This is true! There are people who simply just hate insurance (except for car insurance because this is made compulsory). And for these people, no matter how much you persuade, how many articles, how many real life incidents you can share to showcase the importance of getting insurance… they are just not interested!
I have personally came across some of them and through a few series of conversations, I have managed to compile a few suggestions on why they hate insurance… I will also be giving some of my opinions on how to resolve this hatred.
Reason #1: I Can’t Claim Anything From The Insurance Plans That I Have Bought
This is one top reason why people just hate insurance, they pay and pay for so many years of premium, and till one fine day that they can make a claim, it’s either that their claim is invalid or being rejected.
Reason #2: I Lost Money Because Of My Insurance Plans
This is very typical especially for Investment-Linked Plans and Term Insurance. This is also typical for any early withdrawal/surrender of insurance plans (e.g. whole life insurance, endowment plans).
Reason #3: I Buy So Much Insurance Plans Yet Nobody Is There To Take Care Of Them
Because of the high turnover rate in the insurance industry, the chances of people having their insurance plans become “orphaned” literally became higher as well.
That’s why when there’s some form of urgency, they can only depend on themselves and do not know what they can do next. And the two reasons above will apply as well.
*If you have other personal reasons for you to hate insurance, I hope you will share it with me with your comments below.
Personal Opinion To Reason #1
There is a lot of misconceptions that once an insurance plan is purchased, almost “any incidence in the world” can be claimable. This is not the case because any claims made will naturally fall against the Schedule Of Benefits of your contract with the Insurance Company.
This means that as long as your claim meets the definition stated in the contract, by default, that claim should be valid unless there’s a good reason to justify against it.
And to prevent yourself from facing such scenarios, you have the rights to request for your Financial Planner to explain the terms and conditions, exclusions and benefits of your insurance plan. You can ask questions like:
- what (benefits) are you covered against and ask for the scenarios that you can make a claim against
- what are the exclusions of the plan, or any waiting period before a claim can be made
- past medical conditions? ask if that will have an impact. Unsure? Request for it to be documented in the application and let the underwriter decides the outcome.
Personal Opinion To Reason #2
There is a reason why Insurance Companies state a clause (or rather a reminder) in their contract that buying life insurance is for a long term basis. Any early surrender may result in possible losses.
And to prevent yourself from such cases, here’s a few pointers for you to take note:
- For Endowment, Whole Life Insurance Plans – it’s almost for sure that you will lose money in the early stage (first 5-10years) of the plan. That’s why it’s good for you to ask when is the breakeven point of your plans. Breakeven point is the point where the Surrender Cash Value and the Total Premiums you have paid to date is the same.
- For Investment-Linked Plans, because of the fees and charges involved, it’s not that possible to breakeven in the early stage. Similarly, if you are noticing that your investment portfolio is not making much positive note over the years, ask your Financial Planner on his opinions and what else can be done.
- For Term Insurance, confirm with your Financial Planner, if what you have gotten is a Term Insurance. If it is, I would say 100% of the time, you will lose money (but benefited from a peace of mind) if there’s no claim at the end of the Policy Term (unless the Term Insurance has this special clause of returning 100% of your total premiums paid, unsure? please ask).
Personal Opinion To Reason #3
Financial Planners, as much as we can love the nature of this job, this is still some kind of a sales based job/career where one has a sales quota to meet. One can provide such a wonderful sales after service but at the end of the year, unable to meet the sales target, will still be asked to leave to search for a greener pasture.
So if you do not wish for your insurance policies to be “orphaned”, here’s how you can protect yourself:
- have a Master List that states what you are being covered in the simplest term that you can understand.
- understand what does the annual policy statement mean. The figures stated in the statement will reflect your latest coverage and benefits.
- have the helpdesk contacts of your insurance companies with you. In this manner, you are never lost and you will know that help or advice is just a phone call or an email away.
- if your current Financial Planner is gone yesterday, you can always request for another one to replace. And yes, you do have some rights to choose the one that is suitable. You would definitely want someone that understand you and be of ready help when necessary
- if your relationship with your Financial Planner is good, it would also be good to recommend his services to your friends and families. This will ensure that your Financial Planner gets to stay around to provide his services. Do not be afraid that you will be neglected after that. This will never happen!
With these three of my personal opinions, I hope it will resolve and change your mind against hating insurance (if you are one of them reading this now). Even if you do not hate insurance, these can help to create a better understanding for you and your current insurance plans. And even foster a better working relationship with your Financial Planner!
*image courtesy of sxc.hu