Special Interview : Things Your Insurance Agents Won't Tell You

In this issue of Money&Wealth, the author had the opportunity to interview Khun Janthima of Thai Life Insurance Plc., who is quite a rare breed among a new generation of life insurance agents. Only in her mid-twenties with a Master degree in Economics from Chulalongkorn University , she is already one of the most successful agents with several awards under her belt. We discussed about life as an insurance sale agent and the things that most agents often neglect to tell their clients.

M&W: It's not often that we see such a highly qualified person working as an insurance agent, what made you want to choose this profession?

Janthima : You are quite right, I often asked my self the same question!. Most of my friends seem to look down on the profession of life insurance agents. Only losers with no jobs will go into this profession but for me I want to make a difference. My mother is also an insurance sale agent and I suppose she must have had quite a bit of influence over my decision. It is a well known joke in this business that when an insurance company managed to recruit 50,000 sale agents, 55,000 more agents would leave. This is one of the most challenging tasks for senior executives in any insurance companies; recruiting and retaining sales people. It is an expensive exercise and one in which, if not properly executed, can make or break a company. But in my case, I am quite happy with the challenge of the job and the freedom it brings. Money is also very good for those who make the cut. So I don't mind too much about the image or stigma of this profession.

M&W: Is it hard to be a successful sale agent?

Janthima : I must say this is not the easiest job in the world. This is mainly due to the bad perception of insurance sale agents such as force selling and commission driven sale tactics instead of serving the interests of the clients together with persistent begging for the business. When I get together with friends and I told them that I am an insurance sale agent, everyone would quickly tell me that they already have a life policy! But if you are a stockbroker, everyone would like to get to know you (may be hoping for hot stock tips.) So yes to answer your question it has not been easy! The standard excuse to brush off sale agents is to say that they have no money. But for me I am a firm believer that people will always try to find money for the things that they need. That's why I always concentrate on serving client's needs and it has served me well over the years.

M&W: So what are their needs?

Janthima: Essentially, in my experience, people have 4 main needs for life insurance:

•  Protection against premature death.

•  Savings

•  Medical insurance

•  Retirement

Premature (accidental) death comes top of the list for most people wanting to buy a life policy. Savings via insurance is also a popular choice; they seem to like to guaranteed return aspect of life insurance. As for medical insurance, self-employed people in the private sector find these policies essential because unlike civil servants or employees of large companies, they do not have such fringe benefits. Annuities policies are becoming more popular in recent years as investment vehicles for retirement purposes.

M&W: What would be an ideal amount for life insurance?

Janthima: This really depends on the personal circumstances of each person i.e. age, health, dependability, and of course wealth. Quite a lot of Thai people are under insured at the moment but I always advice my clients to limit their premium limit to about 10% of their gross income.

M&W: How would you advice people with limited means but need high life protection?

Janthima: Essentially, there are two main types of life insurance policies: Term-life and Whole-life. Term-life policies, as the name suggests, offer protection for a limited period of time such as 5, 10 15 or 20 years. And you don't get back anything when the policy expires. Premium on these policies are significantly cheaper than other types of policies, which make them ideal for young working professionals or entrepreneurs with high burden such as personal debts and young family members to look after. Whole-life policies, on the other hand, offer life-time protection with saving components attached to them. Therefore, premium on whole-life policies are more expensive.

M&W: What are some of the things that insurance sale agents often neglect to tell their clients?

Janthima: I shouldn't be telling you this! But seriously, I think there are about 5 main points that are often overlooked by most agents:

•  Need for protection : Once again, many agents failed to adequately point out the main needs for life insurance that I have mentioned earlier. If people don't see the needs, it will be that much harder to close sale.

•  How much protection ?: The second biggest mistakes that agents make is failing to do a proper analysis on how much protection is needed by the client. Quite often, many agents often push clients to take out the highest possible protection in order to push up their own commission with total disregard to the client's needs or affordability. Therefore, my advice is conduct a proper analysis on how much protection is actually needed before deciding which policies are right for you.

•  Only positive aspects : Many agents only talk about the positive aspects of life insurance and failed to point out that this is a long-term commitment. In fact, a life commitment, in the case of whole-life policies. Therefore, if a client fails to meet his/her premium payment during the early years of the policy, the cash penalty can be quite substantial. Therefore, when buying a life policy, it is crucial to look at the small prints in the policy. Don't just sign on the dotted line without reading them first.

•  15 days free-look period : By law, consumers have what we call “15 days” free-look period to turn down the policy if they feel that they have been misled. Again, many agents fail to inform their clients about their rights.

•  Commission : Although, it is not compulsory by law to inform clients about how much commission the agent will get from the policy but it is illegal (or shall we say, unethical) to give discounts to clients. Quite often, discounts are given “in kind” rather than in cash such as gifts or free meals etc.

M&W: Do you think Thai people will be willing to buy life insurance on-line?

Janthima: Buying stocks on-line, yes but life insurance will take several more years. It has not worked in other markets either. People still need the human touch and service when it comes to dealing with life and death matters such as life insurance.

M&W: Why did you choose to work for a local company instead of a big international firm such as AIA?

Janthima: As mentioned earlier, life insurance is a long-term business, so when you make a commitment or a promise to your clients, you better make sure that the company that you work for is going to be around several years from now when claims are made. Although, Thai Life Plc. is not a AAA-rated company but it is one of a handful of Thai companies that are rated by S&P. (BBB+). Moreover, Thai Life is a 60 years old firm, which says something about its management and long term viability. But most importantly, being a Thai company, every Baht is reinvested in the long term development of our country whereas foreign firms repatriate profits back to the parents' company rather than keeping it in Thailand.