1.10.1 Needs-Based Selling
A prime violation of a producer's ethical duty to a prospect is deliberately selling to fit the needs of the producer rather than the needs of the prospect. The typical result is a prospect being sold insurance with the highest premium (and the greatest commission) instead of the proper coverage. By committing themselves to professionalism and the needs of the client, insurance producers can act both responsibly and ethically.
Selling to needs is based on the question, "What does your client really need?"
There are two principles involved in this process.
- Fact-finding
- Education
Fact-finding is the first step. An agent should understand what his client's goals are (long term, short term, retirement, etc.) and be able to create a map that will lead to the fulfillment of those goals. Treat all information with utmost confidentiality.
Education is the second step. Show clients how insurance can be used as an effective financial tool to help them reach their individual goals. Make certain the client understands the application and underwriting processes, the policy purchased and any attached riders.
Suitability of Products
Does this product meet the client's needs and is this product in the client's best interest? Does the client have the capability to manage the product?
