Direct Purchase Insurance
Singaporeans are now able to buy simple life insurance policies directly from companies without having to through an agent, thus saving them commission. If you ask around, the agents are surprisingly, not worried that this would affect their rice bowl. This is because being in this industry, we KNOW that people WILL NOT BUY INSURANCE ON THEIR OWN. There is a saying, people often don't know what is good for them. Will there be some people who takes the free advice and then purchase the insurance on their own? sure, there will be some of these people, but not a large enough percentage to actually cause a problem. In essence, it will take someone with a certain level of financial knowledge and discipline to purchase insurance on their own.
More Regulations AGAIN
The latest regulation is the implementation of the balance scorecard, which aims to penalize agents that anyhow sell products and didn't make an effort to find out the financial situation of their clients.
I always welcome more regulations, it helps to keep the industry on its toes and maintain a high service level. Hopefully, consumers can see that the industry is slowly being revamped and the negative stigma towards the industry can be elevated.However, there will still be cases of mis-selling as there are always loopholes to be found. What is important at the end of the day is to get an adviser that places your interest over theirs.
Commission
The issue of commission seems to be secretive and taboo between clients and the agent, but in reality that is not the case. Every policy will highlight its distribution cost, that is the amount paid to the agent as commission and to the insurance company for administrative costs and underwriting. Again, if you think insurance agents can live on air and water, then i think we should stop the commission structure. Then some people will say, without thinking about the consequences, give them a regular salary ! Who will bear this cost of the regular salary? You, the consumer. Will there be incentives to promote insurance to the under-insured population? NO. Will there be more mis-selling? YES, if they are forced to hit a high enough sales quota. Ultimately, be more self-centered when you purchase a policy, think about the cost and benefits from your own perspective. Is it worth it for me to spend x amount of money to receive x amount of benefits.
"I buy this fishing pole for $100 because it can allow me to fish for food whenever i want"
NOT
"I don't want to buy this fishing pole because the store owner will make $25 from me and I can use this $25 to buy fish for myself for this month"
