Saturday, November 24, 2007

Insurance = Peace of Mind?

I believe it is a norm for people to get themselves insurance nowadays. It is a necessity for most of us. We buy travel insurance before going on a vacation, home insurance for a new house and car insurance is a must for all vehicles on the road in Malaysia.

of us would come across insurance agents peddling their products sooner or later. While getting insurance cover for oneself is important, one must be wary of the unscrupulous agents whose sole objective is to make maximum profits from each deal.

Let me tell you my personal experience:

I bought my first policy upon getting my first paycheck. The agent was my friend from the university, a Mechanical Engineer by qualification, but a full time insurance agent. He was recruited by an insurance company during his undergraduate days.

As I were a trusting sort those days, I left it to my agent to draw up a plan for me. I signed up my first policy without even knowing what I've got. All I knew was that I'm protected. And if I have any questions, I could just contact the agent (who was also my friend).

Come the second year, the agent did a review on my policy, got to know about the salary increment I've gotten, and before the month is up, I've gotten another policy - an investment-linked product. This was a popular product then. I remember my agent telling me people were literally getting into line to sign up for this product, and that getting this cover was absolutely the right thing to do. Similar to policy no. 1, I did not know what this policy covers.

Another year down the road, another review came. This time, I was advised to increase the coverage of policy no. 2. Needless to say, I put my signature on the necessary forms and started contributing more per month.

Now, seven years after getting my first insurance policy, I heard rumors that investment-linked products are being canceled by policy holders on a massive scale - word from the grapevine is that something is wrong with these products, the policy may shutdown after a certain period of time.

Upon hearing these rumors, I immediately contacted my agent. To my utter disappointment, things went downhill from here. My agent finally revealed his true colors - he was rude, and not helpful at all. I was told to contact customer support to get answers to my queries. Actually, the subsequent exchanges between myself and the agent over the next few days were quite dramatic - fit for the script of a television series. But, I won't put the details here.

I was convinced that something is wrong. Therefore, I got my policies reviewed by several insurance agents from other insurance companies. It was then that I discovered no insurance agent would tell me the full story. No one would paint me the full picture. I have to take bits and pieces revealed by the agents and piece them all together myself. In the end, I knew all I needed to know, and more. The concept of insurance is no longer a mystery to me. I am familiar with the various insurance products available in the market. I've turned into every insurance agents' nightmare.

Looking at my policy, I've discovered that I've contributed quite a substantial amount as commission fees to my agent. It would seems every top-up I've made contributed to his well being (each top-up would contribute to him for six years).

I've also determined that the possibility of my investment-linked policy shutting down in the future does indeed carry merit. As it would be illogical for me to cancel it, I've devised a method to monitor the status of this policy. It would alert me if the policy is in danger of running out of funds.

In the end, I'm glad I've discovered and corrected my shortcomings as an insurance policy holder. I'm aware of my personal insurance requirement, and I could determine the insurance needs of my love ones. In matters of insurance, I would not be led by the nose any longer. Also, I've changed insurance agent. However, the agent's role is very limited now - he is only my specialized courier.

Peace of mind? Now, it is ...........

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