Ghostin: Here’s What Happens When Your Insurance Agent Calls It Quits

Insurance agents promise to be with you for all time, always. However, life might have other plans in store for them. Find out what happens when they decide to move on and what you need to do.

In the opening credits of all four Toy Story films, Randy Newman serenades the audience with You’ve Got a Friend In Me. This jazzy number with lyrics promising eternal friendship has been heard by billions across the world and is even certified Platinum in two nations. Not bad for the theme song of a kid’s movie franchise.

Something, or someone rather, who also promises eternal friendship and would gladly certify themselves Platinum would be your financial advisor. And why wouldn’t they? The policies recommended by them are usually valid for decades, if not a lifetime. Think hospitalisation plans, life insurance, endowment policies, the list goes on.

Unfortunately, life isn’t always easy to predict. Your trusted insurance agent might decide it’s time for a new career or a new company. Also, he/she might pass away should anything untoward happen. After all, they’re only human. For policyholders, here’s what you need to know should your financial advisor decide to call it quits for one reason or another.

• What happens to my insurance policies when my agent quits?
• Who’s my new insurance agent, then?
• What can I do if I foresee this happening?
• What if my insurance agent joins another company instead?
• What if my insurance agent passes away?
• What if I’m a corporate client instead?
• Conclusion

What happens to my insurance policies when my agent quits?

Fortunately, your insurance policies remain intact if your financial advisor leaves the company. That’s because your policy’s contract is an agreement between you and the insurer, not the agent. The insurer will honour the policy as long as your premiums are accounted for, no matter if the agent is terminated or resigns.

However, a 25-year-old financial advisor, who prefers to remain anonymous, told SingSaver that it isn’t that simple. “The policy is under the company, but the agent is the one who services it. This ‘servicing’ can come in different forms, like finding out information or working on claims”, he says.

He adds that your insurance agent is key for the latter, depending on their network and experience in the field. They help expedite the claims process and make appeals, amongst other things. Therefore, responsible agents seek out colleagues in the same agency who’re willing to take on their soon-to-be ex-clients before leaving.

Who’s my new insurance agent, then?

This brings us to our next point. Not all agents are responsible to the extent that they’ll seek out willing colleagues to take on another set of clients before taking time out to inform said clients that they’re moving on. Heck, some financial advisors might not even bother informing their clients that they’re calling it quits.

In this event, the agency’s management will decide who takes on this set of clients before giving them the necessary information through a letter. There’s a catch, though. “Most of the time, you’re not contacted by this new agent. Occasionally you are, but this really depends on him/her”, the same financial advisor says.

There’s a reason for this. The new insurance agent who takes on your portfolio doesn’t stand to gain much other than additional work. Although he/she receives the remaining commission if it hasn’t been fully paid out to your ex-agent, it’s usually not much. There’s also the chance that your new financial advisor won’t be able to sell you anything, especially if you’re well-insured.

What can I do if I foresee this happening?

As they say, knowledge is power. The same financial advisor advised individuals to register for an account on their insurer’s online portal. “It’s very simple to do so and you’ll be able to see what policies you have, at the very least. And if you purchased your policies recently, all your contracts are even stored as electronic copies now”, he says.

He added that several insurers will send you a summary of policies that you have purchased should you request for it, but this depends on their digital capabilities. The second thing you should do would be to check on your Integrated Shield and accident plans. This can be done by simply logging on to the CPF Board portal and heading over to the My Messages tab.

The final thing you can do, he says, would be to seek out another insurance agent from the same company that you can trust. You can start by asking for recommendations from your relatives before reaching out to your friends.

What if my insurance agent joins another company instead?

On one hand, there’s not much that can be done. No individual in their right mind would surrender their portfolio with an insurer just to support their agent who has joined another firm. This rings especially true if they have purchased policies such as whole life insurance, ILPs, or endowment plans.

On the other hand, agents might weaponise the goodwill they have generated with their ex-clients and bring them into the fold. More unscrupulous advisors will convince their clients that their current insurance portfolio is inferior to what their new company can provide. Cue a wholesale surrender of policies and the unnecessary purchase of a brand new set of plans.

Should your current agent decide to join another company, it’s in your best interest to follow your mind instead of your heart. It’s usually detrimental to surrender the policies that you have with your current insurer, even if there aren’t any premiums left to pay. Do your research before determining whether it’s really worth the switch. After all, you’re the one (literally) paying for it.

What if my insurance agent passes away?

As grim as it sounds, you are in safe hands should this unfortunate event happen. It’s almost identical to your agent resigning from the company or getting retrenched, as discussed above. You’ll be assigned a new insurance agent who’s in the same agency and life goes on, at least for you.

However, if your insurance agent is an independent advisor, you’re in a bit of a pickle. Your policies become orphaned, which means that there’s no one servicing them. Although the insurer will delegate these to an agency, it’s not instant. You might need to make claims in the meantime, which could be harrowing if you don’t know what documents are needed.

Although this is unlikely to happen, it highlights how important being aware of your own insurance portfolio is. Not everything should be left in your insurance agent’s hands. With the industry rapidly going digital throughout 2020 and 2021, there’s little excuse to keep yourself in the dark when it comes to the insurance coverage you’ve purchased.

What if I’m a corporate client instead?

For businesses, insurance policies are renewed on an annual basis. This includes insurance for commercial property and general liability, amongst others. Should your agent quit the company before it’s time for policy renewal, your firm’s portfolio gets assigned to another advisor from his agency. It’s exactly the same process as personal insurance policies.

Fret not if you’ve purchased a policy from an independent insurance agent. If he/she quits, you can still liaise directly with the insurer. Hotlines for corporate insurance policies do exist, making it easier for businesses. However, the same financial advisor SingSaver spoke to highlighted why insurance agents are important for corporations.

“There are limitations to what an insurer’s backend staff can do, causing the whole process to be much slower. It's much better to have an agent that you can call upfront for claims and other matters than having to wait 3-5 working days for an email reply that might not even answer your question”, he says.

Conclusion

It’s scary when your insurance agent quits, especially if you’ve been in close contact with him/her for years. You’ll need to spend time sharing your financial situation and goals with a new agent and hope that he/she will be on your side when the time comes. And if this new agent quits within a handful of years, it’s back to the drawing board with another bloke.

However, there is a silver lining to this. Your new insurance agent might prove to be better than your previous one. He/she might be able to identify gaps in your coverage that your previous agent didn’t manage to spot and recommend the right policies to patch the holes. It’s a win-win situation for both parties and further incentivises your new agent to keep in touch with you.

Singapore’s insurance industry might have a high turnover rate, but that doesn’t mean you can’t do anything to safeguard yourself. Equip yourself with as much information as possible, especially as the sector rapidly digitalises. That way, at least you won’t be caught unaware should your agent leave for greener pastures.

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