Have you ever wonder how do you compare a life insurance based on cash value? Why would you want to compare? The reason why you want to compare it is to give yourself a clearer view of how a life insurance is based on the cash value and it gives you an idea what kind of payments you would use to pay for your insurance.
For a life insurance based on cash value, there are factors such as the distribution cost and charges or policy fee that will be involved in one way or another. Its always the case, the amount you pay higher, you will get lesser in return. It applies the same concept. Cash value would be lesser if distribution cost/ charges/policy fees are higher. Usually, it depends on the company on how would they want to charge you.
One advantage is to check whether is there any bonuses involved. You can find it our by asking your agent or the company to see if there’s any bonuses included in the plan or the company do offer bonuses. A co-operative concept plan would give the bonuses usually to one more compared to another.
Whenever you read the newspaper or the e-news, you might have come across the phrase “ distribution channel”. Any idea what does that refers to?
Distribution channel refers to the insurance company doesn’t take the risk on its own. Usually they distribute the risk to other re-insurance companies. In exchange, the risk came in as a cost fact when the insurance a company engages actuarial and under-riders.
A product that is developed from actuarial and under-riders will then further be distributed by the company in different channels to the agents or financial planners before to the customers.
This process of distribution channel form the company via the financial planners to the customers comes in a few ways:
1. Agency
Managers will distribute the financial product (e.g.: Insurance) to the supervisors before they assigning to the agent. The agent will then source out their customers before advising and selling them the product. This cost naturally will come in through the over-riding from one to another.
2. Company
They will distribute their customers directly via the financial planner.
3. Brokers
If customers require advise or information from the brokers, they will charge them a profession fee.
4. Company to full time staff
Company will assign the full time staff to advise on the customers in whatever doubts they have.
All the above factors are cost factored in and will affect the total cash value that the customer will require to pay before they are able to seek some advise from the professional.
The cost can all differ by having the agents to allow you to save the time and reduced the suffering when come to choose an ideal plan for the customers that will suits to their needs.
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