Two personal experiences in the past fortnight. These aren't characteristic of insurance advisers but I need to get them off my chest:
- My wife and I were pitched with insurance recommendations that we didn't ask for. I sat through the presentation for the sake of etiquette and out of curiosity. We were given detailed recommendations. For example, at one point were were told that our requirement for Life Cover was a very specific dollar amount. I found it interesting that this specific amount was the same for my wife and me, because my wife earns significantly more than me, and we have certain debts that would fall on me and not her in the event of our respective deaths. So if we had taken this advice, I would end up in a much worse financial position if my wife died, than my wife would end up in if I died. We were told what the likely monthly premiums would be for the insurance. We were given specific recommendations about the waiting period for our income protection policies. We weren't asked about what the type of lifestyle we want to provide for our loved ones. We weren't asked about what our education goals for our children. We weren't asked about any health issues that might impact our ability to get the insurance or the amount of the monthly premiums. We weren't asked about whether we could perhaps wait longer to make an income protection claim, either because we intend to have money available to cover this issue, or whether our family situation is such that we would have family members that could help us out on a temporary basis. The presentation was slick, and if I didn't have experience in the industry I would probably have taken up the recommendations.
- I met with an insurance adviser in an informal setting. He told me a story about one of his prospective clients. This client is worth many millions of dollars. He is trying to place insurance with premiums exceeding $20,000 per year. I asked him, if the client is worth so much, why do they need insurance? He joked that I shouldn't ask him or his client that question.
No commentary needed.