Hi, what are the pros and cons of buying insurance from an independent agent vs direct agent? I am considering getting a life insurance with Early CI rider and both agents recommend NTUC Star Assure. Any thoughts? - Seedly
Seedly logo
Seedly logo
 

Insurance

Financial Planners

Whole Life Insurance

Term Life Insurance

Early Critical Illness (ECI)

Xy

Asked on 13 Apr 2020

Hi, what are the pros and cons of buying insurance from an independent agent vs direct agent? I am considering getting a life insurance with Early CI rider and both agents recommend NTUC Star Assure. Any thoughts?

What would be the advantages of going with an independent agent over a direct agent? Or vice versa?

0 comments

13 answers

Answer Now

Answers (13)

Sort By

Luke Ho
Luke Ho, Venture Capitalist at CFX
Level 7. Grand Master
Answered on 22 Aug 2018

This is going to be hard for me to answer neutrally, but since I'm on vacation and in a really good mood...

First of all, asking you very personal, possibly jarring questions about your financial status is very normal. Personally, to me anyway - the more jarring, the better. My model has always been the fella who wastes no time exposing both the strengths and flaws in your financial portfolio. Your time is money - the less time you spend on it and the more time someone else does, the more you benefit.

Of course, thats theoretical. So it has to be a combination of four things: 1) Sincerity 2) Knowledge 3) Effort 4) Feel

1) You already mentioned he seems sincere. I think one of the best ways to gauge sincerity is that the planner is extremely upfront with his/her limitations. Maybe hes new. Maybe he's not the best dresser. Maybe the question you asked him is actually too hard for him. Whatever it is, you get a clear picture of someone who is very honest and not a poseur who wants to inspire a false sense of confidence in you - but someone who just wants to help you to his best ability. That's why it has to be balanced with -

2) There has to be a limit to how little you know. If you ask 10 questions and the FA can't answer 8 off the bat or at least something that sounds logical, you kind of know this may not be the FA for you. As a general rule, I never sell something I can't answer eventually or something that the client may potentially be better than me at - which is not that all uncommon today. But at the same time,

3) You want to gauge more on the effort of the FA rather than his present knowledge. This is ESPECIALLY important if you're getting from someone who is a) around your age b) a friend. If the person can't answer a question, does he get back to you promptly with the answer after finding someone or a resource that does?

This is actually a very common occurrence when it comes to buying CI policies, Term or Life, because while the insurers have to follow LIA guidelines, their definitions for claiming can be very different. ILPs with ECI have started to emerge recently - where they cover an even greater range of CIs than most policies and it makes balancing investments, insurance, coverage range and budget exceedingly complicated. Even a veteran FA in the industry can't be expected to answer questions related straight away, but do they show you they value you by addressing your issue promptly?

4) And lastly, the feels.

Trust me, the feels go a long way. And it's not just one way, it's on the FA side as well.

For you, an FA can be perfect but if you don't FEEL like having a long term relationship with this infuriating character, it just might not be the right fit.

Personally, I've experienced this and have tried not to take it personally the older I get in this industry. I've spent 3 hours with an auntie harping over the same issue before trying to explain that I'm not cursing her son every time I talk about insurance. Could she tell I was sincere? Sure. Did she think I was knowledgeable and putting in a lot of effort for her? Certainly. Did she think that we were going to get along in the long term? Most definitely not.

So on your end, that (4) can overwhelm the rest, and it's unfortunately worth considering as well.

Choose an FA who you think will go an extra mile for you, even when they're on holiday. (heh)

I usually leave an avenue to contact me, but how about you give your FA a second chance now that you've read this? :)

Luke ​​​

0 comments

👍
5
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

Hi Charmaine, this is a tough one. Being a blogger in this realm, I met many good acquaintance who should be above average when it comes to being financial advisors.

For myself, my luck have not been good. I think that sometimes we need luck to find a financial advisor that will be a good partner with you.

But you can help yourself by elminating areas where you will come across advisors that are less competent, do not have good heart.

Firstly, you must know to a certain extent what u need, why you need protection, what is out there. If you do not, most of advisors will try their luck to fleece you.

This is regardless of whether they are tied or not. Most have an economic incentive to push their luck with you.

You can try talking to those older and experience advisors but some of them will let their experience speak and overwhelmed you to trusting them with everything. I would be careful there.

The opposite spectrum will be those that show you the hard numbers, how these numbers and plans help you.

It's good to have mixture of the two above.

I have 2 advisors leaving me and my first one uses his experience to overwhelm me without the numbers.

What saved me was that I know to an extend the fundamentally right things to do. So I did alright.

If you were to choose, the ifa nowadays have a wider range of investments recommendation at their disposal. If the range is limited, no matter how great the agent is, she can only recommend inferior products. Let me know if I havent answered well.

0 comments

👍
4
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post
Changzhong Zhuang
Changzhong Zhuang, Not at all
Level 4. Prodigy
Updated on 07 Jun 2019

I value the following

  1. Sincerity

  2. Candour

  3. Knowledgeability

  4. Commitment

  5. Non-mercenary motivations

  6. Humility

  7. Diligence

I must say, that Luke Ho is a top man who I find fulfills the above. Found him on seedly, and working with him since.

3 comments

👍
3

1 more comments

Kenneth Lou
Kenneth Lou

20 Aug 2018

This is pretty cool thanks for sharing :) And in case you are wondering, this is Luke Ho's profile: https://seedly.sg/profile/luke-ho
Luke Ho
Luke Ho

22 Aug 2018

Just saw this, :)))) So sweet!
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post
Alan Kor
Alan Kor
Level 6. Master
Answered on 20 Aug 2018

If the agent does not sign a contract of fiduaciary duty with you, how do you know you can trust him/her?

0 comments

👍
2
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

Hi Xy,

A direct agent would only be able to provide plans from the insurer he/she represents. So if your direct agent is from NTUC and recommends Star Assure, that's understandable.

However, the IFA is able to recommend plans from more insurers, and thus by extension, should know the pros and cons of each plan and have a strong reason to justify Star Assure over any of the other insurers (which have been mentioned already and I won't repeat them).

Ultimately, a limited pay whole life CI plan is there to provide a payout in event of critical illness, so regardless of the company, the plan will fulfill what it was intended to do. However, you will of course want to get the most cost effective coverage along with the features that wil appeal to you. Consider asking your IFA to provide more details on other insurers and explain why Star Assure would still be the better choice (all things being equal, i.e. sum assured, type of coverage (late stage CI only, or a mixture of both early and late), payment term)

0 comments

👍
1
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post
Loh Tat Tian
Loh Tat Tian
Level 8. Wizard
Answered on 20 Aug 2018

If you belong to the high networth, you definitely should expect only the best to serve you. To be very honest, any FAs will make sure to understand your situation fully since any plans you buy likely would give them enough "meat" (aka commission), hence they will do it for you without question.

If you do not belong to the high networth, do also do yourself a favour by letting them know your finance status. This is because time is money to FAs. If you are an FA, do you want to spend 2 hours doing a comprehensive review, but not adding value because the infomation given to you is not accurate and unable to provide value to the client at the same time?

What if you are the client? Would you want a half-baked recommendation because there is nothing much for the FA to know to provide you with a solution?

For older agents, generally they have a lot more clients to service. Would that be a concern to you? Because they have less time to answer your queries.

For younger agents, they may not be as experienced to handle your questions. They definitely would not be more efficient than older agents in terms of recommendations and claim experience. (so your the one that is giving them the chance to hone their skills).

To answer your questions on selection, this is what i have done for myself

1) Are their knowledge much better than me?

2) Can they answer my questions?

3) Do they ask questions to uncover my needs too?

4) Do they ask comprehensively?

5) Do they check out exclusions, medical history etc etc?

https://www.facebook.com/themotleyfool/videos/10157362093662796/?hc_ref=ARSy8bR47-pteX_c42GXFltTLsXwSUKJRHUEMRtsVGnjmisWiIVU9l0dM9WvrqeF3Yc&fref=gs&dti=1758792264412132&hc_location=group&xts%5B0%5D=68.ARA9l5NhZyeP3WSP_mbhQwzdKsUHmbp2mfdmi_tdzi0jzG6S6mRqy-n8TRGtmKZkKn4QDD7U5VflsNB7TaHr2iKNU_9AN4lSbjKnLsXz9SyHffwiVJiW8DI7FzES_hJ26_ue7czhYp2o&tn=FC-R

For Tied FAs and Independent FAs, do cover this question instead. https://seedly.sg/questions/is-an-independent-financial-advisor-better-than-one-working-with-an-insurance-company-say-prudential-do-they-have-vested-interests

Also this article https://dollarsandsense.sg/insurance-agent-vs-independent-financial-advisor-vs-personal-banker-difference/

0 comments

👍
1
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post
Colin Lim
Colin Lim
Level 7. Grand Master
Answered on 13 Apr 2020

Tied agent will sell their company product... I have seen alot of tied agents finding fault with other insurance companies products and say their product is the best.

independent advisor can sell various companies products... However some are geared towards selling products that they are paid more on comm...

Find FA that can click with you... And honesty and sincerity is KEY.

If you are getting CI... There are different model of CI... Severe CI, early CI, multipay CI...

You can reach out to me if u would like to know more.

#planwithcolin

0 comments

👍
0
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

Generally, the plans that you are getting will be the same. Accordingly, the difference will be the efficency of the after-sales service from the company, as well as on the long-term working relationship with your agent.

Above all, you will want to work with someone whom you can entrust your future onto, and to help you when the needs arise, e.g. quick assess to the company for checks and after-sales, e.g. claims. In addition, working with a reputable company will certainly prove its worth.

Besides, you may wish to study deeper on the definition for claim for early critical illness. In essence, not all plans provide payout the same way. By far, all my clients prefer to have critical illness coverage with a broader definition for payout, as compared to one with complicated terms and conditions. This is because all my clients prefer to focus on recovery, rather than to fight the technical jargons.

Hence, you may wish to research along the same path as well.

I share quality content on estate planning and financial planning here.

0 comments

👍
0
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

Hi Xy,

The main difference is that an independent agent usually has tie-ins with at least 4 insurers and are able to advise you on products from other insurers that might actually meet your needs better due to the wider range of options.

In regards to direct agent, do you mean tied agency? If you do, these agents can only sell products from which ever agency they are tied to, like in my case, I'm only able to advise you on Prudential products as Prudential agents are tied agency.

0 comments

👍
0
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

Why Star Assure though? I've never recommended it as the top 3 options for WL with ECI are Aviva, Manulife, and China Taiping.

But nonetheless, there is not difference buying from a tied agent and a FA. Just choose the one you trust more. :)

1 comment

👍
0
Xy

13 Apr 2020

Thank you for answering. I have an existing hospitalization plan with NTUC, thus my NTUC agent recommend me Star Assure. The independent FA recommend me Star Assure as well ( not too sure why) when I asked for a quotation for WL with ECI. In that case, I may ask my FA for quotations from Aviva and Manulife for comparison too.
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post
Yang Teng
Yang Teng
Top Contributor

Top Contributor (Aug)

Level 9. God of Wisdom
Answered on 13 Apr 2020

Direct agent can only sell policies from one insurance company while and independent agent can sell policies from various companies, depending on your needs. If an independent and a direct agent advise you to the same policy, then maybe it's most suitable for you. Can't advise you on the specifics.

0 comments

👍
0
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

Thanks guys! I decided to go with a multichannel advisor (or what we layman called IFA but I think there ain't really any independent FA around in SG so..)

My friend recommended a AIA agent to me and this guy was pushing me to take up ILP while my point is to take up PA for vitality 😂.

Met him, asked for his credentials; time pass by with him keep pushing ILP to me and me signing on the PA with him on the spot. Message him next day not to submit the details because good thing I spoke to my multi channel advisor first... There's a lot of clauses guy didn't mention and I felt weird even though he was sincere. CSI-ed him and found out he lied about his credentials as well.

I'm not going to report him but I have already told him why frankly since he asked and should I see him in trouble some day I won't hesitate to add on evidences.. so I think apart from all the points that you all have mentioned, have to CSI your agent too! 😝

4 comments

👍
0

2 more comments

Charmaine Ng
Charmaine Ng

24 Aug 2018

Thanks Low! I'll check in with you if I need help! 😉
Charmaine Ng
Charmaine Ng

24 Aug 2018

Yeah Alan, I actually print screen what I CSIed and send to my friend. Ask her double check all the claims the agent made. Lucky for her is she didn't actually need him to recommend or to manage as she already knows what she needs.. but the agent did send a msg to her to try and salvage the boat. Lol. Turns out this agent was recommended to her by another friend who apparently bought quite a few so now they're double checking all the policies to see whether it really meet their needs or just for the agent's commission.
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post