4 Reasons to be Wary of Life Insurance Agents!
Life Insurance agents in India have earned a bad rep over the years – and it’s an uncomfortable truth that much of it has been well deserved. The internet is rife with horror stories of people who continue to be mis-sold insurance policies by their agents! Here are the top four reasons to think twice before dealing with a life insurance agent. If you need to plan your insurance portfolio, speak with a qualified Financial Advisor instead.
They tend to misrepresent facts
Smart word plays and mountains of jargon usually characterise the slick sales pitch of your typical life insurance agent. Often, they tend to cleverly misrepresent facts to confuse you into believing that you’re buying into a genuinely value creating product. Here’s a simple word of advice: if you have the slightest iota of doubt about what you’re buying into, don’t sign above the dotted line!
They have target based jobs
Insurance agents usually operate with little or no fixed salaries, and relatively high commissions from the product that they are selling. Besides, they are under intense pressure from their management to ‘sell at all costs’, and they resultantly end up seeking the quickest route to a sale as possible. Remember, a purported “Financial Advisor” with a sales target hanging over his head isn’t really an advisor at all; but a mere sales person of products.
Their interests are conflicted with yours
Your intent is to create long term wealth while safeguarding your family from unforeseen risks. Theirs is to sell you the product that fetches them the fattest commission. While a simple term insurance plan would work best by providing you with a high death benefit at a small cost, it would never be offered by most agents as the small ticket size would mean a much smaller income for them. Instead, they would mostly advise you to purchase low yielding endowment plans that create little value for you.
They’re not really renowned for great after sales service!
It’s an unfortunate truth that most agents view the relationship with their client as over once the sale has been made; a Harvard study conducted a few years back even corroborated this. What this effectively means is that your agent is very unlikely to assist you with important post sales events such as a lapse, reinstatement, endorsements to your policy or even claims.