In order to keep my finger on the pulse, I am a regular reader of on-line adverts for positions vacant in financial planning. Recently there have been a number of Insurance Sales Representative roles available. No previous knowledge of insurance is usually required, just experience with outbound tele-sales, the ability to quickly build rapport and a “hunter” personality. Base salary is fixed, but it is promised that successful candidates can add to that significantly through commission payments.
Insurance sales paid by commission are still alive and kicking even though most other embedded incentive payments to financial product distributors have been outlawed.
I assume that some of those who win the roles will find that they are making calls to people who do not complete a purchase when shopping for life insurance on-line. I had it happen to me when I was comparing prices for car insurance. I was called within hours; “why didn’t you go ahead?”, “we have offers/options not available through the website” etc etc. You can tell very quickly that they are highly motivated to get you to proceed.
When choosing to purchasing life, disability or income insurance in this way, how likely is it that the “hunter” on the other end of the phone is going to truly consider your needs? Will they:
- Work with you to look at your situation, analyse your needs and help you work out how much cover is actually required
- Look at ways to enable you to reduce your need for cover both now and in the future
- Make sure it is in your best interests to replace or cancel any existing cover you have in place
- Explain the differences between different types of cover and optional extras available and help you to work out how the cover should be structured
- Balance your need for cover with your ability to afford the premiums
Of course, professional advice without the conflict of commission costs more up front (the adviser has to be paid for their time somehow), however a commission free policy should have lower premiums year on year and should be expected to leave you better off over the long term.
Also, you can be sure that you have been personally advised, not hunted.
© Summation Strategies 2016.
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