In an insurance company, every product sold has a different profit margin.
For example, one product can make a profit of $10, while another product can make a profit of $20, even though the premium you pay for both products is the same.
To roughly know how much profit is earned by an insurance company, you can find it in a document known as the "Benefit Illustration" (this can be requested from your agent without taking up the policy). Inside, you need to look for a table known as the "Distribution Cost" table. It will show all the accumulative premium that you have paid on a yearly basis and how much of it goes into the agents' pocket, administrative costs and etc.
Every insurance company remunerates their agents a different commission for a different product. And as long as humans are greedy by nature, you will always come across a greedy agent more often than not, unless he/she is not human. But I have to reiterate that there are some good agents around that are
not as greedy. The
problem is they are very rare.
So the problem is not with the agents, but with the system. Human's greed cannot be changed but the incentive system can be changed from a commission system to one that is fee based. Unfortunately, this has not taken place although there are discussions about it.
But your insurance needs cannot wait, and you need to either rely on yourself, or find a good agent. Self-reliance is the best because you can't cheat yourself. But the drawback is that you have to sacrifice a lot of time to do research.
A good agent can save you hundreds of hours of research time.
A good agent will always share all their knowledge with you, and let you make an informed decision. A bad agent will just share with you his high commission suite of products.
An agent can only financially survive solely through selling insurance in two ways:
1) Sell a few lousy products (usually high commission)
2) Sell many good products (usually low commission, and sometimes really peanuts)
But you shouldn't feel obliged to buy a lousy product from him/her just to reward them out of sympathy. If they have provided a wonderful service to you, the best thing you can do is to reward the agent by introducing your friends/relatives to them.
This would create a win-win situation for both your friend/relative and the good agent.
I'm glad to have met one, and the amount of knowledge that this agent has shared with me, is worth more than all the commissions he has ever earned from me. But of course, I have rewarded this agent with some of my most trusted contacts.
The knowledge they will share with you, by itself, will already save you hundreds of hours of research. And some of this knowledge only comes from real life experience of an agent who has gone through years of applications and claims.
These are truely the ultimate agents.
I hope you will find such an agent, but if you haven't had the luck, I can link you up with my agent.
I will not divulge my agent's contact number here, because of spam or nuisance calls. You can drop me a message below and I will forward your email to my agent. You can communicate through email first and exchange contacts later on.
