By: Adrian Khiat
When I was a tied agent, I often thought that premium of similar coverage from different insurance companies should be somehow similar. Pricing difference are expected but shouldn't be too far apart. I thought that the market is efficient enough to identify rapidly if a plan is over or underpriced. I thought the market is somehow competitive and Insurance companies should be pricing their plans approximately the same. But I was dead wrong...
I had a busy weekend making plans comparison from different insurance companies. I realised the difficulty in comparing plans because insurance companies like to attach some features unique to the plan. By doing that, they can price their plans differently as nobody will know how much the unique feature cost. Its up to the Adviser's capability to sell on the unique feature which normally come at a price. This is normally the case for Traditional Policies like Whole Life and Education Plans.
To make a more direct apple to apple comparison, I decided to illustrate a Critical Illnesses Term Insurance here. ust to quote an example of a 30 yrs old male getting a 30years $250k CI, death, PTD coverage. The lowest I get is $1,084.60/yr and the highest I get is $1,854.00. The rest are in the region of $1,300 and $1,400. Some are guaranteed renewable, some are not. There are some difference between each plans but not as complicated compared to Traditional Policies. Read more...