Common Mis-Selling Techniques Used by Life Insurance Sales People
Mis-selling of insurance policies is one of the biggest factors that can result in loss of business and loss of income. Mis-selling can be described as misleading the policy holder to believe that the policy is still valid, when in actuality it is no longer valid. This is done by various means, some of which are more subtle than others. Some of the common ways in which insurance sales are mis-sold are through the use of advertising, and press releases. Both of these techniques can have a dramatic affect on the level of sales generated.
Advertising is a very popular way in which insurance agents can market their policies. The reason for this is that it creates awareness. There is nothing more effective than telling someone that you are a life insurance agent, or that you provide high returns. If you can prove to people that you can provide them with the answers they are looking for, then you will be able to get new clients. In most cases, there is no need to further explain your services once you have convinced them that you are the right person to do business with.
Another method of mis-selling is through press releases. In a press release, an insurance agent writes about their firm’s latest policy purchase or a policy that has recently been renewed. These releases contain many phrases that attract the attention of the general public, including words such as “high returns”, “life assurance”, “diversified portfolio”, and so on. Once these words are included in a news release, people who read them automatically assume that the policy holder has something good to offer.
Mis-selling can also occur through billboards and other outside advertisements. These signs are used to persuade the public into believing that they need the particular product or service. There are many insurance policies sold in this manner that never get sold because people do not believe that the insurance company is able to deliver what is advertised. This kind of marketing is a big problem for the insurance industry. It is very important to prevent this type of mis-selling from occurring in the insurance industry.
Mis-selling can also occur through word of mouth. When people who are not related to the life insurance agent to receive information about an agent or a life insurance policy, they will inevitably think that it is of good quality. Even if they do not know much about the company, they will probably tell someone they know. The word of mouth method is a very powerful one, since many people feel that if a friend likes the policy, then they must like it too. The problem with this method is that it can often lead people to believe things that are simply not true.
Another common technique used by life insurance companies is to offer a high returns policy to a client. This is not necessarily a bad thing provided that they are aware of the pitfalls and drawbacks of such a policy. The most common pitfalls for these kinds of policies are extremely high returns that may not be sustainable over the long run. Another pitfall is the fact that a customer will get too comfortable with the high returns and choose a policy without taking the time to understand all the fine details of the policy.
One of the most common and destructive techniques used by life insurance companies is misrepresentation of the terms of their policies. A customer may get attracted to a low premium rate, but when he takes the time to read the small print of the policy document, he may discover that the rates are too high or that there is some gap between the initial premium rate and the current one. Mis-selling techniques include misinforming customers about the benefits of a policy, such as increased cash value, universal policies, or discounts granted to the client. Customers should also be informed that certain features of a policy, such as accident coverage, do not apply if they are involved in an accident.
One of the most important things a life insurance salesperson needs to know is the legal definition of the terms used in the policy. One mistake is to take the policy literal and base their argument on that alone. A policy is not an agreement between the insurer and the client. Rather, it is a contract between the two parties to the policy. If the customer chooses not to accept the terms and conditions of the policy, he has the option to terminate the contract at any time. If you are a life insurance salesperson, be very wary of all the above common mis-selling techniques.