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What Does It Mean When You Say No To Insurance

Have you ever wondered what does it mean to you when you decide to say No to a Financial Planner, who is doing up a financial needs analysis and at the same time recommending some insurance plans to you?

The Role Of A Financial Planner

Basically the role of a Financial Planner is to make you realize or indirectly disturb you emotionally with a Problem (concern about Medical Bills, not enough for Retirement or the means to save enough for your Child’s University Education) through a Financial Needs Analysis Process.

And after doing so, he will recommend a set of solutions to the above problems by means of  committing to a certain range of Insurance Product – Endowment, Investment-Linked Plans, Medical Insurance and/or Critical Illness Insurance.

The objective of this post is not to tell you much about what a Financial Planner does for a living and here I will assume that the Financial Planner who may be attending to you is capable of doing what he/she is required to do in Financial Planning.

But rather, I will focus on, if the Financial Planner has actually done well (to make you realize that you have a problem) but in the end you decide to say one of the Few Common Nos’ (known as Objections to us) like:

  • I Do Not Need Insurance
  • I Have No Extra Money For Insurance
  • I Would Like To Wait

So let’s get down to the first No…

No to Life Insurance!

What Does It Mean To You When You Say That You Do Not Need The Insurance…

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Are You Reading Or Hearing Your Guarantees?

If you are a person who are into fixed deposit offered by financial institutions or into those kind of single premium savings plan offered by insurance companies, I do have a question to ask you and that is

“Are you the kind who read your Benefit Illustration carefully especially on the Guaranteed and Projected Returns or just those who hear out from the Planner and make a purchase from there?”

The danger is here, if you are sold by the Planner based on the verbal recommendations that the plan is a Guaranteed one and in no way that it’s stated in the Proposal or Benefit Illustration. After you have signed it and at end of the term, the plan does not performed as what the Planner has stated, you will hold your own responsibilities and you have no one – even the Planner to blame for.

A Real Life Case Scenario Of Verbal Recommendation

I happen to come across this very simple couple who are having their Five Year Single Premium Endowment Plan maturing soon and would like to have a recommendation on a similar type of Plan as offered by my company.

They happened to see an advertisement in one of the roadshows that features a higher return as compared to the one that they had and would like a further clarification on it.

They were very happy with the maturity returns and with the plan that they once had. But upon seeing that advertisement from my company, they were tempted to make a comparison…

I shared with them that our Plan is similar to the plan that they once had. I printed out the benefit illustration, and explained that at the end of the term, they will have the Guaranteed Return, and the final value will be based between a projected return based on a 3.75% return of investment and another based on a 5.25% return of investment.

Is The Return From Your Single Premium Plan Really Guaranteed?

Then The Debate Of Discussion Started…

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It’s Either You Understand ILPs Or You Don’t

Do you know what’s Investment-Linked Plans (ILPs)?

Whatever the case is, this plan can either help you to make your money work real hard and make you smile or totally dry up your money (suffer a loss) and leave you cursing (at the company or the Planner).

I am writing this post with great disheartening that there are many Planners who are still selling this plan to Clients who are:

  • totally non-risk takers (risk averse)
  • short term savers
  • ignorant of the sale charges of the plan and the advisory fees (commission)
  • thinking that this kind of plan is a pure Savings plan and the funds that they put in (monthly or lump sum) are 100% capital guaranteed which means that they will still get back their sum invested if no bonuses are given or the funds are not performing at all!
Do You Know What You Are Investing?
So Do You Know Really What You Are Investing?

My Chat With A Client Who Cried

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