The 10 Untold
Facts on Your Insurance Plan
Go to, Index, Page
1, Page 2, Page 3, Page
4, Page 5
1. You could
be over-insured.
2. You could still be under-insured at the same time.
3. You could pay less commission and make your insurance agent work a
longer term as well.
4. There are only two types of insurance:
- 4.1 Easy to apply but hard to claim.
- 4.2 Hard to apply but easy to claim. (The rest are all in between).
Which do you prefer?
5. 1 out of 7 death claims
is due to accidents. (see footnote 1)
6. More than 80% of the
hospital and surgical claims amount to $5000 or less. (see footnote 2) So what are
we paying premiums for?
7. You have a 50% chance of
being disabled for 60 days or more from age 30 to 60. (see footnote 3)
8. Your whole life policy
covers you for death, total and permanent disability but NOT for partial
and/or temporary disability. Which
is far more likely to occur?
9. Your accident plan may
pay only for dismemberment of limbs (e.g. amputation) and NOT loss of use
(e.g. paralysis).
10. You can sell your policy to virtually any willing buyer at a price
higher than what the insurance company offers.
1.Based on
GE Life’s yr 1996 death claims records.
2.A conservative estimate of GE Life’s yr 1996 hospital and surgical
claims records.
3. Some 1986 HMSO Social Securty Statistics, USA
How do we milk the maximum benefit from our
precious premium dollars ? Strange as it may seem, life insurance
planning all along has been more of an art than a science. That is why
ten agents may come up with ten different plans for the same problem.
Certainly not all plans will suit all the needs efficiently. Very often, we are either under or
over-insured. Yet it is only when we are efficiently insured (i.e.
neither under nor over-insured) that we reduce our hard-earned premiums
to a minimum.
Should a basic need such as life insurance
planning be left to guesswork or mere ‘rule of thumb’? Therein lies the
critical role of the agent. A concerned agent will no doubt recommend
what he feels to be in the best interests of his client’s needs. However,
is being concerned good enough to be considered as being professional?
The two pillars of professionalism are education coupled with professional
ethics. Unless an agent
understands his business well and conducts it ethically, what he
sincerely feels best for his client’s interest may not turn out to be so.
Perhaps it is due to my engineering
training that causes me to constantly seek a clear-cut formula to achieve
the optimal outcome possible given a set of conditions. I am thus excited that this little
rule that I’ve derived will guarantee an optimal solution. Life insurance
planning may now be a lot more predictable rather than a ’touch and go’
situation. For
far too long I was troubled by the question of whether my proposed plans
as adopted by my clients were really the best they can be. This is no
longer so. Of course we should not discount the fact that we are dealing
with a unique individual with varying risk tolerance and attitude toward
life insurance and life itself. However I’m confident that given the
parameters derived through discerning fact finding of our clients’ needs,
we should at least arrive at an optimal solution(s) that has minimal
variations. I’ve also discovered that this humble formula actually has a
universal application. I’ve thus decided to call it the Universal Rule of
Insurance.
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