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Planning on becoming a financial advisor? Aspiring financial advisors/insurance agents need to pass the insurance exam administered by the Insurance Commission. Most people fear that they will not pass the insurance exam so we created this blog to help you increase your chances of passing the insurance exam for financial advisors.
Types of Financial Advisors
In the Philippines, there are financial advisors who:
- Life Insurance Agents – They sell life insurance products
- Investment Agents – They sell pure investments like mutual funds and UITF
- Non-Life Insurance Agents – They sell car insurance, property insurance, surety bonds, pet insurance, etc.
- Health Card Agents – They sell HMO (Health Cards)
*If you want to know how to become a health card agent please click here.
Types of Life Insurance Examination
There are two types of examination that insurance agents need to take:
1. Traditional Examination – this examination is mainly about the following:
- Definition of Life Insurance
- Types of Insurance
- Insurance Companies
- Services of Life Insurance
- Basic Life Insurance Terms
- Plans & Riders
- Underwriting
- Policy Provisions
- Quality Business
- Code of Ethics
2. Variable Examination
- Introduction to Investments
- Risk and Rewards
- Key Considerations Before Investing
- Types of Investment Instruments
- What is VUL
- Single Premium VUL
- Basic Transactions of VUL
- VUL vs Traditional
- Code of Ethics
First Things First
Initially, you have to select the right team to join first. When you are looking for a job, one of the first considerations is the amount of salary you will be paid. Why work for a company that will only pay you 15,000 salary when you can be paid 65,000 salary for example?
In the same way, you have to ask how much commission are you going to get if you sell a product from that company. In that way, you will know if you are properly compensated or not. In this blog titled “Which Life Insurance Company Pays the Highest Commission Rate” we explore which company gives the best benefits for financial advisors.
You may also check my article on: “Best Life Insurance Company In The Philippines To Be A Financial Advisor”
Which one should I take? Traditional or Variable Exam?
Most likely you will be taking the Variable Exam first since most products now that are being sold in the Philippines are variable products or products whose returns are based on the stock market or bond market.
However, you can also take the traditional exam if you are into selling whole life, term insurance, group insurance products or health insurance (non-HMO related) products.
*If you want to know how to become a health card agent please click here.
Non Life Insurance
If you are also planning to sell non life insurance such as property insurance, car insurance, cargo insurance, pet insurance and more… you may also join us. As an Aetos Financial Advisor you can be able to offer the following products to your family and friends:
If you want to offer non-life products and pet insurance products, please take the Are you Fit To Be A Financial Advisor Quiz now.
Pure Investment Products (Mutual Funds and UITF)
Sometimes, some clients have short-term goals like saving for a car in the next 2 to 3 years. Having a license to sell Mutual Funds or UITF is good because it allows your clients to save for shorter-term goals. Insurance-based investments (those that are not purely investment products) have early withdrawal fees and insurance charges that are being deducted from the investment. For this reason, it is good to also have a mutual fund or UITF license.
If you want to offer mutual funds and UITF products, join Aetos Financial by taking the Are You Fit To Be A Financial Advisor Quiz now.
Life Insurance Exam Preparations
Since we are not sure of the exact details of what other teams are doing, for this blog we will discuss the preparations that we do in our team at Team Aetos.
The level of preparation you need will depend on the type of exam you are going to take. Most financial advisors take one exam first. Some financial advisors take both traditional and variable all altogether.
The Variable Exam is more technical investing and has computations.
The Traditional Exam is more focused on legal, insurance, and ethics.
Both examinations are all multiple choice and have a total of 50 questions to be completed in one hour.
To prepare for this exam, our financial advisors take the online video reviewers and take the mock exams on our team’s website. Each batch of mock exams below has 50 questions. There are 8 mock exam batches available on our website at https://euniv.financeph.com.
Staying Positive
Most of the time you will feel scared that you will not pass the exam. Don’t be discouraged. Just keep on praying, keep learning, keep studying. If you took the mock exam and passed it, most likely you will pass.
The Examination is Just the Start of Something Greater
Passing the examination may be a great accomplishment for you but the greater battle is in your actual performance. Most financial advisors even after getting good exam grades, do not even get to sell at least one insurance/investment. Others pass the exam yet do not even understand the concepts of insurance and investing because they only studied the multiple choice mock exam but did not try to understand the concepts wholeheartedly.
For me, based on my experience as a financial advisor for more than 10 years now (since I was 21 years old) and having my own insurance agency, I was able to train different types of candidates. I noticed that those who succeed are not those who are very good in the insurance exam but those who persist even when it seems difficult.
I wish you all the best in the insurance exam. I pray you will be successful as a financial advisor.
If you are not yet sure if you want to become a financial advisor, just give it a try. Who knows this might be your calling in life.
The first step to becoming a financial advisor is to know if you are fit to become a financial advisor.
Next Step: Take This Quiz To Know If You Are Fit To Become A Financial Advisor
ABOUT THE AUTHOR
Mark Fernandez, CPA, RFC, AFA, CWP, CEPP started as an insurance agent/financial advisor right after graduation at age 22 while working as an auditor at SGV&Co (Ernst & Young). He worked as a part-time financial advisor for six months before going full-time. Despite having no insurance background or connections, he became a Million Dollar Round Table member (MDRT) at age 23 due to his perseverance to learn more about the world of investing and insurance. He is currently a life (at least 10 years MDRT) and qualifying member of the MDRT and is a 2022 Top of the Table Member. He is the founder of Aetos Financial Insurance Agency Inc, which has its head office in Makati. Aetos was the Top 1 in terms of FYP and Top 5 in APE in life insurance agency rankings nationwide in 2021. Currently, Aetos has operations and financial advisors in Luzon, Visayas, and Mindanao. He is currently completing his master’s degree at the Asian Institute of Management. You may reach us by calling Aetos Financial Office Landline at 02-8789-9128 or contacting our Hotline at 0905-FINANCE or 0905-3462623.
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