Much has been said about the benefits of term insurance.
However, even though I’m a proponent of term insurance, I find it hard to buy term insurance.
Why?
I’ll explain in a moment.
Meanwhile, did you read the recent Sunday Times article that was sort of promoting term insurance?
It’s a good article (read it here if you haven’t), BUT the author completely misses the mark when she said “changing mindsets (of customers) is not easy”.
Come on. It’s the mindset of insurance agents that needs changing!
When I asked about term cover, all my agents seemed uninterested in selling these low cost products. They either talked about the downside of term insurance (no return, temporary protection, blah), or happily ignored my queries and continued marketing their investment-linked products with high projected returns.
I literally had to force my agent to sell me term insurance. Why is it so hard?
Do you think these agents genuinely care for you when they say term insurance is not as good as life or endowment policies?
Come on. 9.5 out of 10 agents care about their commissions more than anything else. The other 0.5 will learn that naivety leads to nowhere.
That’s why term policies are still not common. People who don’t do their own research won’t get such info from their commission-driven agents, and these agents won’t volunteer such info unless forced to.
And Sunday Times writers wonder why consumer mindsets are so fixated…
You don’t believe that insurance agents are reluctant to sell term policies? Want proof?
Here’s a comment on the Sunday Times article from an ex-insurance agent (link):
“I once used to be an insurance sale rep.with one of the major American ins. company.WE were told to emphasize mainly on whole life ins. policy to our clients than term ins. policy even though the latter is much cheaper and has a higher coverage.This is because,we could have earned a much higher commission for myself if we sell more of the previous.After a thorough research and analizing the difference Btw. whole-life and term life,I myself and my family members are also sold to the idea of term ins.”
Want more proof? Try asking your own agent about term cover.
If you know where to buy term insurance easily, let me know.
73 Comments
Hi Synergy,
First of all never feel obligated and believe it or not most of us actually enjoy meeting people even if they don’t buy. The reason I suggested you meet and discuss is that you will get better answers and it’s also more effective for an adviser to deal with your questions face to face. However let me try to help with a few pointers.
1. It’s good that you are looking at the more important components first. Enhanced Shield is a must if you have not already done something about it. There was a good pricing comparison in the Sunday Times a couple of weeks ago but that doesn’t tell the whole story as there is differences in coverage. I can email you that if you need it and do not have enhanced shield yet.
2. Term policies for life will cover death for any cause even by accident. Accident policies have elements of coverage that life policies do not have. You should get a accelerated TPD rider for the policy which will accelerate the payment in case of TPD. You are right that this will eat into the death benefit which you are keeping for your parents.
2. For Critical Illness there are two types riders that are available thou it will vary with different companies. If you buy the accelerated rider it will eat into e life policy payout. If you buy an additional rider it will cost more but wil leave the death benefit payout untouched. Prudential had such a policy. Personally I am not sure about the cost structure of e NTUC term policy and if the riders are additional or accelerated.
3. In order to get pricing details you might have to check with a couple of people to get the numbers. Tied agents and I am one will not have access to other insurers costs. The Independent Financial Advisers also do not have access to sell any policy they want as the large insurance companies do restrict what they sell through the IFA’s.
4. Dressing Term coverage is quite unusual in this market and typically only used for mortgage insurance policies.
I understand our products inside out and a fair bit of other insurers products as well. We are ranked no 1 in many market segments however no insurer will be the cheapest in all categories and cheapest doesn’t mean the best either. Where I feel there are better options for my clients I work with friends in other companies or IFA’s I know well to check Om options out side what I can provide.
The offer to chat over a coffee stands as I am sure I can provide a bettererective face to face but no obligation and no pressure.
I hope this was helpful.
A slight mistake in item 4. I meant decreasing term not dressing term 🙂
Cheers
Hi Synergy,
Took a quick look at the LUV plan and this is what I can gather from the limited information provided online.
1. It is structured in a way so that you dont have to decide on the term up front. This can be a good thing and be more flexible. However the premium are not guaranteed and do increase with age bands.
2. It is not clear if the critical illness cover is additional or accelerated. I personally prefer additional. That’s am important question to ask.
Cheers
Synergy,
I agree with what GST mentioned on that you do not have to feel obligated, you can always walk away from a sale when you find the meeting not beneficial for you. End of the day you still have to meet up with someone from the insurer to buy the policy. It is also not fair to your parents when they do not know who to look for when there is a claim. A good servicing financial adviser will make a difference in the ease of the claim.
The Luv plan can cover critical illness and it is accelerated. It is cheaper if you are a Safra member. Since you don’t like to meet up with people, just sign up as a Safra member and purchase online thru Safra. No need to meet up with anyone and it is a very simple process if you do not have any medical condition at the moment.
Hi GS and Cheng,
Really thanks both of you for the valuable info! I didnt know about accelerated and additional benefits until both of you mentioned.. I actually have friends who work as financial planners but dont think I can “absorb” much info from them compared to thru forums here. hahaa.. But will definitely consider to speak to an advisor before I commit to any policy. Before that, let me do more research first to know about the options available in the market.
Cheng: After reading thru the T&Cs in the NTUC LUV policy, I realise that it is meant for family with children as dependents so probably I will not be eligible to buy. 🙁
GS: I read somewhere that additional CI as rider usually covers for a term only and have a survival period (e.g 30 days). That means I must survive thru the 30 days upon diagnosis of a CI before I can claim the CI benefits? And if I die before that, I cant claim. Am I right? If thats the case, the additional premiums that I paid for the CI coverage will be wasted?!!
Whereas for accelerated CI, it does not have survival period and will cover thruout the term together with TPD/death. For some policies, we are allowed to claim CI as partial payout and the remaining benefit will be kept for TPD/death. Is my understanding right?
Dear GS
Ok, I will take your advice into consideration. You are really helpful! Thank you so much.. =)