Agency Termination: Reasons and Fixes

Life Insurance Agency Business is not just limited to selling policies, but it is an important responsibility that provides financial security to the future of your policyholders' families. However, if the little things in this business are ignored then it can cause a big problem for your agency.

In this latest article of Jeevan Bima Bazaar, we will discuss the common mistakes and their preventive measures, which will not only keep your Life Insurance Agency safe but also maintain the trust of your customers.

Choosing the Right Client

As a Life Insurance Agent, your biggest responsibility is to ensure that the Life Insurance Policy is sold only to those people who are eligible for a Life Insurance Policy. Every Life Insurance Company expects from its agents that their agent will encourage such people to buy a Life Insurance Policy, who will be completely healthy.

Every Life Insurance Company believes that their agent will properly verify the medical reports and relevant documents of the customers and will maintain transparency in every proposal, understanding the seriousness of the health of the customers.

Agent's Problem in Life Insurance Sales

I have worked as a Life Insurance Advisor with India's number one Life Insurance Company known as Life Insurance Corporation of India (LIC) from the year 2001 to the year 2018. Since the year 2015, I have been continuously working as a trainer. As a trainer, I keep interacting with many Life Insurance Agents.

I feel it is important to share some of my experiences with you here. I believe that every Life Insurance Agent always tries to sell the Right Life Insurance Policy. But at the same time, every agent also wants to achieve success like MDRT/COT/TOT, he wants to get his name on the board of his branch office and also wants to get himself and his family out of financial crisis.

No agent wants that any of his clients face any problem and any client gets upset because of him. This thinking of an agent creates a big problem for him. While selling an Insurance Policy, the agent feels that if he asks his prospective client about his addiction or if he asks the client about his illness, then the client will get upset or the client will refuse to buy the policy.

Errors Made by Agents in Assessing Invisible Diseases

Generally, by looking at a sick person, it is known that the person is unwell. But, there are many such serious and life-threatening diseases due to which it cannot be told by looking at the patient normally that he is ill. Such as: diabetes, high blood pressure, early stage cancer, chronic kidney disease, thyroid, osteoporosis, liver disease, heart disease, HIV, depression, etc.

A patient suffering from the above diseases generally looks like a healthy person. For example, by looking at a patient of heart disease, you cannot tell that he is suffering from such a serious disease. Whereas he is undergoing treatment for a long period.

Many Life Insurance Agents, due to hesitation or other reasons, do not inquire about the disease of such people and sell Insurance Policies considering them healthy. When there is a death claim in such policies, such death claim is rejected. Now if the family of the deceased policyholder goes to court against this decision of the Insurance company, then the liability of the Insurance Agent increases.

In this situation, the agent's agency may be in trouble or the Insurance Claim can be recovered from the agent. Therefore, as a trainer, our suggestion for you would be to take the decision of selling a Life Insurance Policy only after properly assessing the health of Every Insurance Salesperson.

How should an Agent Accurately assess the Health of the Customer?

I believe that a Life Insurance Agent has to face many challenges to sell a correct Life Insurance Policy. Therefore, our suggestion for you would be to find out about the health and habits of the prospect at the time of prospecting. For this, you can collect information about this from the neighbors and friends of the potential customer.

Because if you work for a sick person, that is, first you explain the Insurance Policy, then solve his various objections and later, while filling the proposal form, you come to know that the person is sick, then in this case, both your time and money are wasted.

Now suppose you inquired about a person's health from his neighbours and after that you explained the Life Insurance Policy to that person. Now that person is ready to buy the Insurance Policy. So before filling the proposal form you must ask your potential customer about his illness.

First Question: Are you currently undergoing treatment for any serious illness? If you are undergoing any treatment, you may get some special benefits from the life insurance company.

Second Question: Have you had to undergo treatment for any serious illness in the last few years? If this has happened to you, you may still get benefits from the insurance company.

Friends, I say from my experience that when a customer is ready to buy an insurance policy and at that time if you ask the above questions, then that customer not only tells about his illness, but also becomes ready to submit the necessary proof. I have always used this technique during my tenure.

If a customer is ill, then we must try to find out about the health of other family members at the same time. So that we can try to sell the insurance policy to another member of the family.

Serious challenge to Insurance Agents from Government Employees

The biggest challenge for a Life Insurance Agent while selling Life Insurance Policies is when he meets a Government Employee to sell his products. In fact, many Government Employees are at home on Medical Leave despite being completely healthy. Often, when such customers are questioned about their health, they also claim themselves to be completely healthy. This is because they are actually healthy, they have taken Medical Leave only to take leave.

As you know, when there is a Death Claim in Life Insurance Policies, the Insurance Company investigates the death. When a Death Claim comes in the Life Insurance Policy of a Government Employee, the Insurance Company also checks his official documents. In this investigation, it is found out that when the Life Insurance Policy was issued on the life of the deceased policyholder, he was on Medical Leave.

Every Government Employee submits proof of his health checkup and a written application to the concerned department to obtain leave. In the leave application, he accepts with his own signature that he is ill. This much proof is sufficient to reject the Insurance Claim. In the Death Claim of such policies, the Life Insurance Agent becomes the scapegoat without any fault.

So our suggestion for you would be that whenever you are talking to a Government Employee regarding a Life Insurance Policy, then definitely check whether he has taken Medical Leave at that time or in the last one year.

Risks of Selling Life Insurance Policies to Remote Customers

Nowadays, many Life Insurance Agents are registering Life Insurance Policies using their Agency Portal. Some agents are using agency portals to sell Life Insurance Policies to remote customers. However, this method can be extremely risky for your agency.

Addiction and Insurance Claim Risk

Many Life Insurance agents ignore the client's habits when selling Insurance Policies, which can pose a risk to the agency. You may know many people who consume drugs. We suggest that you should avoid selling insurance to such people. If you sell an insurance policy to a person who is heavily addicted to drugs and later dies of a disease caused by the addiction, the insurance company may reject the claim.

High-Risk Occupation and Addiction

If you sell insurance to someone who drinks excessively and does risky occupation, the insurance can create problems for you. For example, if a person dies in a road accident and the post-mortem report shows that he was drunk while driving, the chances of insurance claim getting rejected are high.

Process of Filling Proposal Form

Most agents fill the Proposal Form for the client themselves. We suggest that you get the Proposal Form filled by the client and help him/her if possible. If this is not possible, get the form filled by a family member of the client or your staff. The proposal form should be signed by you only and you should fill the Agent Confidential Report Form yourself.

Use and Responsibility of Agency Portal

If you register a life insurance policy using your agency portal, you take all the responsibilities related to the proposal form on yourself. Hence, use the agency portal only when it is absolutely necessary.

Policy Revival and Witness

In cases of policy revival, the agent should witness the revival documents only if he/she knows the exact health condition of the client.

Risks of Duplicate Policy Bonds

The practice of physical policy bonds is going to be discontinued in the future. But for now, be cautious before acting on a customer's request for a duplicate policy bond. The policy bond is the most important document in life insurance policies and many financial and judicial actions can be taken on its basis. If you act for a duplicate policy bond for the wrong person and the fraud case is later exposed, financial recovery can be made from you.

Tips for Life Insurance Agents

You may not have been aware of many matters earlier and due to this some wrong life insurance policies may have been sold by you. So now the question arises that how to protect your agency from such policies. So let us now know about this topic in detail.

Suppose you have sold a life insurance policy to a sick person knowingly or unknowingly. When you sold the insurance policy, you did not know about it at that time, but when the policy was issued, you came to know about the illness. Now it is true that if a death claim comes in such a life insurance policy, then the claim is bound to be rejected. But despite this, you can definitely take some steps to protect your own agency.

1- Pay the premium on time: Make sure that the policyholder keeps paying the premium of his policy on time. So that his policy does not lapse under any circumstances. If the premium of the policy is deposited for two years, then the risk of the agency is eliminated to a large extent.

2- Avoid signing revival forms: If the customer does not deposit the premium of his policy and the policy lapses, do not sign the revival form of such policy yourself.

3- Avoid filling death claim form and agent report: You should not fill any form of death claim of such policies nor sign any form.

Death Claim Investigation and Legal Responsibilities

It is true that death claims of wrong policies get rejected. But if the family members of the deceased policyholder challenge this decision of the insurance company in the consumer forum, then your agency may get into trouble. Now if you fill the proposal form, revival form and death claim form of the policy, then by doing this you can put your own agency in trouble.

Suppose you have filled only the proposal form, then during the inquiry you can put your side like this: The customer did not give any information about his illness while buying the insurance policy. But if you have filled the death claim form yourself, then you will not be able to answer. Because your insurance company will present the necessary evidence, for which you will not have the answer. If this happens, the chances of the agency being closed will be very high.

Disclaimer:

Every customer is important and when he buys a life insurance policy, he trusts you. Therefore, before every sale, make sure to check whether you will be able to receive the death claim if the death claim comes the next day after the policy is issued. If you can do this, then sell the insurance policy and if you are confused, do not sell the insurance even by mistake.

All the information shared here is based on our experiences. We believe that the information given by me may be incomplete and full of errors. Since we feel that the topic covered in this article is very important and related to your financial future, our suggestion to you would be that you do not make our article the basis of any decision. Rather, take expert advice and use your discretion. We will not be responsible in any way for any decision taken by you.

Know in Detail in the Video

To know more about the information given in this article, watch the video given below carefully till the end. If you have any questions in this regard, then write your questions in the comment box of the video.