No wonder my 60+ yr old ex-clients are complaining to me that younger insurance agents are innumerate, cannot calculate or have selective deafness.
All along I have stressed total commission, and yet you say it is "utter nonsense" to earn $2000 to $5000+ commission for an insurance product.
Then now you say about finding customers who can pay $2000 to $5000 a month in premiums.
Yen-neh, you don't need to find someone who is willing to pay $5000 a month in order to earn $5000 commission!
I give you an example:
20-year Limited-pay wholelife plan $200K for male customer 29 yr old.
The premium for one of the "cheaper" plan in the market is already $5200+ per year, or $450/mth if pay monthly.
What's the commission? You know, I know, the commission over 5 to 6 years is total $5700+.
Now let me ask you, is $200K sufficient for this guy? Don't know right? Have to do financial needs analysis first and consider his financial situation right?
Let me tell you, no need to analyse so much ... if he can afford to pay $450/mth for insurance, $200K is definitely insufficient coverage for his income level.
Finally what is the projected rate of returns, even for the optimistic projection? Using both financial calculator and Excel to confirm, the 40 years return of the above "better value" wholelife is a grand 3.0% per annum. FYI, the projected inflation going forward will be around 3.5%pa. Therefore if you think wholelife is a good savings vehicle, you are actually standing a very high chance of losing out to even inflation.
So you think par insurance products are good deal and not CON jobs?? Even when provide insufficient coverage and the cash values cannot even barely beat inflation rate?!?
2 Rules Of Thumb here: LIA advises adequate coverage of 10X your annual income especially if you have dependants. Secondly, you should NOT spend more than 5 PERCENT of your take home pay to buy that 10X insurance cover.
How right? Impossible right?!? Let me tell you if you can do the above 2 things for your clients, then you are not CONNING them. And I can tell you that customer can cover for $500K with less than $50 a month. Therefore average Joe can more than adequately cover himself as you put it -- most only can afford "$100-200 per month".
http://tankinlian.blogspot.sg/2010/04/experience-of-insurance-agent.html
the comments section jin juicy
so much insights into agents' "strategies"
lol