5 things to know before meeting your Financial Representative

Pretty much like how consumers are increasingly shopping online, more insurers are enabling their customers to make their insurance purchase over a few clicks on the internet. But with insurance being such a personal and complex purchase, many consumers do not have enough product knowledge to get the relevant insurance coverage for themselves without having a financial representative to advise them. This is why many still prefer to speak to a financial representative who can help them understand their objectives about getting an insurance and recommend suitable products.

To find a good financial representative is never an easy task. Most come to meet one through the recommendation of friends and relatives. However, due to the competitive nature of the insurance industry, consumers are strongly encouraged to do some groundwork on their own and not trust their financial representative blindly.

It is thus extremely important to do some "homework" before you meet with a financial representative. Here are four simple ways to help you prepare yourself before the meeting.

It is important to understand your objective of buying insurance in the first place. Are you looking for financial support for your dependents if unforeseen incident happen to you? Planning for your retirement; or looking for a life insurance plan that can provide protection with an investment element? Or do you need a health insurance that can help you settle your medical bills?

It is fine to have a number of objectives, but it is good to have them in mind so that you can give your financial representative an idea of what your priorities are.

Now that you have given some thought to your priorities and objectives for getting an insurance policy, it's time to get knowledgeable! You can refer to Manulife's solutions page to find out the different product types available that can address your needs. For instance, if you are looking for medical expenses cover, there are six types of insurance products available for you. If you find it too daunting to go through everything, simply read through one briefly to have an idea, so that you do not appear clueless to your financial representative!

When you show that you know the basics of these insurance products, your financial representative will think twice about gleaning over the details since he/she knows that you may ask some in-depth questions with regards to the products.

While working through your objectives, you may face the problem of wanting to be covered by as many types of insurance as possible. But the truth is that it will be very expensive to do that, and highly impractical as well. This is why it is important to find out what your priorities are, as well as how much you can afford to spend on insurance every month.

Do not be disheartened if you find that you can only afford S$100 to S$200 a month as there are many ways to work around, adjusting your insurance coverage. For instance, getting a term plan can be an alternative to a whole life policy for getting pure protection; your financial representative can also help you to adjust the coverage amount to reduce the monthly premiums.

Some people may not be comfortable asking their financial representative questions because they are afraid of looking silly. Instead, they may prefer not to clarify any doubts and pretend to understand what the financial representatives are saying. This is not a wise approach since it can cause dire consequences if you take the product recommended without proper questioning.

So as you do your research, take note of the doubts you have so that you can clarify them with your financial representative. On top of that, asking questions can also help you gauge how knowledgeable your financial representative is about the products. If you have concerns about how much commission they are earning from your insurance purchases or their track record in their industry, go ahead and ask him/her as well! Establishing trust with your financial representative is very important, so you should not feel shy for clearing your doubts.

Having done your preparation work before meeting your financial representative, you may want to look out for signs that you would need a second opinion. These include:

• Being overly product-focused

If the financial representative did not start off asking you about what you want and what your priorities are, instead, only pushing one type of insurance policy, you may want to be cautious. This can be linked to certain sales incentives given to push for a certain product, thus giving rise to unethical behaviour and breach of regulations.

If this is the case, you should seek a second opinion. Do not feel obliged to take up the policy.

• Enticing you with free gifts

Shopping vouchers, free movie tickets or food and beverage vouchers are hard to say no to. Who doesn't love free things? But in the context of using these to entice you to buy an insurance policy, it surely isn't smart to be enticed by it. With the industry being so competitive, giving away freebies may sweeten the deal for consumer, but shouldn't be a deciding factor for taking out an insurance policy.

• Encouraging you to switch out of your present policies without justification

Financial Representative must not encourage their clients to switch insurance policies unless it is entirely unsuited to their objectives. This is because cancelling a policy can come with substantial financial losses. If your Financial Representative suggests that you cancel a policy to take on a new one, you should ask for the rationale and consider it carefully. You should also ask about what your losses can be and are there benefits and advantages with the new policy that the old policy does not provide.

For health insurance products, before you switch, consider whether your health has changed from time you bought your current policy and whether you have any existing health conditions.

Seek a second opinion if you are in doubt.

Buying an insurance policy with the help of a Financial Representative is still an integral part of the financial planning process since it helps you identify your needs and clarify your doubts about the products. Having an experienced Financial Representative can also help you check your blind spots and help make the claiming process easier.