Why Every Client needs an Insurance Policy Summary
An Insurance Policy Summary is like applying Clarity in Photoshop.
In my first post on the 3 types of insurance policies in Singapore, I ended the post with an acknowledgement that insurance policies have increased in complexity over the years. To this end, I feel that it is even more important to have a tool that enables us to understand our insurance portfolio with a greater clarity.
About the Insurance Policy Summary
As the term (insurance policy summary) suggests, this document attempts to summarise the essence of each insurance policy. Thereafter, they are combined onto a single piece of document such that three goals can be achieved at a glance –
1. Understand the existing insurance portfolio (Know what you paid for)
2. Identify possible financial gaps (Be aware on the risk of being underinsured)
3. Basic income allocation check (Ensures that you are not overpaying for insurance)
Who is the Insurance Policy Summary for
I will always print a copy of the summary for all of my clients. In fact, it forms part of the documents that we will go through whenever we meet for a semi-annual review. Correspondingly, the insurance policy summary works best for three groups of consumers:
1. Consumers who are unsure on the insurance policies that they own
2. Consumers who have too many insurance policies
3. Consumers who wish to seek a professional second opinion on their existing insurance policies
Why will an Insurance Policy Summary Work
As consumers, we buy insurance policies over different time period. In the ideal case, we will understand the policy clearly before we agree to sign the contract.
Over time, there exists a tendency that we will forget some of the features of the policies or question its existence. With this in mind, an insurance policy summary attempts to bring clarity to the policyowner within a minute or two. ⏱
Ultimately, my goal is to have a piece of paper that every consumer can refer to whenever they need clarification on their existing insurance policies. Of course, this document does not replace the insurance policy contract. (By the way, I still love policy contract, especially reading it to find out what it covers exactly, as well as its limitations.)
Why I do it
Yes, I acknowledge that the process is tedious. However, it has a very good track record – an insurance policy summary that is done properly can help any individual make prudent financial decision that they are confident with.
It is most compelling to know that I am also a consumer and I will want clarity on my own insurance portfolio. Hence, it is definitely a good idea to extend this value-added service to all of my clients. (What’s the point of keeping it to myself?)
Throughout my career, I have seen so many agents that have joined and left the industry. Whenever this happens, the clients become the victims as they lose their trusted agent. Under those circumstances, they will be counted as lucky if the next agent is experienced and helpful. Otherwise, they will be left to fend for themselves.
With the intention to improve financial literacy, I want to help as many individuals as I can. At the same time, I truly believe that an insurance policy summary that is done properly has the power to enable an individual to make better financial decision.
At the end of the day, my years of experience in the insurance industry is an absolute waste if everything is merely about sales. 🤷🏻♂️
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