Skip to main content

Beyond Key-Man insurance & Cross-Purchase Insurance

Beyond Key-Man insurance & Cross-Purchase Insurance

During my years in AIA-Financial Planning Department, I was given an opportunity to learn something beyond from my academy studies, which is insurance for businesses or in short it is known as Business Insurance.

One of the most commonly known business insurance is Key Man insurance (KMI) and Cross-Purchase Insurance (CPI)

In early years, I was trained to train key-man insurance in academy way, which is define what is key-man, taxation aspect of KMI, valuation of key-man etc.

Similarly for Cross-Purchase Insurance, I learn and teach about firm valuations or value of the firm, value of partnership or shareholding as well as overcoming ‘disparity issue’ like different ages, different holding etc.

All this learning is marvelous; however to what extend does it translate into sales?

That’s really challenge me as a trainer that we suppose to train for results on top of merely train for knowledge.

Abundantly since past 2 years, I learned from producer on way to ‘close sales’ for business insurance. To biggest surprise and naively learn from them whether during joint-field or providing them consultation on issue like tax treatment in exchange, I discover their powerful sales scripts and concept of which we incorporated into New-FPP (Advanced Level).

In brief, there are 4 steps as below

Step-1: Communicate about ‘Sales’ vs ‘Income’
Conceptually, we should ‘communicate’ with potential business-man/woman about the 2 important aspects in any business venture which is ‘Sales’ vs ‘Income’? So which one is more important?...what do you think ?

Step-2: Highlight the ‘3 potential guarantees’
Subsequently, we should ‘highlight’ 3 potential guarantees (cash, value & payout) with potential business-man/woman to assure them the strength of the plan.

Step-3: Educate about ‘Control’
Next, we should ‘educate’ potential business-man/woman about ‘control’ like if they bought a RM10 million sum-assured policy, upon trigger event arises like death of the insured, would they prefer AIA issue a cheque amounted RM10 million to his/her firm or his/her family?.... So which one is more important?...what do you think ?

Step-4: Propose ‘maximum’ and 'Scale Down' via Financial Underwriting
Finally, we should propose maximum’ sum assured via Financial Underwriting guideline and ‘scale-down’ accordingly to meet the affordability of our potential business-man/woman.

In short, the producer uses C.H.E.M.S: ‘Communicate’, ‘Highlight’, ‘Educate’, ‘Maximum’ and ‘Scale-down’.

Obviously, from this short topic alone is not sufficient, basic knowledge about businesses, law and legislation, business’s accounting and taxation, AIA financial underwriting etc is paramount to augment you ability to close business insurance.

As a conclusion, this is what I refer to as ‘Beyond Key-Man insurance & Cross-Purchase Insurance’ and its application has its own terms and conditions.

*You can learn more from New-FPP (Advanced level) 
By: JamesKohl

Comments

Popular posts from this blog

PRIVATE RETIREMENT SCHEME (PRS)

PRIVATE RETIREMENT SCHEME (PRS) Development of the PRS Industry With increasing life expectancy and rising living standards , many Malaysians find that their savings are inadequate to meet their retirement needs.  PRS form an integral feature of the private pension industry with the objective of improving living standards for Malaysians at retirement through additional savings of funds . As long-term investment vehicles, PRS are designed to help enhance adequacy and expand coverage of retirement benefits to all segments of the population. It complements Malaysia’s mandatory retirement savings schemes . Contributions to the PRS are voluntary .  Individuals (retail investors, self-employed and employees) or  employers can participate as PRS contributors.  Offering private pension benefits could be a tool for employers to attract and retain skilled talent. The PRS information set out in this publication includes a description of the framewo...

MedicineNet: Diabetes Mellitus

MedicineNet: Diabetes Mellitus Diabetes facts ·          Diabetes is a chronic condition associated with abnormally high levels of sugar (glucose) in the blood. Insulin produced by the pancreas lowers blood glucose . Absence or insufficient production of insulin causes diabetes. The two types of diabetes are referred to as type 1 and type 2 . Former names for these conditions were insulin-dependent and non-insulin-dependent diabetes , or juvenile onset and adult onset diabetes . Symptoms of diabetes include increased urine output, thirst, hunger, and fatigue . Diabetes is diagnosed by blood sugar (glucose) testing . The major complications of diabetes are both acute and chronic. Acute complications : dangerously elevated blood sugar (hyperglycemia), abnormally low blood sugar (hypoglycemia) due to diabetes medications may occur Chronic complications : disease of the blood vessels (both small and large) which can ...

MedicineNet : Lung Cancer

Lung Cancer http://www.medicinenet.com What is lung cancer? Cancer of the lung, like all cancers, results from an abnormality in the body's basic unit of life, the cell. Normally, the body maintains a system of checks and balances on cell growth so that cells divide to produce new cells only when new cells are needed. Disruption of this system of checks and balances on cell growth results in an uncontrolled division and proliferation of cells that eventually forms a mass known as a tumor. Tumors can be benign or malignant ; when we speak of "cancer," we are referring to those tumors that are malignant. Benign tumors usually can be removed and do not spread to other parts of the body. Malignant tumors , on the other hand, grow aggressively and invade other tissues of the body, allowing entry of tumor cells into the bloodstream or lymphatic system and then to other sites in the body. This process of spread is termed metastasis ; the areas of tum...