After sharing about earnings from a Shield Plan, I like to share about the supposedly lucrative earnings from Whole Life Policies. I like to use the word "Supposedly" because I like to share that not all whole life policies pays an advisor very well.
I like to quote 2 examples of a Whole Life plan from TM Asialife that I marketed more based on a 5 years limited premium and a 20 years limited premium plan of $100,000 for a baby girl.
I used this example because I did a few 5 years limited premium TM Legacy this year. Not because I purposely propose this plan but they requested for it after due calculation and research and their family circumstances allows them for such purchase. I pretty like this plan because it allows a very competitive premium for a larger cover under such class of insurance.
TM Legacy - 5 Yrs Limited Premium
TM Legacy Premium - $1,978 /yr + CI Accelerator - $433/yr
First Yr Comm
$1,978 x 10%(Comm Rate) + 85%(Over-riding) = $365.93
$433 x 10%(Comm Rate) + 25%(Over-riding) = $54.13
Total 1st Yr Comm = $420.06 (Paid to Company)
Renewals Comm - 2nd to 5th Yr = $316.24 (Paid to Company)
What I gets over 5 years = ($420.06 + $316.24) x 59% = $434.42
Average over 5 years, I get $86.88 / year or $7.24/mth.
TM Legacy - 20 Yrs Premium Term
TM Legacy Premium - $682 /yr + CI Accelerator - $171/yr
First Year Comm
$682 x 40%(Comm Rate) + 85%(Over-riding) = $504.68
$171 x 40%(Comm Rate) + 25%(Over-riding) = $85.50
Total 1st Yr Comm = $590.18 (Paid to Company)
Renewals Comm - 2nd to 6th Yr = $463.96 (Paid to Company)
What I gets over 5 years = ($590.18 + $463.96) x 59% = $1,054.14
Average over 6 years, I get $175.69/year or $14.64/mth.
(Above are based on a 60% banding that I'm receiving from my company right now. My earnings will drop to 55% banding by next year if I'm not able to bring in $60,000 for my company. This means all will multiply by 54% next year which translate to a drop in earnings for future comm.)
I like to put a disclaimer for myself that my priority for my clients are Term coverage for the maximum needed protection first and I have my conditions before I recommend a Whole Life plan which have never been above $100k.
Thursday, October 15, 2009
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5 comments:
Please show the earnings for a Term VS WL at the same premium.
There are certain individuals who like to claim that agents sell WL instead of Term because it pays super well.
Bravo, Adrain... few think like you, who would put clients' interest first.
Many are for themselves. I know even some so called high flyers or better known as big time criminals who would fleece their clients without compunction and conscience.
I hope the time will and it will, people like you will be rewarded for integrity and competence.
The days of commission will be over soon. Persevere and hang in there .
Days of Commission will be over?
But I'm also worried about the viablity of fee based system in Singapore. I doubt Singaporean will want to pay much for a financial plan. There don't seems to be a benchmark on the fee and the extent of the work.
Financial Planning in Singapore for most people are not complex and I foresee that few will be willing to pay. Somemore, this is Singapore where we like things "Free".
MAS has already sounded to insurers to remunerate their agents by other means and not commission. Currently in other countries it is in practice along with commission products. By 2011 UK will completely go commissionless for all products.
Fee is the best alternative and clients can negotiate. It is more transparent and cleints know the cost.
Who wants to pay the agents $1000 for filling up the forms? Of course the agents will tell clients that they will not be able to claim without them. Is it true?
There may be other charges and costs to clients but they must be told and agree in writing.This is certainty.
Don't touch these toxic products. They will poison your poor clients for life.
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