Recently on social media, there was a viral post about a man who closed on a chapter of being wrongfully advised by his insurance agent. He shared his victory in gaining back most of his money and his experience of the whole process.
It is easy and convenient to shift the whole responsibility squarely on to the shoulders of the insurance agent and as a fellow insurance agent, I pity that agent but at the same time I understand the frustration of the customer.
More importantly, I just want to weigh in and share 3 tips to everyone before making the next financial decision especially in areas of insurance and investment.
1. Buy from field experts.
From time to time, I get people asking me to suggest an investment solution from the insurance company I represent. It goes something like this, “Are you from XYZ Insurance company? I want to invest some money. Can you suggest some investment solutions?” This is where I inform them to consider a few investment vehicles such as stock market, real estate, unit trust and others to suit their objectives.
Was I stupid to open the way for other financial service providers to have a shot? Some would agree but I feel it is a necessary conversation to have as a responsible financial service provider. It’s like when buying a car where we compare all the brands and select one which fulfils the driver’s and passengers’ needs. Furthermore, I always say ‘Let insurance companies insure and investment companies invest’.
Let’s look at it this way – in the event of a serious accident, I wouldn’t look for a veterinarian but a doctor to fix me up. They both know how to perform surgery and stitching their patients up, but their expertise would already be obvious for me to make a choice. Well, unless I’m Denzel Washington in “Man On Fire”, where I need to avoid the corrupt police at the hospitals and have to settle for a vet to patch me up.
2. Do not put all your eggs in one basket.
This advice doesn’t get old. With regards to any financial goals, it is perfectly alright to buy from 2 or more providers. There is no rule stating that anybody would be at a disadvantage in terms of service or benefits if you also bought from the competitor(s). As a matter of fact, the reverse is true. We get the best of what each company has to offer in their products.
In my opinion, each insurance company has their unique advantages over their competitors and that not one company holds a single product which solves all the problems. In the same way, not one investment product gives inflation-beating returns 100% of the time. It’s like saying there is someone who can clean your car, house and pets in a day, everyday. No, you shouldn’t be thinking about your mother or your spouse or your domestic helper. This person just doesn’t exist. This cleaning endeavour is a combined effort of a few people.
There is no ‘one ring to rule them all’ like in “The Lord of the Rings” for financial services. If you hear such a financial solution, quickly set up a fellowship of heroes and discuss if it should be thrown into the fires of Mount Doom.
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