Chapter 10

1. The key aspect of advisors or agents to do for better persistency IS SELLING LIFE INSURANCE PRODUCTS AS PER NEED AND POLICY SERVICING.
2. The agent should disclose the Commission he will get, if demanded by the customer.
3. If the client does not wish to proceed with the recommendations right at the moment then agent should ASK FOR REASONS FOR NOT GOING WITH THE RECOMMENDATION.
4. Increasing of persistency from say 82 to 86 means LESS LAPSATION.
5. Higher persistency to the insurer ensures HIGHER PROFITS.
6. If the commission received by an agent on one policy is more than the commission received by him on the another policy though the policy being of same duration then the reason for this can be that second mention policy is a SINGLE PREMIUM PAYMENT POLICY.
7. The factors that can influence persistency are ROLE OF THE AGENT, PRODUCT DESIGN AND POLICY SERVICING.
8. If sales targets gets reduced then churning would certainly DECREASE.
9. The best way to prove that customers of ULIP policy are given awareness about the commission paid to the agent is to get a signed copy of benefit illustration from the customer / policyholder.
10. An agent should disclose the commission if customer ask for it.
11. If the agent or the advisor is finding it difficult to explain the ULIP or other plan to the customer then he or she should refer to the product brochure.
12. If an advisor or agent sell the insurance product as per the needs of the customer then this may result in the OPPORTUNITY OF NEW BUSINESS FOR THE ADVISOR.
13. A married man who has a daughter of say 3 years the best he can do is to take TERM & CHILDREN PLAN.
14. An agent who is licensed intermediary is actually a LEGAL PERSON TO ACT ON BEHALF OF THE INSURER.
15. An advisor does churning to EARN EXTRA COMMISSION.
16. When client declines the recommendations by the insurance advisor even after resolving the concerns then the advisor should ask for reference of people who might be interested in the financial planning.
17. Persistency helps the clients in achieving their financial goals, increase client satisfaction and reduces the costs. It also increase (and not decrease) the revenue.
18. A satisfied client leads to WORD OF MOUTH PUBLICITY FOR THE AGENT, CHANCES OF UPSELLING AND MORE REFERENCE GENERATION FOR THE AGENT.
19. The stipulated time frame within which an insurer is supposed to respond after receiving any communication from its policyholder is 10 Days.
20. Churning is considered bad for the customer because of its impact of charges on the customer’s fund.
21. In case of particular risks, the consequences of these risks will affect specific individuals or Local communities.
22. If the advisor motivates the client to surrender the existing Endowment Plan and to buy new Whole Life policy, to earn higher commission then this is known as CHURNING.
23. Churning is bad because policyholder suffers loss of profit due to surrender charges of the policy.
24. The reason why an advisor is getting more commission then 35% of the first year commission is that he might be in ALTERNATE CHANNEL.
25. A person as an insurance advisor should not recommend to his client about that he should surrender all the policies not sold to that customer by that particular advisor.
26. An agent can receive maximum of 35% of the premium as first year commission.
27. According to insurance broker association of India the most appropriate relation between insurer and a Broker is that INSURANCE BROKER REPRESENTS THE CLIENT AND THE INSURER REMUENRATE THE BROKER.
28. Insurance Act, 1938 prescribes the maximum remuneration that can be given to an insurance agent.
29. Dispatching Discharge Vouchers to the customers does not help in Persistency.
30. If after taking financial planning exercise the prospective client said that he does not have funds to investments then to resolve this quarry the agent should use OBJECTION HANDLING SKILLS.