I had a conversation with a cleaner. Obviously she isn’t very wealthy. As her son likes to play sports, she asked me whether is there any thing that can cover personal accident.

 I immediately told her that the most fundamental and important coverage to get is a hospitalization benefit. Later on in the conversation I discovered that a bank has sold her an endowment policy. Immediately I knew that she is into budget problem because of that useless endowment that was recommended to her without any needs-analysis. I felt pity for her to be rip-off by the salesman. I gave her a quotation on how much it takes to cover her son with a good hospitalization shield plan. But it seems she cannot even afford it due to the heavy commitment to that endowment policy. She is really poor. It is well-known that I have an axe to grin against insurance salespersons (note: I have no axe to grin against ALL insurance salesperson. I am also an insurance salesperson BTW). Why?

Unlike many other things, people buy insurance because of wanting to transfer risk. Academically speaking, insurance is about transfer financial risk to a 3rd party via a contract. Emotionally speaking, if the insurance product bought could not “deliver” the intended purpose, the family or person will be both emotionally and financially devastated. The devastation can cause much suffering and hardship and even affect future generations. For example, if a parent is not well insured and as a result have great financial difficulties the children may have to stop schooling early in order to support the family. Therefore, there is always a very strong element of ethics and professionalism required on the adviser who sells the product. Just as it is an unethical doctor or lawyer can destroy their clients terribly, so an insurance adviser who is unethical can ruin his clients.

Back to the cleaner’s case, I felt pity for her being con by the bank. I know that bank sells a good hospitalization & surgical benefit plan. I know this because I actually had a client (before knowing me) who bought the plan from the bank! But these days the bank don’t sell this kind of low-commission product. They have no time to do fulfill  underwriting requirements. Based on partial information, I already knew that the cleaner’s family needed a good hospitalization plan. But she and her family have none. They have no budget for one either. All thanks to that unethical salesperson who sold her something expensive that she has no need. I felt that salesperson has no conscious at all. The poor cleaner already got so little money, still want to suck until the blood run dry?

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