Don’t Fall For This Insurance Agent "Trick"
The TL;DR is at the bottom, so jump there if you don't want to see my amazing story telling skills.
I am just minding my own business walking around when I am suddenly approached by this cute girl.
Quite tall, slim build, nice tan and quite cute. Why got cute girl come talk to me? I spot the lanyard "ABCXYZ Insurance".
Chey. Insurance agent. No wonder. The more cute they are, the more careful you must be, I remind myself.
I insist that I am a damn hard sell and there is a very low chance that she can sell me anything. She persists. Just listen only, no need to commit. I shrug.
Her opener is not bad. She ambiguously described this product until it sounded damn good. She asks for 2 minutes of my time. I was actually early for my next appointment, so okay what the heck. Let's see what sort of "product" this is. See guys, I suffer and tahan insurance agents so that you all don't have to waste your time. (It TOTALLY has nothing to do with her being cute)
Okay, I sit down at the table. Aiyo why all the other tables empty? Why only got me? I'm the only stupid fella that kena tricked into the lion's den?
Suddenly the agent appears from my left. Eh wait, she looks different?! More mature looking (but still young), shorter hair and even more tan, but I can easily tell that she is also still the kind that must be careful. Senior insurance agents got more experience "dok" people. This one must be careful. I cannot let my guard down.
What happened to the agent that talked to me? Don't tell me that this is a bait and switch... not that I really mind since this agent also seems quite pleasant, if you know what I mean... plus since I'm just killing time...
Then the original agent popped up from my right. Walao, what is this? Double team? 2 insurance agents vs 1 GMGH? Unfair matchup! Nevermind, GMGH is strong, GMGH will listen. I have defeated insurance agents before, I can do it again if I have to!
Anyway, from here on I will refer to them as Senior and Junior.
Junior introduces me to Senior. Both have English names. Should be easy to remember.
Senior quizes me on bank deposit rate. 0.05%, nailed it.
Senior quizes me on my bank interest rate. 1.85%, nailed it. (OCBC 360)
Senior says OCBC 360 interest is only up to $60,000. I correct her that it is $70,000.
Senior then talks about the product features and the different product options.
I have already forgotten both their names, dammit.
Junior just sits beside me and keeps nodding her head. I worried it might fall off.
Senior says that "with bank interest rates so low and inflation rate being 2.6%..."
GMGH almost triggered.
GMGH clears throat and Senior stops talking. "Erm, inflation rate is NOT 2.6%?"
Senior looks confused. Junior jumps in for the save. "Yes, inflation rate is 2.6%!"
GMGH GETS *TRIGGERED*
GMGH looks at them blankly. Then replies firmly, "Er. No. Inflation rate is definitely NOT 2.6%."
This goes on back and forth for a bit. I can tell it is going nowhere.
"Inflation rate is not 2.6%. It is 0.7%. You guys are both wrong. Inflation has been negative for the longest time. Inflation at 2.6% is an impossible number. Where do you get your 2.6% number from?"
Both are a bit stunned. Junior volunteers to fact check. Senior continues to explain to me the product. She is doing a pretty bad job.
In case anyone was curious, it was a regular savings endowment plan, participating plan, no guaranteed returns, only capital guaranteed. Just more complicated than usual with its withdrawal features.
Senior confirms all these facts. Senior continues to explain how I can make withdrawals from my plan if I need to... go on a holiday with my girlfriend. Geez. That was the example she used! I'm not sure what kind of financial lifestyle she is advocating... but it is definitely not the prudent lifestyle. I can see how dumb millennials would fall for that though. Anyway, the number which she kept using over and over again might as well be pulled out from her butt since it isn't guaranteed
Junior finally reports back. It must have been tough to type "Singapore Inflation Rate" into Google. Apparently we are both correct.
"Both correct?", I choke, half in disbelief, half in confusion.
Historical inflation rate is 2.6%. Latest yoy inflation rate is 0.7%.
Oh. So we are both correct? LOL. Is she freaking kidding me? Deep down inside, unless they are both super goondu and don't really understand what inflation is, I think that they both know that only one of us was right.
(Hint: It was me)
They change topic. What is my profession? How come I know so much about inflation rates and financial products?
Part of me is secretly happy that they find me a challenge. Part of me is also sad knowing how many people would not be able to defend themselves from such an attack. Let alone an attack by 2 cute female agents. Jialat. This floor underneath where I'm sitting at must have a lot of spilled blood from all the previous guys that sat here before me and kena "dok" by them.
Anyway, they tried their best but they could not succeed. I could tell they were a bit disappointed. They did just
Damn. 15 minutes already? Basket, I thought only 2 minutes! Kena scammed already, haha.
I thanked them for their time and I showed myself out while they both just sat in their seats trying to figure out what just happened. They literally just sat there and stared at each other.
I'll tell you what just happened.
I wonder if they honestly did not know the current inflation rate, or if they were just acting like they did not know. Oh well, we will never know.
I check my watch. Just on time for my appointment. It's going to be a good day.
TL;DR - Insurance agent gave FALSE information that the inflation rate in Singapore is 2.6%. That figure is actually the average inflation rate since independence. The actual inflation rate (CPI-All Items) is 0.7%. Historical average inflation rate is NOT an useful figure.
Why is this a problem? By giving such a big (and false) number, especially when compared to the current low bank rates / fixed deposit rates that most of us are familiar with, it scares and shocks people to quickly take action because the difference seems so huge. However, they would be taking action based on false information.
Is this ethical? I think not. But then again I think close to no one gives a shit.
Are they "wrong"? Oops, they forgot to say "average". You're the one signing the piece of paper to sign away thousands of dollars every year. Whether it is a good policy or a stupid policy, it is up to you to decide since it can potentially become YOUR policy. You better understand what you get yourself into, or you're going to end up literally paying for your mistake.
Source: Average Inflation Rate in Singapore since 1962 tracked by Trading Economics
Source: Feb 2017 y-o-y Inflation Rate published by MAS
Fun fact: The CPI-All Items was negative for almost the 2 years.
I prefer using the CPI-All Items because.... it tracks all items? Be my guest to use MAS Core Inflation if that suits you.
Recommended reading to level up:
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