Asked on 28 Mar 2020
" Insurance agents have to disclose to prospective clients the commissions they will earn from any policy sales."
"The MAS' Regulation 306 of 1996 spelt out in detail the limits on agent commissions as well as agency costs."
Agents commissions for the first year must not exceed
50% for whole life plans and 30% for endowment plans.
Touch your heart, how many agents actually disclose their commissions to you?
Are there any similar regulation on term, health and other insurance plans?
Yes, they must it is part of MAS regulations.
My agent was handed down to me by my parents, but he left shortly after he handed over to someone else who I don't really know.
So what happens is that right now, is that I was assigned some random agent who sends me a christmas card once in awhile.
But I have no clue what conmmissions I am paying to her.
Since this is asked, then it should be answered. Comissions are not fixed, as they are product dependent as you have stated clearly. Also, in the Policy Illustration how the commissions are reflected is in under the object distribution costs.
Distribution cost consists of comissions and administrative charges on the insurance policy. Do note that most insurance products only provide a continued commission of 6 years which is not leveled, meaning the commissions decrease drastically from the 2nd year onwards.
In regards to health insurance, the continued comission is 10 years i think (i might be wrong on this one). But it's also the same trend, meaning it's on a decreasing basis year on year.
If you don't ask, they don't tell.
Even if you ask (or don't ask), their commission is lumped together with their managers' overriding (another type of manager commission), bonus, incentives etc in "COSTS OF DISTRIBUTION".
Usually this COST OF DISTRIBUTION is 120% to 150% of your first year premium.
Your agent doesn't earn that much though, probably 40-50% of your saving / life plans etc.
Based on my experience, they won't tell you until you ask. Somehow it's a touchy topic for them. Maybe after you know how much they earn from the policy, they worry you won't buy or change mind after 14-days look-see period.
I have met many agents.
So far, only one has, on the spot, without a single shred of hesitation, tell me his commission.
I'm sure all products have such regulations. Otherwise, why need a licenced personnel to sell such product?
I bought my policies from NTUC, when signing document, it explicitly indicates the amount to be distributed for such purposes.
I got ask before:
how much monthly premium is to your commission?
For how long?
Replied was confidential information.
MAS write I can ask, I can know.
Reality don’t match Regulations
06 Apr 2020
And are there maybe still different "kick backs" not running under the name 'commissions'?
(provisions, bonus, etc.)
Take care with Mainstream.