I REFER to last Wednesday's report, 'Relook incentive system, MAS urges life insurers,' in which the Monetary Authority of Singapore called on life insurers to re-examine their incentives for agents, citing inadequate coverage people have bought.
Insurers make profits by selling more. To motivate agents, insurers reward them by the amount of sales they lock in. Agents are not rewarded based on how much they have helped their clients.
The solution is to educate people in personal finance. Teach Singaporeans how to shop around for the best deal instead of believing everything the agent, who is often a friend or relative, says.
Teach the value of thrift so Singaporeans do not spend beyond their means. Encourage people to save and invest so CPF savings are not the only thing they have to fall back on in old age.
Teach personal finance in school as it is much more useful in life than geography, chemistry or physics.
