I used to be a fulltime life insurance agent. As a previous insider, I would like to share some insights with you. I guess some insurance agents might be offended by what I am going to tell you.
Do you know that the “best product” for agents to sell is the savings plans?Ironically, the “worst product” for customers to buy is also the savings plan.
Here is why:
- Savings plan has a higher commission because the premium is generally higher than other plans
- There is almost zero servicing required for savings plan — no hospitalisation claim, no answering a bunch of questions related to investment-linked riders that are confusing.
- Customers love this kind of policy because they thought that they would get back their money in the end, plus some excellent return!
All the above make it much more profitable to market a savings plan compared to other types of policies.
It is common for life insurance agents to promote savings plan to the public as a viable vehicle to fund one’s lifestyle after retirement. Occasionally, the savings plans are often branded as ‘retirement funds’.
So, would you ‘invest’ your money into a savings plan?
In the following training video, I disclosed some facts agents wouldn’t want you to know. You will be informed about:
- How agents mislead clients with their ‘flawless’ presentation
- How to dissect information in a quotation of a savings plan
- How to calculate the actual effective rate of return of a savings plan
So you can finally be an informed customer. Once and for all, you can decide wisely whether you should invest your money through these plans.
- Complete the relevant exercise in the PWM Personal Finance Workbook
- Analyse your existing savings plan if you have any