8 reasons why you should not select a person as your agent
The key to quality insurance is in choosing a good quality agent. The word agent comes from the Indian
Contract Act, 1872 and it is the Christian name for the guy who brings an insurance/mutual fund product
to your doorstep.
Nowadays, they have various names like consultant, advisor, and the like, but I will use the word in its
real meaning. Many people do not think it is really material as to whether you select a good quality
agent or a friendly neighbourhood agent. Risk cover and wealth management are both things that you
need to plan for, much in advance.
Imagine thinking you have cover for medical emergencies, but realizing that it is not renewed after you have had an
accident. Imagine getting up on your 55th birthday and realizing your retirement target amount is 15 years away. It will be
too late to react. So choose an agent carefully because he/she can make your sunset years golden or dim.
The agent is omnipresent. For most of us, we follow an anti-selection process rather than a selection process to zero in
on an agent. So here’s a set of strong reasons for not selecting a person as an agent:
1. He is a neighbour. This can mean he is available for you, not that he is best. Typically, if he has meandered in his
career and at last decided that selling insurance or mutual fund is his calling, then that may not be sufficient to chose
him.
2. The brother-in-law, sister-in-law, father-in-law syndrome. Same as above. If they have built a business over a long
period of time, that is a good basis for selection. Not otherwise.
3. Length of being in the business: normally this is an excellent reason to buy from a person. However, in some cases, it
might mean that these are not enough reasons. Check if he/she is unbiased. Normally such people get stuck to one
company and so many years of brainwashing has lulled them into believing all good things happen only in that company
and other companies are bad. For example, in India you will find enough insurance agents saying ‘private companies
may not pay the claim’. This is hogwash. All private companies are reputed and have come with very, very strong
partners. Let's not kid ourselves. They will all pay. In case they decide to leave India, they will sell their portfolio to an
Indian company and then leave. Look at Sanmar.
4. It’s the boss’s wife; I have absolutely no excuses to offer. Play it by the ear, or get your CV ready.
5. It is a customer’s wife; keep the premium to the Diwali gift level.
6. It's your bank; They know the exact amount of money in the bank, they know where you eat, how you travel, what
school your kids go to, which credit card you have, but if they cannot plan your finances, be careful.
7. The guy who does not talk about term insurance at all. It is not to say that term insurance is the best, or it is most
suitable, but he should offer it to you. He should tell you that there is something called top up in a unit-linked plan. He
should tell you about single premium products. You choose the end product. He should give you the choices and
complete menu of products.
8. The agent/bank/advisor who sold you a plan that somebody knowledgeable called a lemon. If you have been had
once, that is enough. Do not repeat it.