Last Updated on 10, April 2014
Man with bad headache rushed to hospital, was sent back home with painkillers, by evening falls into coma and is brain-dead
Did anyone read this news in Straits Times on 1 July 2006 - Man with bad headache rushed to hospital ? Mr. Tan Beng Kiat, aged 30, initially had a headache. He was sent to a general practitioner and was given painkillers. However, his headache was so bad that his speech became slurred and he complained of weakness in his right arm and legs. When he could no longer recognize his family members, he was rushed to Tan Tock Seng hospital only to be sent back home as he was diagnosed with a normal headache by the attending doctor. On that evening, he fell into a coma and never awoke. Singapore General Hospital pronounced brain-dead as a bleeding in his head caused him to lapse into coma. He was taken off the life support system on 30 June 2006.
What is so painful about the story is that the man leaves behind a 25 year-old wife and a 1 ½ year-old daughter.
While I do not know the family members nor the deceased personally, I can imagine the emotion devastation that they are going through. I hope that the man is fully insured otherwise, the financial devastation is going to add more to the already overwhelming sorrows.
Life is very unpredictable. A great majority of the population will probably live a life that is “normal” and predictable. But there will be a small percentage of the population that will encounter life’s unfairness. While no amount of money can remove the lost of a love one, insurance can surely help remove all financial suffering as a result of the lost of love one. All financial suffering? Yes, that is true. The lost of income of a sole bread-winner due to death, total permanent disability and serious illnesses can be provided with insurance. In Singapore, insurance seem to gain itself a notorious reputation of unethical salesmen trying to hard sell a product to an unsuspecting person. I was at Giant supermarket at Bedok yesterday and I encountered an army of insurance agents prospecting for customers outside the supermarket. I was furious when they approached me asking me whether I would like to know how I could receive free gifts which were handphones and electronic gadgets. I identified that I am an independent financial adviser representative and reprimanded the insurance agent for ruining the reputation of the industry by enticing people into buying insurance for the sake of free gifts.
May I be so bold as to say that perhaps one of the main causes of Singaporeans being underinsured is due to unethical salesmen misrepresenting the usage of insurance as merely salesmen trying to sell another useless products with the ultimate aim of earning large commissions through mis-selling.
Back to the tragic case of the Straits Times story. Assuming that the surviving family needs $3000 per month, the financial lost to the family in simple arithmetic works out to be 3000 x 12 x (62 – 31) = $1,116,000, assuming retirement age is aged 62. This amount of money is so large! The emotion devastation is already overwhelming. There is no need for the survivors to suffer another blow in their finances. The good news for everybody is that such a risk of large financial lost can be transfer to a third party by a contract. This contract is known as an insurance contract in which a legal contract binds the insurer into paying out the sum assured on the happening of the insured event. Now, you must be thinking that the premium of such insurance must be out of reach to the masses. Let me tell you this, for a $1,116,000 sum assured that pays on death, total permanent disability it only cost $183.70 per month. Add in a rider that pays $200,000 on critical illnesses (while leaving the basic policy intact), the total premium works out to be $281.30 per month or $9.38 per day. The premium is GUARANTEED. This quotation is based on a male, non-smoker, next aged 31 and a coverage for 31 years (which ends at age 62). Now, who says a million dollar insurance is not affordable? Come-on, cancel that Europe tour and stop upgrading your car and you will be able to afford that premium for a FEW DECADES.
I have come to know clients who have bought so much insurance but continues to be underinsured. Why? The reasons are: (1) The advisers were more interested in earning large commissions and hence recommended expensive insurance (2) The advisers only represent one insurer and their insurer is known to have a huge profit margin in its insurance policies (3) the policyholders were too greedy and bought the policy probably because of the free gifts and (4) the policyholders wanted to back some cash out of the policy later in life. Oh please, I even heard in Singapore’s famoushttp://www.sgfunds.com that a person wanted to cash-out his whole life policy at later part of his life even before he bought the policy! (5) Policyholder bought the wrong kind of insurance policies – due to insurance agents’ mis-selling.
So what should a layperson do? Seek a truly trusted professional financial adviser that can help you. Be as wise as those who get the best bargain from Great Singapore Sales. Be savvy and look for the lowest but best insurance coverage that has the least fine prints with superior features. Not all features are necessary. One big insurer has the reputation of including so many riders into the policy. You can identify this insurer because its benefit illustration is peppered with unrecognizable alphanumeric code words which I bet the adviser cannot understand himself. Do you know why? Because these useless riders earns the largest profit margin for the insurer! Forget about all these useless code words and go for simplicity.
I pray hard that I am the adviser that is ethnical and responsible. So far I am in the right track and I hope my clients will appreciate the things I do. I can transact on behalf of 9 insurers and more than 320 mutual funds. But the pride that I have is not the wide range of products I can sell but rather because I truly am the client’s agent. The client’s agent is one that represents the interest of the client. (Legal: the insurance agent represents the interest of the insurer. He is the insurer’s agent. He is NOT the client’s agent. The client is merely the customer.) I always tell my clients to recommend others to me. This is for an important reason. That if I can be assured of recurring business from referrals, I can concentrate in serving my clients to their best interest. I don’t need to waste my time trying to do cold-calls and prospecting outside supermarkets with stupid free gifts and be part of the army of reputation ruining agents.
I hope I am not idealistic.
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