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How well does your seller understand your life insurance needs?

Here is a checklist for you to evaluate whether your seller understands your needs well enough to make a difference to your larger goal of financial protection.

Jul 30, 2019, 12.36 PM IST
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Your seller must take a goal backward approach to your life insurance needs.
By V. Viswanand

For most of us, something as simple as our laptop is an essential device that we thrive on for work, play and use for an array of day-to-day tasks. While some of us are confident buying it off the web or from a shop, most of us look for field experts who could help give professional advice on the device's memory and speed, fast processing power, hardware and so on. For this, we often tend to fall back on the store manager, a tech vlogger or even a relative or friend who is tech savvy and understands our needs, specific features we desire, budget and can help suggest the right fit.

This is something that we should do while buying a life insurance policy. We have to be extremely careful when we buy a life insurance plan. For a seller of insurance, it is imperative for them to go beyond simple selling of policies and products for the life insurance company, and understand what the life insurance policy means to you. While selling plans is an important aspect, there are various other roles that a seller plays as the intermediary between life insurance companies and customers.

Below is a checklist for you to evaluate your seller whether he/she understands your needs well enough to make a difference to your larger goal of financial protection.

Life insurance selling ideally should be 'Goal Backward'
Your seller must take a goal backward approach to your life insurance needs. In other words, he/she must start with your ultimate objective, your life stage goal, and then work backwards from there to develop your plan and suggest the right product solution. In case they do not have the right product available, a sincere seller would have the ability to lend perspective and/or direct you to a solution that would address your needs most effectively.

Seller must understand that one size does not fit all
Life insurance is a product that one can never take a one-size-fits-all approach to. Different individuals have different needs, objectives and life situations and hence, the seller must be able to tailor the right combination of protection, investment or savings to bring to life a value-added life insurance offering. Instead of product-based suggestion, the seller must propose need-based suggestions to achieve your financial goals meaningfully. A right seller must also help you arrive at a specific amount that you will need for your future financial goals - family protection, children's education, retirement planning and wealth creation.

Should be eager to discuss risk, returns and liabilities in equal measure
A diligent seller should conduct financial planning exercises by considering your assets and liabilities, your standard of living, age, annual income, etc. and recommend solutions that meet your long-term savings and protection goals. They must ensure that you buy a policy that you can afford given your earning and financial liabilities. The seller should also assess your investment risk appetite to suggest whether a traditional policy would be better, or a market linked plan. The seller must be informed enough to then inform you about the right amount of premium you need to pay for your policy, including frequency and mode and even explain the importance of a nominee and requisite disclosures under your policy.

Should have long-term solution to your financial goals
A skilled seller should assist you in the long run by conducting yearly assessments to know about any new requirements you may have and provide solutions accordingly. He/ she should be able to assist your post-purchase needs such as modification, redirection, switching, etc. Moreover, they should be on the top of their job when it comes to collecting the renewal payments and providing reminders for the same. They must realise the loss of insured to the family and help assist your loved ones during the claim settlement process.

Lastly, make sure to steer clear of fraudulent sellers by seeking the agent's/intermediary's license, identity proof, and a business card of the company he represents, when you meet him/her. Remember that true agents/intermediaries will be your trusted and experienced professional partner who will always assist you in taking the right decisions with regards to life insurance policies.

(The author is Deputy Managing Director of Max Life Insurance.)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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