Tuesday, July 03, 2007

Sell low cost policy

Mr Tan
How many low cost policies must I sell a day, to earn an decent income?

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REPLY:

If a life insurance agent sells an average of 1 policy a week, he needs to earn $1,000 per policy, to achieve a monthly income of $4,000.

If the agent sells 1 policy a day, he only needs to earn $200 per policy to achieve the same income. This is lower cost to the customer.

If the agent sells 4 low-cost policies a day, he only needs to earn $50 per policy. This will make the product more affordable to the customer.

You can sell 4 low cost policies a day, if you get the customer to come to you (eg visit your office). They will do so, if you offer simple, good value products.

Many people buy shares by telephoning the stockbroker. The stockbroker does not have to visit the customer!

Lesson: To make life insurance more affordable to customers, we need to develop a new and more productive way of selling the "good value" products.
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1 comment:

Anonymous said...

Hi Mr. Tan

Going by your calculations, if an advisor can sell 4 to 5 low-cost policies to 4 or 5 new policy holders a day, he should be able to have about 80 new policyholders in a month, on a 5-day work week?

Can I say that the advisor is a good advisor and the low-cost plans he/she sells is to address the future needs of the policyholder so that the policy holder can rest easy for the next 15 to 20 years?

If there are about 2500 Income agents, and each one use your business model of about 80 policies a month or 960 a year, would it be fair to say that after 2 years, almost 5 million policyholders would have benefited from the low cost long term programmes? This would be more than the existing population of Singapore today.

So in the 3th year, what happens to the 2500 Income advisors? Is there a long term career for insurance advisors to build a family and plan for their retirement?

July 04, 2007 2:36 PM

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