LIFE INSURANCE MARKETING

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CHAPTER 13
LIFE INSURANCE MARKETING
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INTRODUCTION

• Purpose of all business - to create and retain
  customers.
• To do this it is necessary to create customer
  awareness
• Make the customer interested in the product by
• Making the product available at affordable cost
  suiting his convenience.
• Customer satisfaction for continuation as
  customers.

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• Business has to reach customers by making the
  goods and services available at convenient
  outlets, ensure customers experience
  satisfactions while using them.
• Marketing comprises of all these focusing on
  customer

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• Products and distributions are designed to match
  peoples needs.
• Studies in the past have developed ideas and
  concepts that help marketers become more
  effective in their functions.

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• Marketing concepts are different for tangible
  products and that for services.
• Every service caters to different type of needs
  of the customers.

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THE DISTRIBUTION CHANNEL
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• Route by which the product prepared by the
  producer reaches the consumer.
• Bridges the distance between the producer and
  consumer.
• In life insurance , the agent is the primary
  component.
• Supervisor of agents (Development Officer or
  Agency Manager) is important. He makes the
  channel effective by creating and training
  agents.
• New agents widen the channel.

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• Brokers and Insurance Consultants are equally
  important.
• Direct selling saves costs.
• In India, personal contacts by agents may
  continue to be necessary.

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• Another method is the use of network of branches
  of banks.
• This will save in cost of infrastructure and
  overheads.
• It may be possible to develop composite products
  having elements of both banking product and life
  insurance.

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SOLD, NOT BOUGHT

• General Insurance is bought because it is
  compulsory under the law in some cases e.g. Motor
  Insurance.
• In Life Insurance there is no compulsion.
• The possibility of death is either ignored or not
  considered imminent.
• People have priority on today over tomorrow.

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• There is tendency to leave everything to fate.
• When the need for life insurance is realised, the
  person may not be in good health and insurer may
  refuse to grant the cover.
• Hence need to sell.

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• The person met by an agent at his normal place of
  work or residence is a better risk than the one
  who comes to the office and asks for insurance.
• The agent is the primary underwriter who studies
  and reports to the insurer.
• The moral hazard must be looked at more carefully.

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THE CUSTOMER

• Experience of service at the time of claim.
• Customer in Life Insurance is the person who buys
  the policy and make a claim too.
• Two mind sets -
• - Anxiety and fear of death at the start

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• - Satisfaction for settlement of claim or
  disappointment for money could have been utilised
  elsewhere better at the end.

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• Claimants of death benefits are different from
  the Life Assured and know very little about the
  terms/conditions of policy and the reason of
  taking out a policy.
• Agents may help claimants in completing the
  formalities which will provide customer
  satisfaction.

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STRENGTHENING RELATIONSHIPS.
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• Agent is link between the customer and the
  insurer.
• Customer Agent link is stronger than company
  customer link.
• Customer loyalty to the insurer depends on how
  strong agent customer link is.
• Death claim provides opportunity to strengthen
  this link.

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• Agent should keep in touch with his
  policyholders to become aware of their insurance
  needs, policy servicing aspects etc.
• Contact with customers conveys that agent cares
  for the customers.
• An agent who does not keep in touch is not
  trusted by the customers.

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IMPORTANT OBSERVATIONS.

• It is important for agents to
• Maintain regular contacts with policyholder.
• To build trusting relationship
• To help keep the policy in force by continuous
  follow up
• Always place the customer interest above their
  own.

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FUNCTIONS OF AN AGENT
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• Solicit and procure life insurance business for
  the insurer.
• Advise prospect suitably keeping his
  circumstances and needs in mind.
• Complete the formalities necessary to get the
  policy expeditiously.
• Keep in touch with changing circumstances
  relating to insurance.
• Facilitate quick settlement of claims.
• Be totally honest with the prospect and the
  insurer.

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CODE OF CONDUCT

• As per IRDA Regulations
• Agent will identify himself and the Insurance
  Company of which he is an agent.
• Display the licence to the prospect.
• Explain all available options to the prospect.

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• Recommend a suitable plan taking into account the
  needs of the prospect.
• Disclose the scales of commission if asked for by
  the prospect.
• Explain the nature and importance of the
  information required in the proposal form.
• Make all enquiries about the prospect.

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• Impress upon the prospect the need to disclose
  all information.
• Inform insurer about any material facts that may
  affect underwriting decision.
• Convey to the prospect about the status of the
  proposal.
• Advise policyholders to effect nomination.

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• Render necessary assistance to policyholders/claim
  ants/beneficiaries in complying with requirements
  asked for by the insurer.
• Make every attempt to ensure remittance of
  premiums by the policyholders within stipulated
  time by giving notice orally and in writing.

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• Not to induce prospects to submit wrong
  information.
• Not to interfere with the proposals introduced by
  the other insurance agents.
• Not demand or receive from beneficiary, share of
  proceeds under insurance contract.
• Not cause the termination of and existing policy
  with a view to effect a new proposal.

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ADVERTISEMENTS
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• Advertisements are effective
• As reminders to intimate change of address, pay
  premiums, make nominations etc.
• As information on bonus declaration, special
  campaigns for revivals, concessions, new plans
  etc.
• To build corporate image as for financially
  strong, as responsible senior citizen, etc.

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• IRDA Regulations state that
• Claims made about the benefits should not be
  beyond the ability of the policy to deliver.
• Benefits described should match policy
  provisions.
• Words or phrases should not be used in such a way
  as to hide or minimize the cost of hazards.

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• Important exclusions, limitations and conditions
  of the contract should be disclosed sufficiently.
• Information should not be misleading.
• Illustrations about future benefits or
  assumptions should not be unrealistic or
  unrealisable in the light of current performance.

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• Benefits that are not guaranteed should not be
  referred to in ways that they are not noticed.
• There should be no implication of sponsorship,
  affiliation or approval that does not exist.
• There should not be any unfair comparisons with
  products of the competitors.

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• Settlement of death claim at the earliest forms
  a sort of an advertisement.
• Satisfied claimants are powerful and effective as
  word of mouth media.
• The word of mouth endorsement helps life
  insurance, agents and insurer.

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KEEPING CUSTOMERS HAPPY
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• Customer is satisfied when the product meets his
  needs.
• This happens at the time of claim - which is far
  off.
• It is important to keep him happy during this
  period to avoid COGNITIVE DISSONANCE.

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• This arises because of doubts about the decision
  to buy.
• In Life Insurance it may easily arise as others
  will talk about alternative plans, better
  insurers, etc.
• In such cases the agent should reassure him at
  every possible opportunity that the purchase he
  made was not a mistake.

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• Studies show that people are happy when they are
  recognised, respected and not taken for granted.
• Recognition happens when ones feelings are
  understood.
• Agents can do a lot in recognition of people.
• One way is clarify policyholder when he is in
  doubt.

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• Other way is to avoid denying the validity of his
  thoughts.
• Respect other persons views. This is important
  while handling objections during during a sale.
• Recognition is high when the thoughts of other
  person are anticipated and attended to.

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• Two other factors which make customers happy are
  Responsiveness and Ease of Access.
• This can be done by agent easily .
• It is difficult for an office to be warm and
  personalised when dealing with anybody.

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• Some agents do not let the policyholders go to
  the office at all.
• They get everything done.
• Such agents are reinforcing the impression that
  the agent is trustworthy and can be depended upon
  to fulfill his promises.
• The image of insurer remains high.

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THANK YOU M. J. MALIKS.B.A.836
B.O.AHMEDABAD D.O.09879094925lic.malik_at_gmail.co
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