money no enough?

in the common singaporean identity and aspiration to acquire the 5Cs (or more), namely condo, car, cash, credit cards and country club membership (in random order), i've noticed there is an unchanging statistic in all the years that i've been in the financial industry and it is the fact that by and large, our population remains grossly under-insured.

despite boasting of many accolades being bestowed upon our tiny red dot nation and people, i've always been intrigued as to why a human being's life is not similarly valued in dollar terms, with regard to insuring ourselves.

take for example the latest statistic from the lia (http://www.lia.org.sg/node/2923) where we see the total claims of $3.69 billion being paid out up to the latest quarter till sep 30, 2011. of these, only a mere $342 million or 7.3% were paid for death, disability and critical illness claims. in other words, the majority of claims or $3.34 billion were paid for policies that matured.

my comments:

from speaking to many other advisors and tied agents, what i've unearthed is that there have been many reasons given by consumers for not taking up insurance.

perhaps the chief of these reasons is the most common refrain of 'money no enough' to buy insurance.

i interpret this line of reasoning to be the plain and simple 'objection' which is one of many red herrings given to the financial advisor.

but what is actually the real issue behind this 'objection'?

my thinking is that the consumer has not really assigned a priority to his/her protection needs and have simply been driven by this universal denominator which i term as instant gratification.

first on the list is the grouping of consumers going after the big ticket items like condos and cars, often borrowing to the hilt to finance these die-die must-have purchases, often to keep up with the in-crowd, or in local parlance, "kala tidak apa, tapi style mesti ada".

next will be those who indulge in the rather expensive cravings for both alcohol and tobacco, these will not only take away many dollars from the so-called budget to fulfil other needs but is also damaging to one's health (have u tried preaching it to this group of people?). i personally have met many prospects who are not casual but chain smokers, needing 2 packets of cigarettes daily to satisfy their nicotine urge which could easily translate to a high three-figure monthly expenditure. ditto for those who guzzle down alcohol in the same way as we drink water to exist.

and consumers chasing social activities like clubbing, movies, reading, etc, can easily create a hole in their wallets/bags. i know of a prospect who chases every 3D movie and pays the highest ticket price to enjoy them at the only cinema hall in town to be totally immersed in the imax experience.

how about those with an appreciation for fine dining or in my book, foodies, without nary a second thought on splashing out 3 or 4 digit sums to satisfy their palate on a regular basis.

and i also know of yet another prospect who must spend her vacation abroad several times a year just to de-stress and get away from the so-called rat race.

and the above listing is by no means exhaustive but serve to illustrate that 'money no enough' is not the real reason for not taking up insurance, not unless the person or family is surviving on our government's many assistance schemes.

and therein is the challange for every financial advisor to help consumers to re-align their priority to firstly, wealth protection planning and then, to satisfying other needs/wants.