Proposed Commission on Life Insurance Products

Dear Mr. Tan,

I have a proposal. In future the products will have a low cost(commission and expenses) and reasonable profit margin for the company.

Commission will range between 5-10%
1. whole life and endowment products will pay 10% for 1st year and 5% next 2 years.
2.Term products will pay 5% for 2 years.
3.Other products 5% for 1 year.

The commissions above are to be paid to agents who sell and push products and do nothing but soliciting and form filling.

Those who are qualified and competent and who can prove professional competence in specific area to provide financial planning advice can charge a NEGOTIABLE FEE (hourly or piece rate)with customers.

This will keep the cost low for the consumers and the company. The products can charge low premium for larger coverage and higher return of about 4% after 10 years.
This model will attract those advisers who are serious about helping people to upgrade themselves and to be paid according to service and work done for the customers.

For agents who sell only, they get the commission as in the products.
This will be akin to other professions where fee commensurate with professional advice and work and not for form filling, legwork or solicitation and some other non financial services.

This is the most equitable and agents who think of 'get rich quick' are nor suitable for this trade.This will stop mis-selling and misrepresentation, unethical selling , conflict of interest and malpractices.

This will weed out agents who are in the business just for the money and who not interested in helping the customers. This will elevate the profession .

Fair Dealing

REPLY
Under the current market price, the commission paid to agents is 5 to 10 times of the above proposed rates. I agree that the current commission rates are too high and unfair to consumers. I advice consumers to look at the commission rates stated in the Benefit Illustration and avoid life insurance products that pay comissions of $1,000 or more to the insurance agent.