How To Make Money & How Much Money You Will Make As Unit Trust , Insurance Agent

Posted by Kris | Thursday, March 10, 2011 | | 13 comments »

I got a request by a fresh graduate on what the normal ways you can make money in Malaysia. Life is getting tougher and harder in Malaysia to make a decent income to survive. The jobs can be part time or full time. Here are the typical jobs you can get part time to make tons of money provided you are hardworking in it. I will give some information based on my 5 criterias.

1.Mutual Fund / Unit Trust Agent

Description: You are in charge to sell investment products such as mutual funds based on equity, savings, bonds to customers. Usually, you can only be represent a single mutual fund entity. You will need to sit an paid examination to qualified you as a mutual fund agent in the unit trust industry. Time to put on your thinking cap. (see link below) And renewed your licence yearly by paying a certain sum of subsription fee. 

How To Know Your Mutual Fund Agent Is Real??

What You Need To Do: Sell investment product based on unit trust and mutual funds that consists of equity, savings, bond based. Equity is for your aggressive clients while bond & saving is for your timid/risk adverse clients. There a wide range of products to sell. Your job includes helping them to switch funds besides buying and selling the unit trust according to clients' wishes.

How Much You Earn: You earn based on commission. Roughly 3% of any mutual fund amount you managed to sell. Furthermore if you still can earn draw commission from any agents at your downline. But the amount is surely less than 3%. But don't underestimate the power of your downline agents. You can climb up to "manager" level that requires you to train up and get more down-line agents. The more they sell, the more you earn!!

PROs: A lot of people don't have the time to invest in stocks which is more lucrative provided you know how to invest. It is a good investment for older generation that does not know how to invest or look at stock charts. For fresh graduates whom don't have a huge capital to invest in stocks or even the property market. Basically, the pool is big if you look hard enough and you can make some serious dough.$$$$$

CONS: 3% commission is very low if you are doing like RM30K sales per year which is only RM900. And you need to fulfill a yearly sales quota so that you can renew your licence. So you need to make as much sales as possible if you are doing full time. If not RM30K sales per month is also not sufficient if you are doing it full-time.

Btw, you only earn the commission when only you sell the product aka the customers buy it. You don't get any commission when the customer ask you to sell the unit trust. You do get commission again when they switch their unit to equity based unit trusts because they get charged another 5.5% fee. So you need to keep pushing the BUY BUY BUY button to your customers. 

Dollar averaging technique is a good method to encourage customers to continously buy unit trust to ensure your income stream is continuous. So those interested go ahead to learn more about the dollar averaging technique. Even the market is bad, just use dollar averaging there is data to back you up that shows this technique will generated profits when the market rebounces.

Your Competitors: You need a wide network. People only buy from those that they know well and trust as this involves $$$. Besides, there is a lot of agents out there. But your biggest competitor is NOT even HUMAN. This machine is selling their products at a much lower service charge.!! See below. 

2.Insurance Agent

What You Need To Do: Sell insurance policy to anyone out there. You can sell life policies, endowment schemes, saving plan cum insurance plan or even fire insurance to insure building. The possibilities are endless as most things can be insured as long the client is willing to pay the necessary premium in tandem to the risks.

How Much You Earn: The most lucrative is selling life insurance policies. The more the amount insured the higher your commission is. How is the commission system based of?? There is no website at any insurance company that show you how much you earn. No worry, KnowThyMoney will tell you how much commission you earn.

Here is the tip:
1. Higher yearly premium your customer pay MEANS HIGHER commission.

2. You get most of your commission in stages , usually 5-7th years will be your golden years. Each year the amount varies. Here is a rough estimate. Below is the percentage of commission you get based off the yearly premium.

Table 1
1st year   ------> ~57.25%
2nd year  ------> ~57.25%
3rd year   ------> ~24%
4th year   ------> ~24%
5th year   ------> ~19.25%
6th year on wards until your client cancel the policies -----> 5%

So total commission is 181.75% of total yearly premium. The amount is might be lower than this as some of the percentage needs to go to the insurance company also. They need it to buffer against their risk as they are the one insuring your client.

So you manage to sell like RM100K yearly premium life policies , you will get in return RM181K (plus minus some percentage) as commission. If the percentage for the company is 81.75%, you still get 100% commission :) Not bad deal.

How To Find Which Insurance Company Offers The Most Attractive Commission?

I have a assumption is that to avoid too many people pilling up to be an insurance agent the commission rate is not well advertised. Well no worry. Here is another tip.

Open your insurance policy. Just flip through it to the section that shows you the "ALLOCATION OF PREMIUM or UNITs". Here you will see a similar table as above.

Table 2
1st year   ------> 42.75%
2nd year  ------> 42.75%
3rd year   ------> 76%
4th year   ------> 76%
5th year   ------> 80.75%
6th year on wards until your client cancel the policies -----> 95%

Eh..for those that have a sharp mind. You already figured out that the above actually correlated to Table 1. 

It is exactly Table 2 xth year =  (100% - value of Table 1 for xth year).

So what is this allocation of premium/units means???

This allocation of premium/units means that the amount of yearly premium that your client pays that will go into their insurance policies's cash surrender value and the amount paid to cover themselves. 

You have cash surrender value because the true rate needed to insure lets say RM100K in death benefits are actually RM100++ per year for a 20-30 year old. The true rate charged depends on the age and risk profile.  Again just look at your insurance policy that clearly states this out.

Again some money are needed for the insurance company taking in your risk for the 1st 5 years where they just collected a small amount of premium to take a RM100K risk. Here it is  a probability game. I don't expect all 20-30 years old in the whole world that just took a RM100K policy at the 1st year to DIE in the 2th year.

PRO: Everyone needs a life policy sooner or later as coverage. Your target pool of client is endless. Insurance products also covers education and saving scheme which you can ply to your clients. It is an industry that you can become millionaire from ground ZERO. You don't need any degree or diploma to become an insurance agent. YOU just need to WORK VERY HARD!!!

CONS: Your percentage of commission drops after the 6th year where it just goes to around <5%. So you must always seek find more and more clients to take up new policies. Best case is to ask your existing client to buy more insurance coverage or get a brand new policy after the 5th year. 

Another strategy is to encourage the young (20-30 yr) to take up coverage. Their risk profile is lower. So make sure you mix well with young people. Young people are easily insurable as they are disease free and hence lower risk. Just approached them when there are just out of university around 23-24 years old.After 5 years when their career have matured , approached them again to buy new policy (a new policy earns much more commission) so that you can earn 2x of the yearly premium.

Don't go for old people. They are harder to insure and you get tons of headache when medical claims come in for their multiple illnesses. Young people are easier. You have at least 20 more years when they reach their 40-ties when they start to become problematic. 

Hopefully, in the 20 years you have already become an millionaire and able to retire young from working.

Btw, there is NON-Human competitor as compared to the mutual fund / unit trust agent. However they are tons of people motivated enough to grab the opportunity to sell policies to your target group. So you need to be very aggressive to make your MILLIONS and retire from the industry in 20 years time. P.S or even faster, if you are a top producer.


  1. ChampDog // 10:19 PM  

    The best ever sharing that I have read so far on unit trust vs insurance agent. Looks like the decision is pretty obvious. No wonder I have so many relatives are insurance agents! :)

  2. Kris // 6:18 PM  

    I also bet that insurance agent seldom discusses about their commission :P

    Money seems to be a taboo in our society .Especially an agent is supposedly service you for life once you bought a policy from him/her. People might get pissed off if an agent's service is not satisfactory while earning such a good commission.

    ChampDog, considering to change career fields? :P haha

  3. ChampDog // 9:31 PM  

    Hahaha... Sales is not my strength unfortunately. :)

  4. maveric // 3:08 PM  

    'Employee category' comrades are so lucky nowadays.There are endless information on practical all that one needs to know on personal financial stuffs..unlike the 70's & 80's..boomers era.

    The usual 'money making'categories are still around eg 1)properties - their prices & rental rates did not escalate as crazy like the last decade..not many boomers were in it.looking back,venturing out in as late as 2000 to be purely a property speculator would have been rewarding!! & 2)stock market-I have yet to meet any retiree or anyone for that matter who says that he has made it from shares!..I mean someone who has call it quits as his shares liquidation is enough to see him live out till 75 yrs old...!I also went through the great'super bull' run in the early 90's..of course,the right strategy was to 'steal,beg & borrow' to dump in & exit just before the crash...nice retirement then..:D

    Really,opportunities are in abundance for all employees in any era...

  5. Kris // 9:23 AM  


    Knowledge spread more easily and can be viral with the internet, hence nowadays it is easier to learn more about new opportunities.

    "Knowledge is indeed power", of course provided you took action and apply it.


  6. maveric // 3:32 PM is easier to learn more about new opportunities now...I missed 2 long time ago..

    Fact- 'employee category' remuneration generally stuck,not much changes for starting pay,middle income trap ...blah3

    Fact- 'employee cat ' employers generally no more 'iron bowl' thingie mentioned,easily discarded like diapers,VSS-ed!

    Fact- 'employee category' definitely has debt up to their nose(always trying to screw some $ out of EPF anyway..:)..! Housing & car loans..Look..we beat the s..t out of our Asean neighbors with the highest no of new vehicles purchased annually(passenger car..~ 0.5million units) As such,we also have the distinction to hold the champion trophy for the No 1 'Household-debt' title among our Asean neighbors too ..!

    Fact - We also hold some great records too..the Laziest,the most corrupt,the least dfi(direct foreign investment)capital-flight,brain-drain ..etc2

    Conclusion ..?? It just need a little internal economic 'upheaval'
    to see some major crashes ..! Strategy..?? Keep cash now..'dead & staggering chickens' for the picking soon..??

    Aya2..I hope I did not sound too demoralizing..!..:(

  7. Kris // 9:56 PM  


    When there is danger there is opportunities, "maoxian" :D

    Life is challenging, instead of fretting alot, we must put our energy to resolve the root of our problems: Which is to earn more money :D instead of brooding on how high cost of living, job instability, etc.

    Brooding is not productive and waste of time :P

    That is my thought :D as I was too at one time thinking quite negative when I first started stepping into the working world.

    Life is a game we played with our lives :D

  8. maveric // 11:37 PM  

    @ Kris,

    Great attitude,my friend. I am 59 years old and still have difficulty in controlling my negative emos sometimes.

    There are so much good stuffs in the different financial blogs & I wonder as to why there are so little interest generated!! Where are all the readers/
    questions,opinions..? sad..:(

  9. Kris // 12:14 AM  


    Typically Malaysians are very shy to ask questions as compared to Westerners, because of the fear of asking "so-called-stupid" questions.

    That is the reason why even though I have written like 700+ posts in my blog, there are very few unique commentators.

    I do read alot of financial blogs, as different bloggers have different perspective in investing and in life. I do comment But as usual, I am just one of the few active commentators.

  10. ChampDog // 6:07 PM  

    Style and fashion can generate a lot traffic here in Malaysia because like what Kris like to do during free time, watching those pretty girls! :) Anyway, just kidding. lol

    I think in general, financial topic is the niche, you won't get super high traffic or many readers.

  11. Kris // 10:57 PM  

    If I was a pretty girl, I surely will camwhore alot, and can easily attract a huge following.

    Yup, financial is a niche, nevertheless I wrote my blog with no intention of being a superstar, etc.

    I just like to talk about money & opportunities.

    P.S Which men don't like to watch pretty girls :D

  12. UTH Interested // 7:30 AM  

    Does unit trust agent receive their commission every month with the same client just like insurance?

  13. Kris // 2:40 PM  

    Unit trust agent only get commission after that specific sale. There is no more commission if there is no new purchases.

    Unlike insurance agent where they still can get some amount after yearly renewal for a certain amount of time as pointed in the posting.