Life Insurance Broker

If you’re not comfortable finding your own life insurance policy and buying it directly from an insurer, a life insurance broker may be able to help you. Here’s an overview of what they do.

Generally speaking, life insurance can be bought one of three ways: ‘direct’ from a provider; on an ‘advised’ basis through a life insurance broker or financial adviser; or you may have life insurance through your super fund, sometimes by default. 

If you understand your insurance needs and are confident in the type and amount of cover you need, you may find it a fairly straightforward process to buy life insurance directly from an insurer or by speaking to your super fund. 

However, if you’re thinking of taking out life insurance but aren’t sure how much you might need, or aren’t comfortable taking it out by yourself, you may want to consider a life insurance broker as an option. 

What is a life insurance broker - A life insurance broker is a product specialist whose job it is to help you identify and purchase a life insurance policy suitable for your needs. Life insurance brokers generally have a thorough knowledge of the life insurance market and the products available, which may help you make a more informed decision if you do take out a life insurance policy. 

However, it’s worth keeping in mind that some brokers may receive commissions from the insurers whose products they sell to clients, and that others may represent or work for only a single life insurance provider, or a limited selection of providers. Their incentive could therefore potentially be to sell you a specific life insurance product, rather than to help you make an informed and unbiased decision regarding which life insurance policy is right for you. 

It could be worth doing some research on any life insurance broker you’re considering contacting, so you understand which insurers they work with and how wide of a selection they are likely to offer you. You may also consider engaging the services of a Financial Advisor, as they can also potentially guide you through the process of taking out life insurance, whether direct or advised. However, it’s worth noting that financial advisers can sometimes also only work for a single company, so it’s just as important to do your research if you decide to seek the services of a financial adviser. 

What do life insurance brokers do - A life insurance broker will generally sit down with you for an initial conversation about your life stage and circumstances in order to ascertain your insurance needs, and figure out what type of life insurance might be right for you. They will then use their product and market knowledge to identify one or more products they think may suit your needs. In some cases, the number and range of products they decide to pick may be influenced by any commercial agreements they have with various providers. 

If you choose to proceed, they may then organise a second meeting with you to go over the products they’ve shortlisted, and help you decide which one, if any, are right for you. Keep in mind that you have no obligation to meet again or continue past the initial meeting if you do not wish to. 

If you do proceed to a second meeting, it will generally involve the broker providing you with a comprehensive view of the products they’ve selected, and explaining factors such as:

• The potential pros and cons of the products they’ve selected
• How much the premiums on each product will cost 
• Any limitations or exclusions that the products have
• How any health conditions you have (that may affect your cover)
• Any jargon or fine print in a product’s PDS
• The application process, and any fees that may apply
• How the claiming process works in the event that you or a family member ever needs to make a claim on the policy

Your life insurance broker may also act as an ongoing adviser and administrative assistant, helping with any ongoing issues or questions you may have regarding your life insurance policy. 

How do life insurance brokers make money - In addition to potentially receiving a base salary from their employer, life insurance brokers typically make money through commissions earned from the providers whose products they sell, through the fees they charge their clients, or a combination of both. 

Even if a life insurance broker is independent and not employed by one specific life insurance provider, they may still earn a commission if you buy a life insurance policy through them. 

Additionally, or alternatively, a life insurance broker may charge you a fee for their services, whether once-off or ongoing. 

Is it cheaper to buy life insurance through a broker - Yes - it is cheaper to buy direct from life insurer. However - buyer should consider the following factors when buying through broker - 

• The size of any fees your life insurance broker charges
• The total cost of your life insurance policy, including any discount your broker may negotiate on your behalf
• What level of cover you require
• How much a similar level of cover through direct life insurance would cost you

Do you need a life insurance broker - When deciding whether or not to engage the services of a life insurance broker, you may want to consider the following questions:

• Do you need life insurance in the first place?
• Are you clear on how much insurance you need?
• Do you understand the options available to you regarding policy types, and factors such as waiting and benefit periods?
• Are your insurance needs complicated, potentially making it difficult to get a policy by yourself? 
• Have you assessed some of the pros and cons of buying advised life insurance through a broker, as discussed above? 
• Are you willing to potentially pay a fee for the services of a life insurance broker? 

What questions should you ask your life insurance broker - If you’ve decided to meet with a life insurance broker in order to explore your options, here are some of the questions you may want to ask them before paying for their services:

• Do you work for, or earn commissions from any life insurance provider(s)?
• What are your qualifications? Are you qualified and licensed to provide personal financial advice?
• What will your services cost me? 
• Do you think life insurance is suitable for me? 

Chinese Buyers Dries Up At Hong Kong

One of the biggest sources of demand for Hong Kong insurance products is drying up as the city’s summer of unrest deters Chinese buyers.

A group of about 80 agents working for one insurer saw their team’s sales to visitors from mainland China fall by almost 30% in August from the previous year, according to a senior member of the group. Sales for September are on track for another tumble, the person said. Two other agents in the city said their business had also fallen steeply after anti-government protests intensified. They all asked not to be named discussing private information.

Chinese customers have long flocked to Hong Kong for insurance sold by the likes of Prudential Plc and AIA Group Ltd., in part because the products offer an investment component and payouts in foreign currencies that are hard to come by on the mainland. But many prospective Chinese customers are now avoiding the former British colony after protesters disrupted transport services and engaged in violent clashes with police. That’s pummeling insurance sales because industry rules require policyholders to be physically present in the city before a contract can be finalized.

Read more: Hong Kong Tourism Arrivals Plunge Most Since 2003 SARS Crisis

In one sign of how big the issue has become for insurers, Prudential this month arranged mobile processing centers in conference rooms at a hotel near Hong Kong’s airport, allowing visitors to sign their contracts without venturing into the city, according to a company memo seen by Bloomberg News. It’s unclear whether the move will alleviate customers’ concerns, given that the airport has also been rocked by protests in recent weeks.

Few expect the city’s turmoil to end any time soon, even after Hong Kong Chief Executive Carrie Lam last week gave into one of the protesters’ demands by scrapping the extradition bill that initially drew people onto the streets three months ago. The risk for Hong Kong’s insurance industry is that an enduring period of unrest undermines the city’s reputation as a safe and reliable provider of financial services.

"If this drags out more than a couple of quarters, it would do serious damage, ” said Steven Lam, an analyst at Bloomberg Intelligence in Hong Kong.

A Prudential spokeswoman in Hong Kong confirmed the contents of the company’s memo, while declining to comment further. An AIA spokeswoman declined to comment.

The protests have thrown a wrench in what Hong Kong insurance agents -- some of whom quit careers in banking to join the lucrative industry in recent years -- had expected to be a strong 2019. New premiums from policies sold to mainland visitors increased 18% to HK$26.3 billion ($3.35 billion) in the first six months of the year from the same period of 2018, accounting for 26% of total new premiums from individuals, according to Hong Kong’s Insurance Authority.

If not for the unrest, sales would have been expected to remain robust as the Chinese yuan slumped, a move that typically increases demand for foreign-currency policies.

Instead, Chinese buyers have stayed at home as protesters blocked roads and clashed with police in districts such as Tsim Sha Tsui and Causeway Bay, where many insurers operate customer-service centers catering to tourists. The number of Chinese group tours to Hong Kong fell 90% in the first ten days of September versus the same period last year, following a 63% drop in August, according to data compiled by the Travel Industry Council of Hong Kong.

Prudential shares, which climbed 28% this year through early July in London, have since dropped about 16%. AIA has slumped about 10% from its July high in Hong Kong.

Assuming the current protests last six months, AIA’s value of new business may drop 5.6% in 2019, Michael Chang, an analyst at CGS-CIMB Securities Ltd., wrote in a note on Tuesday. "Our recent visit to mainland China suggests strong belief among people living in mainland China that it is currently unsafe to visit HK, and they are delaying or canceling travel plans.

Insurer - Offer Assistance - US/China Trade War

As the US-China trade war intensifies, an insurance company run by the Chinese government is stepping in to support Chinese exporters, providing low cost coverage and chasing down US importers unwilling or unable to pay mounting tariffs.

China Export & Credit Insurance Corp, known as Sinosure, has aggressively increased its insurance of Chinese exporters since last year, according to company sources and public data.

The government-led aid is being carefully watched by trade experts who say the practice may run afoul of World Trade Organization (WTO) commitments or be challenged by the administration of US President Donald Trump, who has railed against what he says are China’s unfair trade practices.

Sinosure has boosted the number of new clients by thousands since last August, often relaxing its standards to do so, company data and two Sinosure sources familiar with the standards say.

The insurance policies help cushion companies from the risk of export deals collapsing because of elevated duties on goods flowing between the world’s No. 1 and No. 2 economies.

China and the United States have been locked in a tit-for-tat trade showdown for over a year, with the latest increases to tariffs on hundreds of billions of dollars worth of goods taking effect this month.

Last year, as the trade war started to bite, Sinosure’s claim payouts surged more than 40% to nearly US$2bil, according to data from the company, which is owned by an investment company controlled by the finance ministry.

Payouts are poised to climb further this year with tariffs rising, according the company’s internal estimates.

The payments stem from what one Sinosure official said was a growing number of US buyers of Chinese goods who were unwilling or unable to pay higher prices for shipped goods. That has left some cargoes stranded at US ports, and Chinese exporters on the hook.

“We’re fulfilling our role as a policy insurer, not a for-profit commercial institution,” said the official who spoke on the condition of anonymity because he was not authorised to talk to the media. The Ministry of Finance, the ultimate parent of Sinosure, did not immediately respond to Reuters’ requests for comments.

Eugene Weng, a Shanghai-based attorney who represents Chinese exporters in trade investigations, said it was unclear if Sinosure’s practices might trigger WTO scrutiny.

“But such practice, if widely implemented, carries the risk of violating WTO commitments, and will face challenge from the Office of the United States Trade Representative for sure, as they usually set rules on their own,” said Weng, from law firm Wintell & Co.

For its part, the Trump administration has provided billions of dollars in subsidies to American farmers affected by Chinese tariffs as it too seeks to cushion the impact of the trade war.

Trash For Food - Philippine

A village in the Philippines is trying to tackle the scourge of plastic waste by offering rice to residents in exchange for their trash. Residents of Bayanan outside the capital, Manila, can get 1kg of rice, the staple food for Filipinos, for every 2kg of plastic waste, which is handed over to the government for proper disposal or recycling.

The Southeast Asian nation is among the world's top marine plastic polluters, studies show, with laws on solid waste poorly enforced and no regulations on packaging manufacturing.

"I weighed in at 14 kilos of residuals, so I got seven kilos of rice grains. This is a big help for us to have one kilo of rice for the day. I feel that our surroundings are really dirty. If only I could, I would pick up all the plastics along the road when I walk outside," said Veronica Dolorico, a 49-year-old supporter of the programme.

One kg of rice costs about 30-40 pesos (RM2.91), which is costly in a country with a fast-growing economy, but high rates of urban and rural poverty. One-fifth of the population of 107 million people live below the national poverty line, with monthly consumption of less than RM1,004 per person.

Bayanan collected more than 213kg of sachets, bottles and plastic bags in August, said village chief Andor San Pedro, adding the food-for-trash swap is teaching people how to properly dispose of their waste.

Educating Public On Life Insurance

A new study commissioned by AALU and the Future of The Industry Working Group identified the majority of Americans believe they need a life insurance policy, and there is a significant need among Americans for life insurance education. The study, the Future of Life Insurance and Beyond, found that 63 percent of Americans believe they either need a policy or are unsure if they do, and nearly half of all Americans believe life insurance (in any form) is very or extremely relevant to their needs.

"There are 70 million Americans that are either uninsured or underinsured. What this survey proves is there is a huge void in awareness and education around the important role life insurance plays in a successful financial plan," said William Shelow, CLU®, ChFC®, CPCU®, LLIF, chairman of the Future of the Industry Working Group, and president and chief executive officer of LifeMark Partners, a life insurance distributor. "Now more than ever, it's crucial that life insurance professionals and financial advisors are providing the education needed for Americans to understand its value and place so they can make informed decisions about their coverage options."

"This study reinforces a growing problem within our industry and our country's financial and retirement security," said Marc Cadin, President and CEO of AALU. "Americans want more education on life insurance, but do not believe they have the tools to do so. I look forward to working with the noble professionals in our industry to help more Americans navigate their financial needs."

The study surveyed 500 Americans between the ages of 25-75 that have never purchased an individual life insurance policy and found that 63 percent of Americans believe they either need a policy or are unsure if they do. The survey also found that nearly half of all Americans believe life insurance (in any form) is very or extremely relevant to their needs, and the majority of Americans (68%) would prefer to buy life insurance from a professional than through an online platform (32%).

Other Key Findings in the Survey Include:

• 44 percent of Millennials and 51 percent of Gen-Xers believe an ideal financial plan would include life insurance.
• The top three reasons given for not owning a life insurance policy are:
• Too expensive
• Already have life insurance through an employer
• Have plans to buy a policy eventually; it just hasn't been a priority
• The most relevant reasons identified for purchasing a policy, in order of importance, are:
• To cover the costs of funeral services/burial/cremation
• To protect loved ones from becoming responsible for debt
• To help loved ones recover from death and support loved ones who are financially dependent.

"When you explain to an uninsured person why other people have bought life insurance, what it does and how it helps protect loved ones, they quickly learn the importance of purchasing a policy," said Shelow. "With the majority of Americans preferring the personal touch of a life insurance professional as opposed to shopping online, together we can all do our part in helping educate America's un- and under-insured consumers."

Stop Procrastinating On Life Insurance

Are you like the majority who don't have life insurance, but also know that you should? Life insurance is probably something you're uncomfortable talking about, but it's far too important to put off. September is life insurance awareness month, making now a good time to reconsider what is really holding you back. 

Here are perspective on the six most common reasons people delay buying life insurance

It's too expensive. Cost is the number one reason people don't have life insurance. A  study shows that consumers tend to overestimate the price of life insurance. For instance, when asked how much a $250,000 term life insurance policy would be for a healthy 30-year-old, the median estimate was $500 annually—more than three times the actual cost. Life insurance is probably more affordable than you think—and there are lots of ways to bring the price into your comfort zone. 

I have a health condition. The good news is that having a health condition doesn't automatically disqualify you from getting life insurance. If you overcame a serious condition in the past or if you are managing a condition with the help of a medical professional, you can still be covered. 

I don't have any kids. There are many reasons people with no children still need life insurance. Just a few include providing for a financially dependent spouse or another family member, having the money to pay for a funeral or being able to pay off a loan that has a cosigner. Life insurance can also help you leave a gift to a religious, educational or charitable organization near and dear to your heart. 

I don't work outside of the home. If you stay home to care for kids or other family members, it may take hiring someone to replace all that you do. And that could be pricey, so definitely consider buying life insurance as a way to cover those additional expenses. 

I'm not sure what I need. Most people don't—but there are plenty of life insurance agents/advisors out there to help you. There are a wide range of insurance product to meet your needs and your budget. 

I don't have the time. Life is busy but financial planning is critical. One can buy simple life insurance product online and it only takes a few minute. For a more complicated life insurance need - it will take only a few hours to invest in an appropriate policy.