Do Insurance Agents actually disclose their commissions to their clients? - Seedly
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CH

Asked on 28 Mar 2020

Do Insurance Agents actually disclose their commissions to their clients?

" 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.

  1. Touch your heart, how many agents actually disclose their commissions to you?

  2. Are there any similar regulation on term, health and other insurance plans?

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Yes, they must it is part of MAS regulations.

Cheers

1 comment

👍 2
CH
CH

10 Apr 2020

Thank You!
Kenneth Lou
Kenneth Lou, Co-founder at Seedly
Level 9. God of Wisdom
Updated on 06 Apr 2020

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.​​​

2 comments

👍 1
Pang Zhe Liang
Pang Zhe Liang

06 Apr 2020

Time to take charge of your policies!
Tan Li Xing
Tan Li Xing

08 Apr 2020

Hi Kenneth, if your policy has been around for more than 6 years, I don't think there is any commission that will be given to the agent
N
Ninja
Level 6. Master
Answered on 05 Apr 2020

Definitely, always ask and you shall get your answer. But commissions aside, it has many names too. It can be platform fee, premium, management fee etc. Read up carefully and nick pick every single cost to find out why

1 comment

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CH
CH

10 Apr 2020

Agreed. too many fees meant to confuse the individuals

Hi CH,

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.

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Cedric Jamie Soh
Cedric Jamie Soh, Director at Seniorcare.com.sg
Level 9. God of Wisdom
Answered on 20 Apr 2020

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.

1 comment

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Tan Li Xing
Tan Li Xing

20 Apr 2020

Hi Cedric, the commissions of up to 50% is only for the first year, from the 2nd year onwards, the commissions will start halving and half further the following year, and eventually most commissions end by the 6th year.
Sharon
Sharon
Top Contributor

Top Contributor (Jul)

Level 6. Master
Answered on 09 Apr 2020

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.

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Rave Ong Ci De
Rave Ong Ci De
Level 6. Master
Answered on 08 Apr 2020

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?

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Tee Hon Eng
Tee Hon Eng
Level 4. Prodigy
Answered on 07 Apr 2020

I bought my policies from NTUC, when signing document, it explicitly indicates the amount to be distributed for such purposes.

1 comment

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Tan Li Xing
Tan Li Xing

08 Apr 2020

Hi Tee Hon, usually the distribution charges are a general figure where the comms to the agent is part of that figure. But comms are not perpetual
Han Jinyuan Larry
Han Jinyuan Larry
Level 4. Prodigy
Answered on 06 Apr 2020

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

2 comments

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Ninja

06 Apr 2020

You know that you can complain to MAS and screw the agent upside down right?
CH
CH

10 Apr 2020

Yes, anything happen best is to complain directly to MAS. dont waste time with the customer officer. MAS will direct you to a higher authority within the insurer. Not the normal customer service officer. Usually will be a compliance manager or something.
Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Jul)

Level 9. God of Wisdom
Answered on 04 Apr 2020

And are there maybe still different "kick backs" not running under the name 'commissions'?

(provisions, bonus, etc.)

Take care with Mainstream.

2 comments

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CH
CH

10 Apr 2020

And not forgetting there are incentive trips.
Frankie Rappaport
Frankie Rappaport

11 Apr 2020

Ever less so in health care business f ex where the primary goal of agents (mostly ....) is the wellbeing of a patient.