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