Buying life insurance is an important financial planning decision and will positively affect your life and your family for many years, sometimes even a lifetime. It is important to get the advice from a professional insurance agent when you buy insurance because making the wrong decision can cost you a lot of money and grief. Besides, insurance is complex and buying insurance is not something that you are taught in school at young age or can take a course to learn, but is part of a financial planning process.

Buying life insurance is one of the big decisions that have a lasting effect on your life. Most life insurances are valid for at least 10 years and can last up until you are 100 years old, depending on the type of insurance you are purchasing. When you decide to make a commitment for that long, you want to make sure that you make the right decision.

How much time should you take to decide on an insurance that lasts for 10 years or more? We say you should take as much time as you need, definitely not one hour or one day. Do your own research and compare to know what is available in the market. Get professional advice from someone who really knows about insurance. That can be an insurance agent, takaful agent or financial adviser. A good agent or adviser will help you learn and understand what is important for you and will spend the right amount of time to help you make the best decision according to your needs.

Buying insurance is a long-term commitment. That means it is a long-term investment concerning your money. Therefore, you want to make sure you get the right protection based on what you really need. This is also the reason why not everyone can sell insurance. Only licensed insurance professionals are allowed to sell insurance under the regulations by Bank Negara Malaysia (BNM) to protect you from losing your money to insurance fraud.

To ensure licensed insurance professional stay educated and provide consistently good service to customers, Balance Score Card (BSC), an initiative under the Life Insurance and Family Takaful Framework was introduced by BNM early this year. It is to promote a competitive and innovative insurance and takaful industry. The Balance Score Card monitors the professional standard of insurance agents by making sure that their commission matches the quality of service and advice they provided. In summary, the initiative ensures that:

• Agents spend enough time with customers to understand their needs
• Recommendations are long-lasting and persistent with customer’s needs
• Customers have a channel to raise complaints
• Agents continuously spend time to learn about insurance and stay up-to-date for professional development

Insurance is complex because it is not taught in schools and we do not deal with it every day. Also, there are many different types of insurance and it is difficult to keep an overview of all those insurances. Even insurance professionals may have difficulties to keep up to date.

Insurance such as Car and Travel are relatively easy to buy, and many insurance companies offer it online. But when it comes to insurance that we do not buy very often such as life or medical that is more complex, it is important to ask for help from a professional person like an insurance agent or financial advisor.

Take your time, plan well and fully understand what your needs and wants are. A good insurance agent will take the necessary time to ask you the right questions and explain the insurance product thoroughly.

When you want to buy something that you do not know much about, it is always wiser and smarter to take the advice from someone who knows better. Insurance & Takaful agents or financial advisers are the people who are certified and trained to help you buy insurance.

To summarise, buying life insurance is a very important and big decision in your life, because:

• It is for long-term and will last for many years
• It is about your money and
• It is complex and difficult to understand, so get the advice from licensed insurance professionals

Malaysia has over 120,000 insurance agents and financial advisers. Finding the right insurance agent is especially difficult, because of the many specialisations that insurance have. If you are looking to buy a life insurance, you want to find an insurance agent who specialises in Life insurance. You can start of with looking at professional insurance agents and advisers in iBanding’s Insurance Agent Directory. 

In the next article, we describe how you can check if an agent is professional and allowed to sell insurance in Malaysia.