 Life Insurance Providers in Malaysia, according to Bank Negara. You might think, “That’s not hard, I just have to find the best out of 14!” I’m afraid it’s more complicated than that, since each one of those Insurers have more than a dozen products under their Life Insurance policies. For instance, Under the Life Protection plan of AIA Bhd, there are 9 different products e.g. for education, child birth, disabilities, etc.
So you can imagine how daunting the selection process can be. Moreover, after you choose the right one, you have to pay its monthly premiums for life. NEVER stop! So it is important that you choose the right one! It is as important as choosing a house. However, you might argue that if you’re not satisfied, then you can simply switch to another. It’s not that simple. Technically, as a customer, you can surrender your existing policy and buy a new one from a different company if you think it is better. But bear in mind that when you do, you’ll need to “reset” the commission paid to insurance agent, usually up to the first six years. This makes switching policies extremely cost ineffective. So as a rule of thumb, stick to your original plan as you age and buy new one to complement the previous ones.
So how do you compare? Well, there are lots of wrong ways to go about it, but only a few right ones. So underlined below are my three ‘Fail-Proof’ ways to get the best life insurance for you.
Method #1 Engage Several Agents
There is no ‘one size fits all’ life insurance agent out there. Life insurance agent can only represent one life insurance company. Therefore, they will always speak in favor of their own, so it makes sense to converse with many. You’d be surprised what kind of dirt they dig up on each other while you sit back and enjoy. (Hint: So you know that a professional agent won’t talk bad about the other companies)
If you’re thinking, “well, do I have to pay all of them?” Well, technically, not until you commit to their services. If you go to 14 different Agents, you get 14 different plans. Now here is the dilemma. Each insurance agent will know their own company’s product well and will try to sell it to you regardless of what YOU need.
Now you’ve got 14 different plans on hand and it’s a chaotic jumble of information. So instead, you could choose a few good companies recommended by friends and/or family. I must warn you, though, just because it fits them doesn’t mean it will fit you.
Method #2 Use comparison sites with agency affiliation
Obviously method 1 has its flaws. You can’t let the agents compare plans for you, they will look out for the best interest of their own company. Thus, an alternative way of looking at it is through the eyes of websites like Insurance Finder. All your plans and rates might be just one click away. Thus, instead of trying to find and contact 14 different agents, you can get contacted by responsive agents referred by these websites. They work with several agencies to get you all the info you need!
Method #3: Financial Adviser
I highly recommend getting yourself a Financial Adviser. It’s worth the money if you want to tailor-make your insurance policy. The problem with Method 1 & 2 is that you’re left with a pool of resources, but with no means of using it. A Financial Planner will not only give you an unbiased point of view, but also gets you the best deal!
Beware of scam artists, though. The best way to verify if your Adviser is legit is to ask to see his Financial Adviser’s License, as they are required to have one under the Insurance Act of 1996. Once you’re all set checking his/her background, you can proceed to get your consultations.
FARs can sell life insurance products from any company you choose, unlike a direct agent whose hands are tied to the company that employs them. Instead of sourcing for insurance products, like in Method 1, this will be a more holistic approach. Moreover, the FA can plan your whole road map of Financial Plan.
The bottom line is, if you truly don’t want to be stuck with a lousy plan, then you must do a lot of research. You can NEVER lean on a FAR or an Insurance agent alone! Get all your plans and information ready and then consult with whoever you like. Remember, only YOU know what will make you happy. So the more you know, the better decisions you can make.
Plus 1 Method
Speaking of wisdom, there is also a fourth more labor intensive but lucrative method. Become an Insurance agent yourself and turn the tables! All the benefits and loopholes of life insurance products will be at your disposal. You can’t go wrong. Get trained and do the PCEIA and CEILI exams, to be an agent. After gaining necessary experience, you can even enjoy lucrative commissions. If you have the patience to reap what you sow, that is. Do contact me if you are in the northern region and want to join my team.
If you are unsure and still deciding what to do, have all the insurance compared on a non-biased platform will also help you to do the trick. I hope this guide sets you on the right track.
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