Tan Kin Lian's Blog: Potential danger of joining an insurance company

Thursday, December 02, 2010

Potential danger of joining an insurance company

The wife of an ex-insurance agent shares the unhappy experience faced by her and her husband who quit his job to join an insurance company. She explains some of the unethical practices that the husband had to practice to meet the sales quota. She is glad that he has given up the insurance job and had returned to an ordinary job.

Ask Mr. Tan

10 comments:

Unknown said...: Possible to share the details?
Thank you.

Regards,
www.sgwebreviews.blogspot.com; December 02, 2010 2:36 PM
Anonymous said...: It is true that the sales manager is only keen on fulfilling the sales quotas and can even encourage the agents to be unethnical in his approach to the clients.; December 02, 2010 2:56 PM
zhummmeng said...: I am not surprised . Either you get caught up with the unethical practices to make money, to qualify for incentive trips or being forced into doing unethical things to meet quota or to meet requirement by your superior.
I heard from a friend from one local social enterprise company that their sales 'champions' became overnight or suddenly transformed into ILP investment experts when ILP sale production was made a condition to qualifying for the overseas incentive trip. From a fearfool to an expert is a mind set change and if it is NOT accompanied by skill and knowledge based change it is very dangerous.It makes these sales champions very dangerous animals on the loose.Beware, consumers....you can be mauled financially..your future can devastated.
This goes to show how money and incentives can change people. Often it is at the expense of their customers.
I pity their customers. If I ever have an opportunity to review for these customers I will advise them to report these agents to MAS to have them sent to a local Changi seaside resort for a long stay with expenses all paid.
Thank goodness, her husband came to his senses, making sense of right and wrong.How can products like limited payment wholelife, limited payment endowment or anticipated endowment with cashbacks ever benefit the consumers? These sales champions if they have conscience, should know they are neither efficient nor effective as protection and saving instruments.They short change the consumers. They make their customers poorer , under insured and live their life in danger and not to the fullest as their ads misrepresent.The customers are conned into a false sense of security and peace of mind.
Have a conscience....don't con your customers...DO THE RIGHT THING and abide by section 27 of the FAA.; December 02, 2010 4:02 PM
Vincent said...: OMG, I cannot imagine that the insurance industry has now degenerated into some MLM scams. That also means that insurance agents nowadays are more than just a nuisance, they should be avoided at all cost!; December 02, 2010 4:48 PM
Spur said...: For the past 40 years, insurance has operated very much on MLM basis i.e. the agency modus operandi with manager having over-riding commissions, and commissions of agents who leave going into the pockets of the managers. In fact, the founders of MLM based their tactics on insurance industry! Similar tactics such as incentive holiday trips, posh dinners and gala seminars at 5-star hotels are both found in MLM and insurance industry.

In the past, the only insurance company which tried to minimise this MLM mentality was Ntuc. Unfortunately this totally changed in 2007 and now Ntuc is no different from any one of the other typical commercial companies. Many long-serving managers were sacked or forced to resign in 2007 and 2008, as they did not subscribe to the new "profits before people" mentality and did not meet the vastly increased API targets that the new mgmt insisted.; December 02, 2010 6:09 PM
zhummmeng said...: They don't bat an eyelid or they lie through their teeth describes people who live a double life, ie what they say and what they do don't resonate.People before profit or commission/APIs before mission? Let the people judge. If they are sincere and honest they should take a step back and do the due diligence on their products and ask whether they do help their customers to meet their financial goals or the products are pushed to benefit themselves.
I have checked their KYC and is a load of rubbish and which is designed to look compliant, colourfool but actually no standard and meant for the product peddlers.The designer or designers are not qualified.; December 02, 2010 9:51 PM
Unknown said...: In my opinion, it is always not to take extreme sides...

There are always black sheep in the industry. No need to be so bothered with them.

I do know of an insurance company that WAS practicing the BUY TERM AND INVEST THE DIFFERENCE. Because, they have only term and ILP plans only. The clientee base is not able to support the life fund. So no more participating plans.
However, this year, that company launched those participating plans again. I wonder what happened to the buy term invest the difference.

Also insurance is not like MLM.
It is the people who make it like this.
I know of a Mr Tan (not this one) who is a crook. I don't think it is fair to call all Mr Tan as crook.

As for NTUC, I think it is RIGHT for the company to remove those dead bodies. If will not be good for the policy holders to be in a company that have many long-serving managers who are taking up office spaces and resources.

I have a friend who told me that don't buy insurance, the returns are so low, bet on soccer the returns are higher!

One thing for sure, there number of competent agent out there is very very few.
And we need one to do the claim.; December 03, 2010 3:07 AM
Spur said...: Those long-serving managers were forced out of Ntuc becoz they had a conscience, and did not want to become the super dupers sales champions that the new ceo exhorted. Those managers did not believe in pushing the lousy value vivolife & revosave as 1-size-fits-all-solution that can only give customers less than inflation rate even after 30 years. Those long-serving managers do not believe in pushing products at all costs, they preferred being honest in providing good value policies and earning a modest income. Many have moved on to IFAs, trainers and staff in SCI, and are happier for it.

The new mgmt replaced the ethical managers with greedy buggers from Pru, AIA and those who sold their souls to the devil for $$$$. Policyholders are now suffering from drastically reduced bonus, and having tons of their premiums being used to pay big commissions to the new managers and their conmen/women, to pay for their Spain all-expense holiday trips, to pay for their monthly 5-star hotel dinner buffets. Unfortunately, becoz of the continued conmanship and the use of somebody else's backside skin for their face, majority of policyholders are still in coma. Hopefully they won't get heart attack after waking up from coma 10, 20 30 yrs later.

And who told you need agent to claim insurance? Your salesman trainer?; December 03, 2010 10:46 AM
zhummmeng said...: This company has shamelessly joined the other companies to plunder the consumers.
To say there are always black sheep in every industry is fair but to apply this statement to the insurance industry is an understatement. 99% of the insurance agents are NOT qualified and 80% are engaging in unethical and malpractice knowingly or unknowingly or unwittingly. This is a fact.If you are a true blue qualified financial planner , check what they do and you know what I mean. Because the number of unqualified insurance salesmen is large that it is hard to find one. it is like finding a needle in a hay stack, especially every salesman has titles like senior or executive financial consultants, wealth managers, life planner or even unaurthorised use of the title financial planner.You know 99% of them are SALESMEN AND WOMEN and some maybe even conmen and women who peddle magic stones or koyok insurance like those in Albert/Waterloo Street. So how can you not bothered.They lurk at every corner seeking out their victims because their argument is 'they have to make a living' and that leaves no choice but to rob the poor and uneducated man in the street who are weak and clueless and slow to flee from them.Like in animal kingdom, right?
MAS is the only body that can clean up with one fell swoop.I hope by 2012 MAS will ban commission from all financial products so that it is no longer lucrative to peddle whole life or endowment but products that are SUITABLE to meet the clients' needs.
MLM learned the business model from the life insurance.
LIFE INSURANCE INDUSTRY WAS OPERATING LIKE MLM WITH 8 LEVELS of compensation plan until MAS reduced it to 4 and then to 3.Check out the history.( NTUC under TKL was not) With 8 levels where got chance for consumers to earn decent return and low cost protection. Today , the best practice is because everyone from the CEO , senior managers, all the Indian chiefs, nice buildings and the agents want high commission and where to get the money to give high return to policyholders.So? the policyholders' premium has gone to sustain the high living of these people; wine and dine in posh 7 star hotels; sales meeting in high tech auditorium; incentive trips to exotic places;; gifts and gifts etc..agents need to be incentivised from time to time , if not, don't work..So you see, the agents are NOT incentivised by the concerns of their clients.
Let us hear what are the tunes or songs these salesmen will sing in the future.; December 03, 2010 10:53 AM
Vincent Sear said...: I happened to have worked with both TSC at Prudential and TKL at NTUC Income during their times there respectively. I can imagine what TSC would do when he took over NTUC Income though I was no longer there at that time.

At NTUC Income under TKL, though there were branches, the agency was centralised with supervisors (executives) and managers were appointed based on qualification and experience, and salaried with sales incentives forming very small parts of their incomes.

The agents were assigned to various branches and teams, commission paid and driven, weren't under that great pressure as those under commercial tiered agencies system, where their supervisors and managers aren't salaried by the company but rely on commission overriding for all their of their incomes. Promotion criteria to senior agent, supervisor and manager is based on sales figures alone other than qualification required by MAS.

One may ask what are the benefits of promotion if they're all unsalaried? The answer is higher commission scale, bonus scale and overriding. Once a supervisor has many high sales agents under him, his overriding can be high enough not to do sales anymore, just concentrate on recruitment.

When his team has sales figures to qualify him for promotion to manager, he can promote his better agents to supervisors and collect another layer of overriding over many sales teams and agents.; December 03, 2010 11:00 AM