iamveryguailan
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Not sure if this is the correct subforum to post this thread, my intention is to raise awareness to NSFs on insurance agents approaching them. If this is not the correct subforum, please move it.
Disclaimer: I am not an agent, I am someone who feel NSFs should be more informed about such insurance purchases, especially for many since you are possibly receiving an allowance for the first time in your life.
I believe you all may have experienced it yourself - especially at MRT stations when you are wearing your Smart 4, preparing to book in/out. Insurance agents will approach you on the pretext of doing a survey, or giving out free gifts, or luring you with some promise of good returns. They will then introduce you certain "investment" plans, such as saving plans, endowments, investment linked policies. Common persuasion include telling you that you can save up for your university fees, for your retirement 40 years later, and that you can easily start from just $100 a month.
Now, I'm not saying insurance is bad. In fact, insurance is very important. The question is, what kind of insurance, and how much should the coverage be? How extensive do you need the coverage to be, and what is your budget? I am not an expert nor an agent (there are many detailed threads in Money Mind and EDMW subforums), so I won't give technical details. However, just some advice, go in with your eyes wide open, and take everything the agent says with a pinch of salt. Clarify if needed, challenge politely and tackle assumptions mentioned.
Expectedly, many agents like to tout plans that will give them high commissions, such as whole life plans, investment linked plans (ILP), endowments etc. Do not take everything at face value, such as the "promised returns". There are guaranteed and non-guaranteed portions in many investment linked insurance plans, and even then, it may take a long time before you break even on your premiums paid. A lot of people are suckered in by the "returns". Many blindly believe claims and are fueled by a fear that they are not adequately covered, that their wealth is eroded by inflation, that they do not have enough for their future or retirement.
Premiums are usually paid either on a monthly basis or on annual basis. Think long term - if you think that you need the cashflow for your post NS life (eg: studies), then it will be good not to over commit. Remember, NS allowance stops immediately after ORD. There are cases where people terminate policies as they are unable to continue paying for them, incurring major losses. So, it is very important to buy a plan that you can afford. Of course, the higher the coverage the better, but it comes at a cost. What use does a high coverage plan has when it lapsed as you cannot afford to continue paying for the premiums? A $100k plan that you can afford is much better than a $500k plan that you struggle to pay, and let is lapse eventually. You can always adjust or take up new policies after you are more financially able in future.
Think about it properly, gather the info and speak to your family, friends. Read up on the policy wordings, term and conditions and compare more quotes before committing. There are basic insurance plans that is good to have, such as term insurance, critical illness and hospitalisation plans. Many agents do not like to sell these plans as the commission is low compared to ILPs, endowments, whole life etc.
I'm not saying all agents are like that. But in any sales industry, there are always black sheeps that spoil the industry's reputation. If you have signed up for a policy but felt that it is not suitable, you have a 14-day free look period where you can cancel the plan.
At the end of the day, remember this: you are responsible for your own money and life. A fool and his money is soon parted. Take charge of this and do not get swayed easily.
TLDR: Insurance agents will approach you as an NSF, trying to induce you to sign up for plans. Insurance is important, but only you will know what you really need, based on your priorities, lifestyle etc. Do not blindly buy into plans. Seek more info, opinions fro, parents, friends, commanders if needed.
Disclaimer: I am not an agent, I am someone who feel NSFs should be more informed about such insurance purchases, especially for many since you are possibly receiving an allowance for the first time in your life.
I believe you all may have experienced it yourself - especially at MRT stations when you are wearing your Smart 4, preparing to book in/out. Insurance agents will approach you on the pretext of doing a survey, or giving out free gifts, or luring you with some promise of good returns. They will then introduce you certain "investment" plans, such as saving plans, endowments, investment linked policies. Common persuasion include telling you that you can save up for your university fees, for your retirement 40 years later, and that you can easily start from just $100 a month.
Now, I'm not saying insurance is bad. In fact, insurance is very important. The question is, what kind of insurance, and how much should the coverage be? How extensive do you need the coverage to be, and what is your budget? I am not an expert nor an agent (there are many detailed threads in Money Mind and EDMW subforums), so I won't give technical details. However, just some advice, go in with your eyes wide open, and take everything the agent says with a pinch of salt. Clarify if needed, challenge politely and tackle assumptions mentioned.
Expectedly, many agents like to tout plans that will give them high commissions, such as whole life plans, investment linked plans (ILP), endowments etc. Do not take everything at face value, such as the "promised returns". There are guaranteed and non-guaranteed portions in many investment linked insurance plans, and even then, it may take a long time before you break even on your premiums paid. A lot of people are suckered in by the "returns". Many blindly believe claims and are fueled by a fear that they are not adequately covered, that their wealth is eroded by inflation, that they do not have enough for their future or retirement.
Premiums are usually paid either on a monthly basis or on annual basis. Think long term - if you think that you need the cashflow for your post NS life (eg: studies), then it will be good not to over commit. Remember, NS allowance stops immediately after ORD. There are cases where people terminate policies as they are unable to continue paying for them, incurring major losses. So, it is very important to buy a plan that you can afford. Of course, the higher the coverage the better, but it comes at a cost. What use does a high coverage plan has when it lapsed as you cannot afford to continue paying for the premiums? A $100k plan that you can afford is much better than a $500k plan that you struggle to pay, and let is lapse eventually. You can always adjust or take up new policies after you are more financially able in future.
Think about it properly, gather the info and speak to your family, friends. Read up on the policy wordings, term and conditions and compare more quotes before committing. There are basic insurance plans that is good to have, such as term insurance, critical illness and hospitalisation plans. Many agents do not like to sell these plans as the commission is low compared to ILPs, endowments, whole life etc.
I'm not saying all agents are like that. But in any sales industry, there are always black sheeps that spoil the industry's reputation. If you have signed up for a policy but felt that it is not suitable, you have a 14-day free look period where you can cancel the plan.
At the end of the day, remember this: you are responsible for your own money and life. A fool and his money is soon parted. Take charge of this and do not get swayed easily.
TLDR: Insurance agents will approach you as an NSF, trying to induce you to sign up for plans. Insurance is important, but only you will know what you really need, based on your priorities, lifestyle etc. Do not blindly buy into plans. Seek more info, opinions fro, parents, friends, commanders if needed.
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