Our experience with mortgages has made us aware of the huge sums of money that so many people are paying due to lack of understanding in this field as well. The insurance market in Israel enjoys billions in annual revenues, and here too, the name of the game as far as the insurance companies is “profitability goals.” As of 2015, we have been assisting our clients in saving money on their savings and insurance policies as well.
? WHY PAY MONEY FOR CONSULTATIONS
? WHY PAY MONEY FOR CONSULTATIONS
HOW CAN I KNOW WHAT INSURANCE POLICIES I HAVE AND HOW MUCH I AM PAYING FOR THEM? – A SHORT EXPLANATION OF THE WORLD OF INSURANCES:
The world of insurances in Israel is run primarily by insurance brokers. The brokers are essentially the mediators between the insurance companies and the clients. Over the last few years, a large chunk of the insurance market was “captured” by large agencies (such as Yashir), in which the broker mediating between the client and the insurance companies is whichever phone agent is currently on call. There is no specific agent that can be approached.
While guiding our clients through the mortgage process, we are shocked to discover that one of the highest and least calculated expenses for many of them is their payments on the insurance policies, while in many cases the client had no idea how much he is paying and what coverage he is receiving in return for the huge payments he is making!
The insurance companies use aggressive marketing techniques. Brokers receive a commission for every policy they sell. The commission automatically continues throughout the duration of the policy, so that a broker who has managed to create a large enough insurance “portfolio” can, theoretically, spend his days at the beach while the commissions will continue to be deposited into his account every month on a regular basis. This obviously creates a strong impetus for the broker to expand his portfolio as much as possible. Most brokers work with two or three regular companies. The companies have marketers that are constantly approaching the brokers with attractive offers of high rewards for life/health/LTC insurance policies sold within a month. A diligent agent will usually call those people who trust him most – a brother, cousin, neighbor, good friend – warmly recommend the new policy, and then quickly issue the policy after the client approves, saying “I trust you.”
As far as the agent is concerned – the client got a policy that may well help him in the future, in case of a devastating illness or other tragedy. As far as the client – a new charge will appear in his account and a new report will be sent to his email annually, and he won’t quite know what it is about or whether he may even already have a similar plan among the varied other insurance policies he had purchased in the past.
While guiding our clients through the mortgage process, we are shocked to discover that one of the highest and least calculated expenses for many of them is their payments on the insurance policies, while in many cases the client had no idea how much he is paying and what coverage he is receiving in return for the huge payments he is making!
So What Can We Do?
As part of our guidance and responsibility toward our clients, we would draw their attention to this fact and suggest that they approach the insurance company and ask for a better offer. Once we realized that some of our clients forgo this added investigation due to time constraints, others merely return to the same broker who had arranged their previous policy and make only minor changes – for obvious reasons, while only a small number of people actually investigate and improve their insurance portfolios, we decided to personally offer this service to our clients.
For two years, we conducted a pilot test with a number of insurance agencies to whom we referred our clients, on two conditions: First, the agency must work with all insurance companies. Second, the agent will apply the maximum discounts available in the market to our clients’ policies.
After two years, during which we experienced many disappointments from a number of agents, we decided to conduct the test among the companies ourselves, and verify the improvement of all our clients’ insurance portfolios.
Our goal is to lower the client’s costs and ensure that there are no duplications (such as between the kupat cholim [HMO] coverage and private health insurance). There are a number of factors characterizing the test we perform for our clients and our obligations to them in comparison with insurance brokers:
We deal only with policies in which the potential savings is significant, such as: life, health, LTC insurances and pension and financial savings plans.
We compare between all insurance companies.
We do not “produce” policies upon (reward-based) initiatives by the companies to the agents – we proactively tailor a policy for those clients who are interested, based on the client’s needs and not on the marketing efforts of the companies or on personal relationships with them. We are not directly connected to the companies’ marketers.
With regard to mortgage life insurance policies, since the insurance companies concentrate the main discounts into the first two years, when we compare the price offers of the different insurance companies on behalf the client, we focus only on the first two years of the plan. After two years, we call the client with an offer to refinance and receive a new plan with better terms. This, in contrast to other insurance companies whose goal is to settle on a permanent insurance policy for the entire duration of the mortgage loan, with the monthly return increasing over time –a fact that the client is generally not aware of. In addition, the different agencies do not bother to remind the client that he must refinance, since it is in their interest that the original plan will continue with its higher interest rates.
We are constantly working to ensure that our clients will be aware of the sums they are paying, and be sure that they are not shelling out money unnecessarily.
To check your insurance portfolio free of charge, contact us using the contact form at the bottom of the page, or call our offices: 072-2798830 ext. 4.