Realities Of The Insurance Servicing Industry
Here is the simple truth. Being an insurance agent is ultimately a sales job. You have to pitch to plenty of strangers and face countless rejections. Imagine having to go through that while remaining cheerful and putting on a smile each day.
High Turnover Rate
As a result, the insurance servicing industry has a very high turnover rate, with many agents lasting no more than a few years.
For consumers, that is a really bad thing. The agent whom we bought an insurance policy from a few years ago may no longer be in the industry by the time you need his or her services when a claim needs to be submitted, or when you want to alter your policy to suit your current needs.
Yes, there is a succession plan in place where the immediate officers of the agents who left would take over the role of servicing their clients.
Who Do We Contact When We Need Help?
But in reality, how many of us actually read the letters our insurance providers send us to notify of such a change in our servicing agents? Most of us do not even have a clue as to who our servicing agent is after some time, since most of our premium payments are automated via our credit cards or GIRO bank transfers.
When we have a problem with our policy, some of us may not know who to contact.
Poorly Trained Agents
In addition to that, the insurance servicing industry tends to recruit a lot of college students, housewives and fresh graduates with the promise of a flexible working schedule and a good source of passive income through recurring commissions.
However, most of them would soon realise that a lot of hardwork is required to achieve that. There is a lot to be learnt for them to gain even a basic proficiency to cater to their clients’ needs.
There are a series of tests that all agents are required to sit and pass before they can legally sell insurance products. Unfortunately, the bar for someone to pass these tests in our country is not that high.
The result is a workforce of insufficiently trained agents who are selling insurance products that they might not fully understand.
Commission Optimised Product Offering
Various independent insurance agencies also have their own internal trainings and “specialisations” in product offering. Some agencies might choose to only focus on a certain combination of insurance products to optimise for commissions and efficiency.
While there is nothing explicitly wrong with that, the problem that might cause for consumers is that such agents wouldn’t be able to provide insights into the full product offering for a client who might have needs outside of their agency’s “specialty” to choose from.
There Are Good Agents Out There
Nevertheless, there are still plenty of good and committed agents out there; you’d just need to know how to identify them.
Here is a simple list of things you should look out for in a good servicing agent.
- Tailor Your Insurance Policies To Suit Your Needs
A good servicing agent should truly care about fulfilling your needs. They would try to fully understand your needs before suggesting a comprehensive suite of insurance products, rather than to try sell you what their agency is asking them to do.
- Have A Detailed Understanding Of The Products They Are Selling
They will have a detailed and deep understanding of the products they are selling and are able to explain them coherently to you.
They wouldn’t mind going through the pain of going through each policy with you and explain why each one might be useful for you. They might also suggest and point out things that you might have missed out.
- Fast & Swift After-Sale Service
The last thing you’d want when you’re hospitalised or have just been in an accident is to get stuck in the hospital due to Medical Card issues or wait forever for your claims to be reimbursed.
- Committed To The Profession For The Long Run
Lastly, you’d also want to look for someone who’s committed to the profession for the long run. Someone who would still be in the profession 5 to 10 years down the road. Usually, someone who’s a manager would be a good bet.
If you’ve decided to buy a policy from a friend who’s still studying and is only treating this as a part-time gig, you’ll probably have to be prepared to sort out the claim and policy alteration procedures by yourself in the future.
The Bare Minimum You’d Need To Know
Regardless of whether you’re able to find a good servicing agent, it would be useful for you to know the bare minimum for you to self-service your policy.
The Basic Procedures Necessary To Submit A Claim
Among the basic things that would be good for you to know includes having a vague idea of the procedure for submitting a claim.
It would be useful for you to get hold of the contact of your servicing agent’s immediate officer, the hotline of your insurance provider and the location of their administration office, where most of your claims would probably be processed.
The Coverage Of Your Insurance Policies
Whenever you sign up for an insurance policy, it would also be good for you to read up on the policy document to ensure you know what exactly is being covered by your policy.
How To Monitor & Check On Your Fund/Policy Performances
If you’ve signed up for an investment-linked policy, you might also want to find out how you can monitor and check on the performances of the funds that are linked to your policy, either from their hotline, counter or from financial magazines.
You should also know how to withdraw and deposit money into your policy without having to go through your agent.
Usually, this can be done by the policy owner over the customer service counter at the headquarters of your insurance service provider.
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DollarsAndSense Malaysia is a website that aims to help people make better financial decisions, one interesting, bite-sized article at a time. Like us on Facebook to stay in touch with our latest articles.