Saturday, August 29, 2015
Is It Right
“Cowardice asks the question: Is it safe? Expediency asks the question: Is it political? Vanity asks the question: Is it popular? But conscience asks the question: Is it right? There comes a time one must take a position that is neither safe, nor political nor popular - but one must take it simply because it is right.” - Martin Luther King, Jr
Thursday, August 20, 2015
Indonesian Life Updates
Agents contributed almost 50 percent of last year’s Rp 121 trillion [US$8.85 billion] of life insurance premiums,” he said, adding that his body aimed to have 500,000 agents by this year-end and 1 million agents by 2020.
As many as 454,706 licensed life insurance agents were recorded as of June, a 27.46 percent increase from the 356,731 agents recorded in 2013. The annual average growth since 2013 reached 17 percent, according to the association’s data.AAJI acting executive director Togar Pasaribu revealed that the contribution by agents was closely followed by bancassurance at around 48 percent while the remainder came from other sources, including telemarketing.
“However, I doubt that online marketing will work for Indonesian customers any time soon because currently they prefer to have face-to-face briefings prior to deciding to buy an insurance product,” he said. Togar went on to say that online marketing would work only if Indonesian customers were fully literate in insurance terms.
Hardwork, determination & Dedication
The Penang-born should know what she is talking about. And, rightly so.The 30-year-old made the country proud when she attained international success in bagging the prestigious Million Dollar Round Table (MDRT) USA award for her personal achievement in the insurance business from 2010 until 2014.
The full-time sales manager of a private insurance company said currently, her main aim was to inspire Indian youths in Malaysia to consider a career in insurance as there was a huge untapped market in the business, namely under the life insurance category.
"Indian youths should not sit and wait for the opportunities to come. Most parents want their children to become doctors and lawyers but fail to realise there are other opportunities such as in the insurance business. My life changed once I got into the insurance business," she told Bernama in a recent interview.
Govindasamy noted the working population in Malaysia was growing each year and that the youngsters could leverage on this opportunity by selling life insurance policies to make their future more secured financially.
Asked what inspired her to seek a career in insurance, the woman with 700 active clients under her belt said her uncle approached her to seek a career in the business when she was in dire straits in 2009.
I had started to work at the age 13, due to my family situation. I was looking for an opportunity until I joined the insurance business introduced by my uncle. Since then, I strugged maximum without fail to attain successs, considering the situation of my family," said the fifth of 11 children who supports all her siblings and parents financially.
On the success formula which an insurance agent should adopt, Govindasamy, who holds a certificate in a computer course said, to achieve success in the business, one should add value by going the extra mile for customers and, at the same time, understand their needs before selling them any policy.
An agent must be focused on their work to succeed and should have sound knowledge on the products which they are selling. Besides that, an agent should also be innovative and try to be different from other agents in the way of approaching customers. She said having a consistent performance was also a hallmark of a successful agent as it reflected the individual's passion for the job.
She also believes very much in giving back to society and has no qualms helping others as she thinks that if the person she helps becomes successful, she will also share in that success. The woman who emerged champion agent nationwide in 2013 and started to shine in the business since then, said she aims to become a top insurance agent in Asia Pacific and clinch the highest insurance industry award, Top of the Table (TOT). TOT is the highest insurance industry award given to an agent, followed by the Court of the Table (COT) and the MDRT.
Wednesday, August 19, 2015
Thursday, August 13, 2015
Universal Life - It Sucks As You Age
But he didn’t anticipate the policies’ annual costs would rise as much as they did, jumping to about $30,000 combined.
“Laying out this kind of money is a hell of a thing for a fellow living on a pension and Social Security,” says the 82-year-old Airmont, N.Y., resident, who aims to keep the policies in force.
It is one of the most damaging but least-understood ramifications of years of low interest rates: Mr. Vertullo is among millions stung by the intricacies of a type of life insurance that combines tax-deferred savings with a death benefit.
Known as “universal life,” these policies accounted for more than 25% of all individual life-insurance sales for much of the 1980s, when the 10-year Treasury yield peaked at 15%. While the 10-year Treasury is off its mid-2012 low of 1.404%, any big increase will come too late for many who bought policies in the 1980s, financial advisers say.
Universal life works like this: The buyer deposits money into the policy. The insurer deducts for expenses, including the cost of the death benefit, and the rest of the money stays in the policy earning interest to help pay some, or all, of the future costs. The annual cost of the death benefit typically rises as the holder ages, to reflect higher chances of death.
During the sales process, agents typically work up “illustrations” to show how the savings build. But the 8%-10% rates highlighted by many agents in years past weren’t guaranteed—which buyers like Mr. Vertullo say they didn’t fully understand.
Malaysia General Insurance Updates
It is not easy to do a start-ups and was much easier this way," he added, noting that there is room for mergers and acquisitions; this is further driven by the liberalisation by Bank Negara Malaysia to allow for higher shareholding among foreign players. PIAM foresees foreign ownership among insurance players to be higher among the insurance players moving forward. Bank Negara has eased its restrictions to allow foreign (insurance players) investors to own stakes from 49% to 70%.
Chua said the consolidations are likely to take place among its 22 licensed direct insurance companies. Presently, PIAM has 28 member companies consisting of all licensed direct insurance and reinsurance companies for general insurance in Malaysia (PIAM started out with members from 56 companies).
PIAM has revised downwards its forecast growth for 2015 from 5.5% and 6.5% to a much lower 3% and 4%, due to challenging business headwinds and the weakening of the ringgit. For January to June 2015, the general insurance industry grew by 2.3% to RM9.07 billion in gross written premiums compared to 6.4% for the same period for the previous year.
The association attributed the lower growth rate to a challenging business and operating environment. Motor insurance registered a much slower growth rate of 2.1% for the half year compared to 8.3% for the same period last year.
Fire insurance, the second largest class, saw a higher growth rate of 5% compared to 4.2% last year, it added. The other strong performing lines include Marine, Aviation and transit (MAT) and Personal Accident with growth rates of 6.1% and 7.4% respectively surpassing 2014 growth of 0.4% and 4%, it noted.
On the financial performance, the industry turned in a higher underwriting profit of RM754 million compared to RM637 million for the same period last year, with industry loss ratio improving to 56.7% from 58.4% during the first half of 2014.
Wednesday, August 12, 2015
Procrastination On Life
The process is tedious
Purchasing a life insurance policy is relatively complicated where interested prospect should compare prices, do research and understand before signing on the dotted lines. This process usually takes at least a week, to meet up with different agents from different insurance companies, compare the policy and premium, before deciding on one. Then, you will have to wait for the company to process your application before you will receive the policy. These pain points can be off-putting for most, resulting in people procrastinating their purchase.
Life insurance is expensive
It is normal for many to push life insurance to the bottom of the list when allocating money to other expenses. Unlike motor insurance, which is mandatory, life insurance is not compulsory for Malaysians. Like any insurance, life insurance is purchased as a just-in-case protection and can be purchased on its own without all that investment linked jazz that makes it seem expensive. It is definitely affordable, unlike what is commonly perceived.
It’s difficult to understand the policy
Even the most avid reader will not enjoy reading an insurance policy. This can be overcome by looking for insurance companies that present their policies in an easier to understand manner, and also knowing ahead of time exactly what to look out for in a policy.
Some of the key information to look out for in a policy is:
I’m still young
This is one of the most common excuses people use to delay getting the protection that they need.
It’s true, the younger you are, the likelihood of death will be much lower than an older person. However, this does not mean that death or even permanent disability is not possible. Accidents happen every day, and it is often unpredictable. Getting insured when you’re younger makes it less of a burden later on. Coverage gets more expensive as you get older.
I don’t have dependents
Having no dependents definitely means less financial commitments for a person. Perhaps you are single and your parents are financially independent. However, the last thing you want is to be a financial burden for your loved ones. Without an adequate life insurance, your death can have a negative impact on your family members, financially. Final expenses like funeral can be expensive, and without leaving behind any savings, this cost will inadvertently fall on your family.
If you have other debts, your close family members will also be liable to help your tie up loose ends in your absence. If you lose your ability to generate income, your daily expenses will be borne by your family too.
Furthermore, you may not be single for ever. One day, you will start a family with children, and by waiting until then to get your life insurance, you may see a big jump in your premium. Life insurance does not just protect your family members, but it also helps you to ensure your financial matters are taken care of even when you have passed on.
Sunday, August 2, 2015
Considering Your Life Plan
The problem is, "People don't wake up and think, 'I need to buy some life insurance today'."
Life insurance is generally something that comes up because of an event, such as getting a mortgage or having children. It's very easy in those circumstances to make mistakes.
Procrastination
Putting it off means that when you finally do want insurance, you may not be able to get it because of your unhealthy lifestyle or you may find you're saddled with numerous exclusions. Procrastination can be an expensive choice when applied to the decision-making process around our health and lifestyle protection requirements. People seem to forget one of the basic facts of life: as we age our health deteriorates and our options for making good [insurance] decisions decrease accordingly.
Underinsured
It's common to take a stab in the dark when deciding what level of cover to buy. Or we base it on what we can afford to pay. Most insured have too little life insurance. Academic research shows this to be the case.
A good test is will you keep the house [in the event of needing to make a claim]? Losing the family home is the worst-case scenario that must be avoided. You probably want more cover than that, but at least pass that baseline. Most insurance plans will fail this test either because there isn't enough insurance, or it doesn't cover not being able to work.
Neglecting Your Spouse
Your ability to earn can be affected by the non-working spouse dying or falling seriously ill, especially if there are children. You might need to take time off work and there are costs such as childcare.
There is a significant impact if someone else in the household is seriously ill, or in the worst case, passes on. The main income earner may be required or wish to take time off to care for the person or for the rest of the family. As an example, someone told me recently of a full-time mother who got breast cancer. Obviously, this is a traumatic time for any family, but it became even more difficult because the main income earner couldn't afford to take time off work to care for his wife and children.
Consider A Holistic Protection
You're much more likely to suffer illness than die. Some insurance policies cover you for far more than death. They may have extras or related insurances that cover you for income protection, trauma insurance and disablement.
When it comes to all the different types of life insurances there are, a payment on your death to provide for your family is the most well known. But insurance planning should also make sure that if something unexpected happens, like getting sick or injured, you have cover in place to help financially maintain your lifestyle."
Review Your Policy Regularly
Your circumstances can change and insurance policies evolve. Your life is dynamic — it's changing. Simply setting and forgetting about the sum you are insured for could see you with too little or too much insurance. Reviewing your policy at key life stages — getting married, taking on debt, having children, leaving the work force — ensures that you have the right amount of insurance for your stage in life.
For example, you might need a high sum insured if you have small children and a large mortgage, but a much lower sum insured once the mortgage is paid off and you have more savings.
A good life insurance policy will have some flexibility to change as your needs do, either by reducing or increasing your amount of cover without any further health or lifestyle questions if you have a life change such as a marriage, birth, adoption or getting a mortgage.
Buying On Price
Comparing life insurance quotes is notoriously difficult. It's very easy to be comparing oranges with apples and not realise it. One policy might pay out on terminal illness and another on death only.
Price is important when choosing an insurer and you can almost always save money by shopping around.
But there are other things to consider, too. We reckon a person choosing an insurer should also look at financial strength, policy quality and customer service, including the insurer's reputation at claim time. The good news is that these are easier to compare than they used to be.
Another factor to consider is who a claim will be paid out to. Will the pay-out go to your spouse or a trust, in order to pay off a mortgage? Wills and trusts are also worth thinking about at the same time as you're shopping for life insurance.
3 Reasons Why You Must Have A Life
For most of us, our first encounter with life insurance is when a relative, a friend, or in my case, a relative of a friend approaches us to buy a plan.
We do not shop for it – rather, it is offered to us and more often than not we buy it out of accommodation without understanding its value.
Is life insurance so important that we need to proactively seek for it, or is it an unnecessary cost that insurance people sugarcoat as an investment? While you may be leaning toward the latter, there are actually 3 vital reasons why life insurance should be part of your financial plan.
Settle all immediate financial needs.
Apart from the emotional burden, families that will be left behind when someone dies will incur immediate financial burden such as funeral expenses, hospital bills, estate taxes, and unpaid debts. These things can put a heavy toll on your family’s finances.
If you are single, the “immediate financial need” item can serve as good starting point to gauge how much insurance coverage you initially need. This will be the amount of economic loss that your parents or family members will have to absorb in your untimely passing.
Secure child’s education.
Parents, this is one of the compelling reasons why we need to have life insurance. As a parent, one significant life goal that we have is to provide the best education possible for our children. If you have saved up enough to cover your child’s future education needs, then you can cross this off your list.
However, the fact remains that majority of us are still in the process of building our education funds and the haunting question remains: "if I die tomorrow, will my savings be enough to ensure the continuity of my child’s education?" If the answer is “no,” consider life insurance as your safety net while building your child’s education fund.
If you do not have that amount stashed in your bank or investment account yet, consider getting life insurance coverage for that amount and sleep sound at night knowing whatever happens to you, your child’s education is secured.
Replace contribution to household income.
I am a husband and a father. If I die, my family will grieve for 3 losses: my wife will lose a husband; my daughter will lose a father; and my family will lose the income I contribute on a monthly basis.
The first two are irreplaceable but the third one is something that can be replaced by life insurance. If your family relies heavily on you to provide for their financial needs, consider yourself as the most important income generating asset in the family and it is only fitting to protect that asset and the income it provides in every way that you can. This amount will take care of your family and ensures the continuity of their lifestyle even when you are gone.
Cannot Afford To Retire
The majority do so to sustain themselves, according to the recently completed 5th Malaysian Population and Family Survey."Wanting to remain active, refusing to depend on others, paying off loans and not having anyone to rely on are also why seniors continue to work," she said.
Conducted every 10 years to monitor population and family system changes, the survey covers more than 10,000 households."A total of 69 per cent of working seniors surveyed said they need the money for daily expenses. Only 11.6 per cent said they work to keep themselves occupied," she said.Rohani was responding to Sunday Star's July 26 front-page report on how poor retirement savings and low financial literacy faced by a soaring population of seniors are among the reasons why Malaysia is not prepared to become an ageing nation.
She said 42 per cent of seniors had zero savings."Almost 85 per cent of those without savings say they didn't have enough money to save (when they were younger) but 3.5 per cent said it never occurred to them to do so," Rohani said, adding that 16 per cent of seniors did not save because they thought they could depend on their children.
The good news is that most seniors are receiving strong support from their families.Children gave their parents cash (80 per cent), food and necessities (68 per cent), and care (62 per cent), accompany or drive their parents around (71 per cent), help with household chores (64 per cent), pay bills (49 per cent) and listen to their grouses (57 per cent), said Rohani.Although only 35 per cent of seniors considered themselves healthy, a whopping 67 per cent said they never felt lonely, she added.Rohani said the Government was aware of the population's changing age structure and the rapid decline in fertility.
Malaysia's current population is 30.4 million."Due to unprecedented rapid decline in fertility, we are experiencing changes in the population structure," she said.By 2020, 50 per cent of the population will be aged over 29.9 years.
Those aged 60 and above are expected to increase to 12.6 per cent by 2030.To address the nation's ageing issues, Universiti Putra Malaysia's Institute of Gerontology was upgraded to Malaysian Research Institute on Aging in March, said Rohani.
She urged the centre to conduct more gerontology studies as it would set the policy direction for the elderly."Our fertility has dropped from three babies per mother in 2000 to 1.9 in 2015. My ministry is studying the best option for population policies," she said."A new and more innovative strategic plan of action needs to be identified."