Archive | July, 2013

The Sequis Difference (part 2)

22 Jul

As a consultant, I find it necessary to learn about my competitors products. It is important so that if my clients have some queries regarding my products and comparing it with our competitor products, i can at least have a say about it and give my client the best information i can get.

In my humble opinion, being a consultant is not just about what you know, but also who you know. Many customers are being ripped off just because they can’t get access to the right resources to get the right information. Thus, as a player in the life industry, i always try my best to keep in contact with other agents from other companies. I may not be able to study all insurance products but by having a network of agents, i can get the best information from the best people in the industry.

Now, talking about The Sequis Difference, i just recently comparing Sequis Life proposal with Prudential proposal. Both are unit linked products, both are giving a whole life protection. The basic unit linked products being compared are Sequislife Protector Plus 85 and Prudential Pru Link Assurance Account.

Some of the Basic Program Differences :

1. Basic Program Coverage

a. Sequislife : Life until 85 years old

b. Prudential : Life OR permanent disability until 99 years old

2. Insured Person Entry Age (Cost Base)

a. Sequislife : using the current age except if the current age has past more than 6 months, the cost base will be using the coming age. e.g., if the current age is 29 years and 3 months, Sequislife will take 29 years old as the entry age. If the current age is 29 years and 7 months, Sequislife will take 30 years old as the entry age.

b. Prudential : using the coming age. e.g. the current age is 29 years and 3 months, Prudential will take it as 30 years old on their illustration.

3. Premium Composition

a. Sequislife : Regular Premium + Regular Top Up. Regular top up is a prerequisite in the premium composition which means there has to be an investment value from the very beginning.

b. Prudential : Regular Premium + Regular Top Up. Regular top up can be left empty which means it is allowed to have no regular top up investment at all.

4. Acquisition Cost

a. Sequislife : For regular premium (Year 1 – 100%, Year 2 – 65%, Year 3 – 45%) and for regular top up 5% all the way.

b. Prudential : For regular premium (Year 1 – 100%, Year 2 – 60%, Year 3 – 15%, Year 4 – 15%, Year 5 – 15%) and for regular top up 5% all the way.

5. Investment Cost

a. Sequislife : 0,75% for Rupiah Cash Fund, 1,25% for Rupiah Stable Fund,  and 1,50% for Rupiah Equity Fund, Rupiah Managed Fund & Rupiah Syariah Balanced Fund. Investment Fund Managed by Schroders.

b. Prudential: 0,75% – 1,75% per year. Investment Fund Managed by Prudential.

6. Administration Cost

a. Sequislife : Rp.40.000,00/month

b. Prudential : Rp.27.500,00/month

7. Insurance Cost

a. Sequislife : Insurance cost will be charged monthly. For the first year, the insurance cost (including insurance rider) is waived. Except for insurance rider SQEPCIR and SQCIR, on the first year will be charged 50% of the full amount. All clearly written in the proposal.

b. Prudential : Insurance cost will be charged monthly.  Important Notes : As there will be no unit created from the regular premium in Year 1 and unit created from regular premium in Year 2 is not sufficient to pay the cost of insurance and cost of administration, thus those cost will be declared as liable cost which will be paid from any unit created from the regular premium, regular top up (Pru saver)and single premium top up (if any), starting from the 25th month. All clearly written in the proposal.

Now, finished comparing Sequislife and Prudential unit linked products, what have i learned?

Having an almost identical proposal from both companies, this is what i can tell :

With Sequislife, on my First Year, if I dediced to close my account, 2 things will happen :

1. Sequislife will close my account, then

2. Sequislife will give me back some cash i.e. the value from the regular top up unit created.

With Prudential, if my consultant use his power to empty out the regular top up section with what commonly said “to increase my protection(???)”; If I dediced to close my account on my First Year, these 2 things will happen :

1. Prudential will close my account, then

2. Prudential will send me a letter, requesting me to pay the company the cost i owe them which is my first year administration and insurance cost.

Most people can’t comprehend this situation. What they know is that they are paying an insurance premium. So if the insurance company is asking to pay the liable cost, they don’t understand how did it happen. With this short explanation i hope many agents will learn to change their way of explaining their products; as the important things has been clearly written in the proposals but so many people including the agents are ignoring it.

The way of saying increasing my protection that means increasing my regular premium and empty out my regular top up is just not right. Even more those agents that think by doing this they are giving the clients a traditional products; honestly, I am worried. Hopefully my time comparing and typing it here can help some self learner individuals to start learning to COMPARE BEFORE YOU BUY. Be a SMART buyer.

Steviani, CPA, CFP®, 2013 Sequislife ICON, MDRT.