Identifying Client Needs

Chapter 8

For Internal Training Use Only. Not For Circulation. Created by Devinder Kulashri, Agency, Pitampura

MANG
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Objectives of the Session
By the end of the session we will be able to:
y y

y

y

y

Know the seven typical life-stages of a client and understand the requirements and constraints at each of the life stages Understand how the following factors can affect the life stages for individuals; age, marital and employment status, state of health, ethical preferences, divorce, separation and bereavement Know the four main steps in identifying a client·s real financial needs: distinguishing between the client·s perceived and real needs, distinguishing between the client·s current and future needs, quantifying the client·s needs and prioritising the client·s needs Be able to apply financial planning criteria to the information collected about a client in order to identify, quantify and prioritise a client·s real financial needs Be able to apply features of different types of product to the client·s needs and understand the role of the financial adviser in recommending suitable products by which the client can achieve his or her financial objectives
For Internal Training Use Only. Not For Circulation. Created by Devinder Kulashri, Agency, Pitampura

MANG
Take On New Frontiers

Who is Your Client?
y

Any Individual that an insurance agent comes across and who has any financial need is a prospective client The need may be to:
Provide Financial protection Build contingency fund Save funds for children·s education, marriage etc. Save funds for retirement Address any other requirements that may arise from time to time

y

y

Any individual who has at least one of the above needs is a prospective client for the insurance agent.

For Internal Training Use Only. Not For Circulation. Created by Devinder Kulashri, Agency, Pitampura

MANG
Take On New Frontiers

Prioritizing Needs For Internal Training Use Only. Not For Circulation. Created by Devinder Kulashri. Pitampura MANG Take On New Frontiers . Quantifying Needs 3. Agency.Client Needs The process of determining the legitimate needs of the clients includes: 1. Identifying Needs 2.

Not For Circulation. saving and retirement provisions For Internal Training Use Only.Identifying Needs y y y y y y y y Details of client in terms of their financial liabilities Marital Status Future financial goals Number and age of dependents Employment status Income Details of health status Existing protection. Pitampura MANG Take On New Frontiers . Created by Devinder Kulashri. Agency.

Agency. Not For Circulation. Pitampura MANG Take On New Frontiers .Quantifying Needs y In the financial planning process an insurance agent needs to quantify each of the needs in monetary terms and then calculate suitable amounts that an individual needs to save and invest for the future For Internal Training Use Only. Created by Devinder Kulashri.

and so the needs which are given highest priority in the ranking are the ones for which investment should be made first y For Internal Training Use Only. where limited funds can be allocated to fulfill the maximum needs of the client. Agency. Not For Circulation.Prioritising Need The clients needs must be prioritized and their investment capacity may be limited and the total amount spent may be more than the surplus funds available y The insurance agent should suggest the best product mix. Prioritising these needs helps the client to determine which investment(s) can be deferred. Pitampura MANG Take On New Frontiers . Created by Devinder Kulashri.

Not For Circulation. Created by Devinder Kulashri.Prioritising Need What if the client already has some existing insurance plans? y In this case. Agency. the insurance agent needs to find out two things: For Internal Training Use Only. Pitampura MANG Take On New Frontiers .

Pitampura MANG Take On New Frontiers . Agency. Created by Devinder Kulashri.The Typical Life Stages of a Client y y y y y y y Childhood Young unmarried Young married Young married with children Married with older children Pre-retirement Retirement For Internal Training Use Only. Not For Circulation.

marriage and other living expenses. such as primary and higher education. Not For Circulation. Created by Devinder Kulashri. For Internal Training Use Only.if they themselves die prematurely To provide for their children·s future expenses. Agency. Pitampura MANG Take On New Frontiers .Childhood y At this stage there are two basic needs for parents/guardians 1 2 To secure their children·s financial position .

Pitampura MANG Take On New Frontiers .individual is one of the income providers for a family (along with the parents) individual needs to protect their income For Internal Training Use Only.individual·s protection need is low as there are no dependants . Not For Circulation. Created by Devinder Kulashri.the need to invest any surplus income and earn high returns gains priority Young unmarried with dependents .Young Unmarried y This stage of life cycle is divided into two categories: Young unmarried with no dependents . Agency.

Not For Circulation. Pitampura MANG Take On New Frontiers . The couple may also look to invest in products that can offer them high returns and help them with wealth accumulation 2. etc. Single Income family . The income earner should buy a term insurance plan so that in the event of their premature death. Agency. The financial needs change as they start thinking about purchasing a house. Created by Devinder Kulashri. These individuals can be further categorized into two types: 1. For Internal Training Use Only. Double Income family . the surviving spouse will receive a sufficient sum from the insurance company to replace the income provider·s loss of income. starting a family.An individual term life insurance plan for both partners is suitable at this stage so that the loss of income due to the death of one partner can be compensated for to some extent.Young Married As this stage the individual gets married.The need for income protection assumes priority over other needs.

Young Married with Children At this stage the responsibility of individual increases when children are born. Not For Circulation. This stage can be further classified into two types: y Double Income Family: Protection of income is important. Created by Devinder Kulashri. Pitampura MANG Take On New Frontiers . Agency. is recommended For Internal Training Use Only. Investments towards their children·s future can be a high priority A family floater health insurance plan covering the couple and their children is advisable Small contributions towards a retirement plan. Individual term life insurance plan for both partners should be recommended Investment capacity of such families will be higher.

Not For Circulation. a child investment plan should be given priority A family floater health insurance plan covering the couple and children is advisable For Internal Training Use Only. Pitampura MANG Take On New Frontiers . Agency. Created by Devinder Kulashri. a term life insurance plan should be recommended Once the income protection need is taken care of.Young Married with Children y Single Income Family: Income protection is very important.

Created by Devinder Kulashri. Not For Circulation. Pitampura MANG Take On New Frontiers .Married With Older Children y This is the stage where the financial responsibility of the couple towards their children will be in respect of their higher education and marriage The need to focus investments towards their retirement fund also gains importance at this stage and as the couple has already made significant investment towards children¶s education and marriage y For Internal Training Use Only. Agency.

Pitampura MANG Take On New Frontiers .PrePre-retirement y This is the stage when the children will have completed their higher education. Not For Circulation. be married and become financially independent At this stage the entire focus shifts towards retirement fund and health protection as most need are mostly taken care off y For Internal Training Use Only. Created by Devinder Kulashri. Agency.

Not For Circulation.Retirement Need to invest funds wisely to ensure an adequate regular income during retirement y Review the health cover and see its adequate y Estate/inheritance planning y For Internal Training Use Only. Agency. Pitampura MANG Take On New Frontiers . Created by Devinder Kulashri.

Life Cycle Stages For Internal Training Use Only. Pitampura MANG Take On New Frontiers . Created by Devinder Kulashri. Not For Circulation. Agency.

4. 3.Factors that Affect the Life Stages 1. 7. 2. Pitampura MANG Take On New Frontiers . 6. Age Marital status and dependents Employment Health issues Individual·s income and expenditure Individual·s assets and liabilities Divorce. Agency. 5. separation and bereavement For Internal Training Use Only. Not For Circulation. Created by Devinder Kulashri.

The process is as follows: For Internal Training Use Only. Agency.Client Needs: Real and Perceived Real Needs: Real Needs are the actual needs of a client which should take priorities over other y Perceived Needs: These are the imagined or thought to be important by the client y The job of an insurance agent is to help clients in identifying real needs. Pitampura MANG Take On New Frontiers . Created by Devinder Kulashri. Not For Circulation.

Created by Devinder Kulashri.Communication. Questioning & Listening Skills Three essential skills that every insurance agent must have Communication skills Questioning skills Listening skills y Good communication skills include: A good command of the client·s local language and dialect A friendly approach which encourage clients to speak about their concerns Whenever a client asks a question. This will encourage the client to participate in the financial planning process For Internal Training Use Only. the agent should answer the question honestly and continue to engage the client in a two-way dialogue. or makes a point. Agency. Pitampura MANG Take On New Frontiers . Not For Circulation.

Agency. Created by Devinder Kulashri.Questioning Skills This techniques includes: y Using different types of questions y The phrasing of questions For Internal Training Use Only. Not For Circulation. Pitampura MANG Take On New Frontiers .

Using Different Types of Questions 1. Agency. Pitampura MANG Take On New Frontiers . Not For Circulation. Classification on the basis of Structure a) Open ended question b) Closed ended question 2. Classification by Purpose a) Seek Information b) Explore and collect additional information c) Check meaning or understanding d) Confirm points already agreed e) Commit the client to action For Internal Training Use Only. Created by Devinder Kulashri.

Created by Devinder Kulashri. Agency.Using Different Types of Questions 1. Classification by Structure A) Open-ended questions This type of question encourages the client to talk freely and highlight issues which are most important to them. Pitampura MANG Take On New Frontiers . Not For Circulation. For Internal Training Use Only.

¶no·. For Internal Training Use Only. Agency. Created by Devinder Kulashri.The client·s response is restricted to ¶yes·. Pitampura MANG Take On New Frontiers . ¶a specific fact·. Classification by Structure B) Closed-ended questions These questions are structured so that the client has to provide short specific answers.Using Different Types of Questions 1. or ¶a specific amount·. Not For Circulation.

Seek Information 2. Created by Devinder Kulashri. Agency. Commit the client to action For Internal Training Use Only. Classification by Purpose In this classification. Explore and collect additional information 3.Using Different Types of Questions 2. Check meaning or understanding 4. questions can be either open or closed and include questions that: 1. Not For Circulation. Confirm points already agreed 5. Pitampura MANG Take On New Frontiers .

Not For Circulation. Created by Devinder Kulashri. Pitampura MANG Take On New Frontiers . Agency.Classification by Purpose For Internal Training Use Only.

Not For Circulation. Pitampura MANG Take On New Frontiers .The Phrasing of the Questions The questions needs to be: Linked to earlier questions asked Put in simple terms that a client will easily understand Personalized to according to the client For Internal Training Use Only. Created by Devinder Kulashri. Agency.

Not For Circulation. Agency.Listening Skills Developing Good listening skills is also important for an insurance agent so that they can interpret the clients response correctly y The agent should concentrate on client·s answers and other information that he provides y The agent can also try to study the body language as it will help in determining the level of interest in financial planning y For Internal Training Use Only. Pitampura MANG Take On New Frontiers . Created by Devinder Kulashri.

Created by Devinder Kulashri. Not For Circulation.Handling Objections from Client y Once the agent has made their recommendations some of the common objections that a prospective client may have are: The product doesn·t meet my needs Competitor·s products are offering additional benefits I don·t have the funds for investment For Internal Training Use Only. Agency. Pitampura MANG Take On New Frontiers .

Created by Devinder Kulashri. Agency.Handling Objections from Client For Internal Training Use Only. Pitampura MANG Take On New Frontiers . Not For Circulation.

Pitampura MANG Take On New Frontiers . The personal details section includes the client name . Clients cash flows and their existing investments For Internal Training Use Only. contact details and marital status 2.Gathering Client Information Including Family Information For this agent use a form called fact find: 1. Family details 3. Agency. Created by Devinder Kulashri. address. age . Not For Circulation. Clients professional details 4.

Not For Circulation. Created by Devinder Kulashri. Agency.Understanding Priorities The needs can be prioritised based on several factors: For Internal Training Use Only. Pitampura MANG Take On New Frontiers .

Pitampura MANG Take On New Frontiers . Not For Circulation.Confirming Assumptions & Agreeing to Objectives y A need analysis should be done by an insurance agent after agreeing the client·s objectives During the need analysis any assumption made should be confirmed with the client y For Internal Training Use Only. Created by Devinder Kulashri. Agency.

THANK YOU For Internal Training Use Only. Pitampura MANG Take On New Frontiers . Created by Devinder Kulashri. Not For Circulation. Agency.