by Russell Hutchinson
That means that although this interview represents the best opportunity known to humanity to sell insurance, there isn't much time to raise the subject before the client's eyes glaze over - or worse - and they simply cannot take any more, running screaming from the bank.
But a substantial number do something else.
What they seem to do is keep signing. What's this? An application for insurance - just hand it here, I'll sign. Oh the price sounds reasonable enough, are we done now?
The challenge with these ‘fast' risk sales is that because of the reduced underwriting associated with them they must have different terms to the more comprehensive insurance product that is offered - often by the very same company - were you buying from, say, one of their insurance managers or financial advisers. If you ask fewer questions then you need to make up for that in your experience some other way. One way is to charge more, which is why many ‘direct' offers actually cost more than intermediated offers. Another way is to offer less cover, which is done by limited the cover amount, duration, and increasing the number of exclusions. That's the approach taken by several banks with their standard loan protection packages.
Things excluding can be: any disease or accident that occurred first outside New Zealand, HIV, sexually transmitted disease, unlawful acts, and being intoxicated.
It creates some fabulous opportunities for advisers wishing to focus on clients with such limited cover. It creates problems for banks if you think about the demands of an advice model - to what extent do they need to give loan clients the option of following a full advice process in order to meet their commitments under Code Standard 1?
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