New Sales Process LA PDF

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED Activity Reference No Effective From Last Revision on Authorisation Amendments
and deviations to Policy Objective & Scope
KMOM LIFE INSURANCE CO LTD
Life Advisors Sales Process
Ref : CMO\Individual\Sale 003 Date of Issue: January 29
LIFE ADVISORS SALES PROCESS CMO\Individual\Sales\LA Sales\ 003 January 29, 2002 January 29, 2002 Chief Marketing Officer Any amendments to and deviations from this policy can only be authorised by the Chief Marketing Officer. To define the process to be followed by Life advisors in selling an individual policy to a client. This process covers the business cycle to be followed, the records to be maintained and the overall role of the Life Advisors in the Sales process This note covers the sales process to be followed by Life Advisors for Individual Life policy only. This note does not cover the sales process to be followed for Group Life policy.
This policy covers
This policy does not cover
Authorized By Chief Marketing Officer: ___________________
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KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED
Index Position purpose of a Life Advisor......................................................................................4 Training of Life Advisors....................................................................................................5 Business Cycle to be followed by LA for getting business ................................................6 Prospecting.......................................................................................................................7 Fixing up an appointment .............................................................................................12 B.1 Appointment Over the Phone ..........................................................................12 B.2 Appointment- Face to face..................................................................................17 B.3 Script for Life Advisor........................................................................................19 The Approach talk: Setting the stage.............................................................................23 Needs Analysis...............................................................................................................28 D.3 Immediate and Comprehensive Needs Analysis................................................28 D.4.1 - Human Life Value (HLV) ...........................................................................30 D.4.2 - Capital Needs Analysis (CNA).....................................................................32 The Presentation - Theory..............................................................................................34 E.1 Introduction.........................................................................................................34 E.2 Confirm the clients need....................................................................................34 E.3 Discuss/explore alternative solutions..................................................................35 E.4 Present the solution..............................................................................................36 E.5 Win Win tool....................................................................................................36 E.6 The one-month rule:............................................................................................37 Some of these burdens may not go away in retirement!....................................................37 E.7 Objection Handling.............................................................................................38 E.8 Dos in objection handling:................................................................................40 E.9 Donts in Objection handling:.............................................................................41 E.10 Examples of objection handling .......................................................................41 Closing the Sale - Theory..............................................................................................46 Maximum Risk Cover Allowance ....................................................................................50 Premium Calculation.........................................................................................................51 Modal Factor......................................................................................................................53 Modal Policy Fee...............................................................................................................54 Thorough documentation ..................................................................................................55 Maintenance of records .....................................................................................................57 Life Advisors Diary..................................................................................................57 Client Information:.........................................................................................................58 Information to the Sales Manager..................................................................................58 Sales Monitoring ...........................................................................................................60 Life Advisors role.............................................................................................................61 Functions of a Life Advisor...........................................................................................61 Duties and responsibilities while procuring new business............................................62 Authorized By Chief Marketing Officer: ___________________ Page 2 of 82
Duties and responsibilities while conserving business..................................................62 Life Advisors Kit..........................................................................................................63 Code of Ethics................................................................................................................64 Termination of the agency.............................................................................................64 Restrictions on Life Advisors.......................................................................................65 IRDA Norms - Code of Conduct...................................................................................67 Proposal Deposits and Renewal Receipts .....................................................................69 Role of the Life Advisor in Policy Servicing ...............................................................69 Organisation Values...........................................................................................................71 Exercises in Tax Calculation (client & Life Advisor).......................................................72 Formats of reports maintained by Life Advisors...............................................................79 Annexure 1..........................................................................................................80 ...............................................................................................................................81 Annexure - 2.........................................................................................................81 Annexure - 3..............................................................................................................82
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Position purpose of a Life Advisor

1.1 To develop a client base; identify, analyze and meet the financial needs of prospective policyholders in order to maximize the sale of appropriate products and services and achieve, or exceed, performance targets; provide a high quality after-sales service to policyholders; and ensure effective reporting and administration in accordance with Company standards. I.2 The Life Advisor is the most critical link between Kotak Mahindra Old Mutual Life Insurance Company Ltd and the insuring public. He, with the required amount of knowledge and training and a high sense of responsibility and service brings honor to the profession and the company. He is the man with an attitude
Top Producers do not sell life Insurance; they sell solutions to peoples problems! People are not interested in how much you KNOW, they are interested in how much you CARE!
1.3 The success of a Life Advisor will depend on three factors. One is his knowledge of what is life insurance, what it does and how it can meet the needs of the client. The second factor is his knowledge about Kotak Mahindra Old Mutual Life Insurance Company Ltd; its products and how the company meets the varied needs of the client. The third is his knowledge of the clients needs and ability to service those needs. I.4 The job description of the Life Advisor includes Prospecting Pre-approach Approach Problem identification/ Need Analysis Solution Presentation Closing the sale Sales follow-through Delivery Service Endurance Time Management New Business strategy
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Training of Life Advisors

2.1 After going though selection and recruitment process, the Life advisors are given the letters to go through the mandatory IRDA training and then the top on training by the company. 2.2 License Once the candidates are selected and recruited for becoming our Life Advisors, the Life Advisor coordinator of KMOM would enroll all the candidates for the IRDA training with the Approved Institution. At the end of the Training, the institution gives a certificate indicating that the trainees have completed the required training hours stipulated by IRDA. The candidate is then ready to sit for the PRERECRUITMENT EXAMINATION FOR INSURANCE AGENTS conducted by Insurance Institute of India. Only on passing the examination would the candidate get the License to operate as KMOM Life Advisor 2.3 IRDA training The Life Advisors shall have to undergo mandatory practical training as prescribed in
Regulation 5 of the IRDA Regulations, 2000. The main features of this training are: The candidate who has been selected to become an advisor has to undergo a
practical training for at least 100 hours in Life Insurance Business. The candidate needs to complete only 50 hours practical training if he is (a) an Associate/Fellow of the Insurance Institute of India, Mumbai; (b) an Associate/Fellow of ICAI/ ICWAI/ ICSI/ Actuarial Society of India (c) MBA from any Institution/University recognized by any State Government or the Central Government; or (d) Possessing any professional qualifications in marketing from any Institution/University recognized by any State Government or the Central Government.
2.4 KMOM Training This training is provided to the Life Advisor on his recruitment and during his association with the company. The training covers the basic and scientific knowledge of Life Insurance and its selling techniques. This training is aimed at giving the Life Advisor a complete mastery over the products of the company and command over the sales skills, both analytical and communication, which is required at each stage of the sales process.
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Business Cycle to be followed by LA for getting business

3.1 Once Life advisor gets his license, he is now ready to sell the products offered by KMOM. There are generally seven phases in the business cycle, which must be dealt with correctly, in order to make a successful sale a) b) c) d) e) f) g) Prospecting Making the Appointment The Approach Talk Needs Analysis Presentation Objection Handling Closing the Sale
PROSPECTING
MAKE THE APPOINTMENT
FOLLOW - UP
INTRODUCTION
CLOSING THE SALE
IDENTIFY NEEDS
PRESENTATION
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Prospecting A.1 Prospecting is a continual awareness of potential customers. It is the conscious, directed, continuous activity of seeking, observing, identifying and qualifying prospects. The starting point is to find names of such prospects: Approach immediate family Approach close friends Approach relatives Approach associates Approach policy holders Approach Centre of influence Approach qualified leads Approach referred leads Your sales Manager Other sources include: Stock Exchange Handbook Professional membership directories or registries Yellow Pages Daily and Sunday newspapers High schools, colleges and universities High school and college yearbooks University yearbooks New Companies Register Office buildings Membership lists Religious Communities Trade and professional associations Service organizations University, colleges and school alumni lists Country clubs Lists of companies. Referrals Using a customer base is an excellent way of obtaining new prospects. A.2 Asking for referrals Authorized By Chief Marketing Officer: ___________________
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There is a skill in obtaining a referral. Asking the question, Do you know anyone who can use my product (or service)? will not always work. What you are doing is asking your customer to make a judgment as to whether he knows someone who is ready to buy your product or service, in essence to qualify a lead. In many cases, it may not be possible for him to know. A better way of getting new leads is to refer to specific scenarios, i.e. asking if he belongs to any business organization, clubs, charities, etc. or if the customer is in an office building with other tenants (ask if they know anyone else in the building). The best time to ask for referrals is immediately after the sale is made. At this point the customers enthusiasm and satisfaction are at the highest point. Because referrals are so important in selling, staying in contact with old customers is essential. Send them birthday or holiday cards. Call them from time to time to see how they are doing. Stop in to see them when you are in the area. Let them know you have not forgotten them and always be ready for the referral. A.3 Qualify the prospect: After you find people who need or want to buy your products or service, then you must establish that the prospect has the authority to buy and the ability to pay. This is possibly the most important point in prospecting and qualifying, and it cannot be stressed enough. It makes no sense to spend time on anyone who might want what you are selling, but has neither the authority to buy nor the money to pay for what you are selling. You can do this by asking, "Are you the person who makes the ultimate decision on buying?" Determining accessibility. To buy from you, a prospect must be accessible to you. For example, The President of the India might be a great prospect for a new line of products that you are selling, but if you can't reach him; you can't sell to him. To be successful in prospecting you must first identify or qualify your prospects. One way is to ask yourself where you can find the greatest number of qualified prospects in the shortest period of time. Your answer should point you in the right direction. To be successful in qualifying prospects, you have to ask yourself a number of questions. The salesperson that asks enough right questions to the right people in the right places will always have plenty of qualified prospects. The first three qualifying questions "Who?" "Where?" "Why?" will show you how to find quality prospects. "What?" is designed to help you target your presentation and "When?" can save you time and maximize your energies in the qualification process. Finally, the "How?" questions. They are perhaps the most crucial of all the questions, because many of their answers will evolve from the other five questions. Here are the questions: A.4 Who?
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A few excellent "who" questions you might consider using to convert "suspects" into highly qualified prospects are: Who has the most obvious need for your products or services? Who are the ideal prospects? Don't limit yourself to existing customers.
Describe in detail that your ideal prospects are. Who has the money to buy your products or services immediately? Who has the most urgent need to buy your products? Who has influence on the prospects you are able to identify? A.5 Where? By asking enough "where" questions, you should be able to qualify prospects beyond your current client list. Where do your ideal prospects live, work, socialize, worship or play? Where can you find useful mailing lists of people who fit your ideal prospect profile? Where can you find directories from which you can form your own lists? Where could you go to contact new prospects?
A.6 Why? By using the "why" questions, you can set up priorities so as not to waste your time in qualifying prospects. Why would the prospect be likely to buy your product or service? Why would the prospect resist buying your product or service? Why might this time be good (or bad) to approach the prospect? Why would this person be likely to set up an appointment with you? A.7 What? These questions, if properly used, can boost your qualifying average. What will the prospect find most beneficial about your product or service? What information could you present, or what questions could you ask that would most likely get the prospect to talk about his needs? What more do you need to know about the prospect? What information should you gather about the prospect before you meet with him? What is the single biggest problem the prospect has?
A.8 When? This question is about timing. Don't try to set up an appointment for your convenience. Authorized By Chief Marketing Officer: ___________________ Page 9 of 82
When is the best time to contact a prospect? When is the most productive time from the prospect's point of view? When is the prospect most likely to give you the time you need? When should you contact the prospect again if your first efforts were not successful?
A.9 How? You will not be able to ask many meaningful "How?" questions if you have not fully explored the other five. How can you be sure that you are doing a good enough job of follow-up prospecting? (Look at the Who? questions again.) How can you use your prospecting time more productively? (The "Where?" questions can help you here.) How can you sharpen your prospecting and qualifying skills? (Hint: Search for creative ways to put your products and services to good use. Look at the "Why?" questions.) How can you best approach your prospects? ("Think about the "What?" questions What will they want to hear?) How can you make more time for meaningful prospecting and qualifying the leads you generate? (The "When?" questions will give you a good indication of effective time management.) An acronym that can assist you in qualifying the prospect is BARMAID: B: Just the place where the prospect works (Business address), e.g. South Mumbai. A: Obviously Age R: The prospects physical location (Residential address), e.g. Bandra M: Just the Marital status, indicate by F for female and M for Male A: Association, avocation or hobbies that you are aware of I: Any idea about the prospects Income D: The number of Dependants Weve included a form at the back of this module to assist you with this process. Another acronym that can be used for the final evaluation of the prospect is SANI (see form at the back): S: Seen is it possible to meet the client, or have I already seen him. Sometimes the final test only comes at the point of sale, to see if this is going to be your client or not. A: Ability to pay (afford). Sometimes after doing a personal budget with/for the client do you realize but he/she cant afford making this investment now. Authorized By Chief Marketing Officer: ___________________ Page 10 of 82
KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED N: I:
Does he/she really have a need for your product or service? Interested. Even after you did a thorough needs analysis, failing to interest the client in doing something about it can lead to the client lapsing the policy.
A.10 Thumb rules: Take an organized approach. Never keep leads on scraps of paper or post-it notes. Use a contact management program. Use the point of sales system (Life tree) for effectively managing time, schedules/ tasks, records, leads and information. Never lose or forget valuable leads. Never be late on promised follow-up calls and visits. Never improperly value your prospect inventory. Never fail to do mailings and other footwork due to a disorganized prospect list. Never become a procrastinator when it comes to developing your prospect inventory. Remain alert for suspects who have the potential to become qualified prospects: in todays fast-paced society peoples needs may change rapidly and radically, giving you prospects where you never thought of looking. Develop a prospecting mindset that automatically asks, Is this person a prospect? Remain alert for suspects who have the potential to become qualified prospects: Develop a prospecting mindset that automatically asks, Is this person a prospect? Assume all suspects are prospects until proven otherwise. Keep on looking for new places to find prospects. Continually upgrade prospecting system and strategies Constantly search for people who can give you a referral for every suspect on the list. Cultivate mutually beneficial relationships with everyone who can give leads or open doors for a prospect.
Always secure referrals from satisfied customers
For a steady flow of fresh ideas, you should read books, journals, magazines and business news, listen to cassettes, invest in CD ROMS, watch videos, attend seminars and talk to other successful people
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Fixing up an appointment B.1 Appointment Over the Phone B.1.1 Telephone Script: Salutation Hello Good Morning/ afternoon/ evening. I am ____________ calling from Kotak Mahindra Old Mutual Life Insurance. Could I speak to ______________? (Sir/Madam), Could I have 2 minutes of your time? (if Yes) (For an existing Customer: Talk about his existing relationship and check whether he is comfortable with the products and services. If yes proceed; if not check what his problems are and try to resolve them before proceeding) We would like to introduce Kotak Life Insurance, a prestigious Kotak Mahindra venture operating in Life Insurance which has partnered with Old Mutual plc, a UK based financial services group with over 156 years of vast experience in life insurance. With the recent privatization of the sector, Kotak Life Insurance has recently launched new products in life insurance and we would like to meet with you sometime in the next few days to explain how our products have benefited people like you. Would you like us to talk to you and show you how we can benefit you? (if Yes) I would like to get in touch with you at your preferred date and time. What time is it convenient to meet up with you? In order to come prepared for our meeting and save your time, I was wondering if you could let me have a few details. 1) Do you already have an existing life insurance policy? If yes which plan is it? 2) How old are you now Sir / Madam? 3) Since Life insurance is taken for the benefit of the family, I was wondering iof you could also tell us how many members there are in your family? 3) What address would you like us to meet you at? Authorized By Chief Marketing Officer: ___________________ Page 12 of 82
(if No) Can I call you at a later date and time? (If yes) What time can I call you? (If no) Thank you [Sir/Madam] and have a nice day!
B.1.2 Frequently Asked Questions (for the phone appointment) B.1.2.1 Kotak Mahindra Q. Tell me about Kotak Mahindra? A. Kotak Mahindra group is one of Indias leading financial services groups, offering a wide range of financial products & services. Q. What is the coverage of Kotak group in India? A. With a presence in across 40 cities in India, the group enjoys a widespread reach. It also has offices abroad in New York, London & Dubai. B.1.2.2 Old Mutual Q. Tell me about Old Mutual? A. OM has over 156 years of experience in the life insurance business. It is today an international financial services group based in London with expanding operations in life insurance, asset management, banking & general insurance. Old Mutual is listed on the London Stock Exchange and has already insured over 2 lac Indians based in South Africa where they have a large presence B.1.2.3 Kotak Mahindra Old Mutual Life Insurance Company Ltd. Q. What is Kotak Mahindra Old Mutual Life Insurance Company Ltd.? A. Kotak Mahindra Old Mutual Life Insurance Company Ltd.is a joint venture between Kotak Mahindra Finance Limited & Old Mutual plc. Both Old Mutual and Kotak Mahindra have jointly put up a capital of Rs 153 crores to start this venture. We at OM Kotak life aims to offer a wide range of innovative life insurance products that would help in making the Indian consumer financially independent. Q. Who regulates Kotak Mahindra Old Mutual Life Insurance Company Ltd.? A. Kotak Mahindra Old Mutual Life Insurance Company Ltd.as well as all other life insurance companies are regulated by IRDA-Insurance Regulatory & Development Authority. Authorized By Chief Marketing Officer: ___________________ Page 13 of 82
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B.1.3 General Products We have a range of innovative life insurance products that would help you to become financially independent. We are offering 3 products / plan presently: 1. Kotak Endowment Plan A plan, that offers you protection, as well as savings with a benefit at the end of the term. 2. Kotak Money Back Plan A life insurance plan with periodic survival benefits every five years that can help you make the most of lifes special moments. 3. Kotak Insurance Bond A life insurance policy that avoids the hassles of medical tests & recurring premium payments and offer you a guaranteed return at the end of the 10 year term. B.1.4. Key Objections to Giving Appointments B.1.4.1 Im too Busy
I understand Mr Customer that you are a very busy person and that is why we have called to seek an appointment when you are not so busy. Is ________________ or _______________ convenient for us to meet up with you? B.1.4.2 Send me a brochure / Fax Certainly I will, Mr. Customer, but as a brochure cannot explain how my products can benefit you, we would like to hand it to you in person. Is ________________ or _______________ convenient for us to meet up with you? B.1.4.3. We already have a LIC policy Im glad you already know some of the benefits of taking insurance. In fact most of our existing customers already have an LIC policy and yet they have chosen to take another with us. If we can meet up with you we would like to explain why they chose Kotak Mahindra Old Mutual Life Insurance. Is ________________ or _______________ convenient for us to meet up with you? Authorized By Chief Marketing Officer: ___________________
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B.1.4.4 Tell me about it now I wish I could but I would like to show you how our policies can directly benefit you in particular. To suggest the right policy for you I would need to show you some material in person and explain it to you! Is ________________ or _______________ convenient for us to meet up with you? B.1.4.5 Talk to me later There are certain benefits to taking an insurance policy now Mr. customer. If you are willing to meet up with us we can show you what they are. Is ________________ or _______________ convenient for us to meet up with you? If not keen to meet up When is it the right time for us to contact you?
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B.2 Appointment- Face to face B.2.1. Introduce yourself B.2.1.1 If you knock on a door and it is opened, or if you approach somebody, that person has two questions in his mind: Who are you? What do you want? B.2.1.2 It is therefore of the utmost importance to answer these questions. However, how you do it, will play a major part in whether or not you get the appointment. DO NOT simply start talking, introducing yourself and KMOM and asking for an appointment. This will be both rude and heading for disaster. First defrost the prospect. Do this in a simple way. If you know the prospects name, the following is an option: Good afternoon, Mr Shah. My name is Jayant Rao. Do you have three minutes for me, is it convenient right now? This is polite. It gives him the opportunity to decide whether or not he can talk to you right now (giving people options all the time, is the mark of a skilled salesman). B.2.1.3 If he has the time, proceed. Mr Shah, I represent KMOM and I have an idea that I may have something good for you. I would really like to show you what I am talking about. Now would probably not be the best time, but I would like to make an appointment at a time which suits you best. Would that be in the afternoon or in the evening? B.2.1.4 In this way you are polite and warm, yet firm and professional. Your last question is formulated in such a way that it assumes that he will grant you the appointment. This makes it just that little bit harder for him to simply say no. B.2.1.5 If you do NOT know his name, an alternative approach would be: Good afternoon, my name is Jayant Rao. You are Mr...? Good afternoon, Mr Shah. I would like to ask you something. Do you have three minutes for me, is it convenient right now? If he has the time, proceed. Sir, I represent KMOM and I have an idea that ... B.2.2. Making the appointment B.2.2.1 Now the ball is in his court. If he has objections, deal with it in a polite and professional way, bearing in mind that most objections are not real. Do not take his first or even his second No for an answer. If he persists negatively and does not want to give you an appointment, thank him for his time and bow out gracefully. Authorized By Chief Marketing Officer: ___________________
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If he wants to know what is it all about, a successful reply is: I am glad that you ask that. That is exactly what I would like to show to you. An appointment of about 17 minutes would give me the opportunity to do exactly that. Will an afternoon or evening suit you better? B.2.2.2 By now he should be prepared to negotiate a time for an appointment. Have your diary handy and if he has no preference, give him a choice between two dates and times: Will Tuesday at 7 oclock be OK or would Thursday at 7:30 suit you better? (once again, the skilled salesperson using the options technique!) He will give you a time that suits him. Confirm it by repeating the time while you are entering it into your diary. Make sure that you have his name, address and telephone number correct. B.2.3. Qualify your prospect B.2.3.1 The prospect should be qualified at this stage too. You MUST know a few things about him in order to prepare yourself, else you may be wasting your time. The keyword still remains: be polite and concise. Focus on his occupation and family status, but only use what is appropriate in the available time. Asking for his hobbies, etc. now, may not really be the appropriate time or place. The following can help: Mr Shah, thank you for the appointment. By the way, I did not even ask if you are married. ... Any children?... Their ages? If you did your defrosting up to now in a professional and polite way, he will certainly tell you, upon which the last question can be: If you dont mind, I would like to come prepared, not to waste your time. Your occupation and your spouses? If you are genuine in your questions, he will certainly give it to you. Write it down in your diary. Now you have a firm appointment with a qualified prospect. B.2.4. Confirm the appointment The last thing is the reminder. Write down the date and time of your appointment on the back of your business card and hand it to him. If you have any generic marketing material on KMOMs financial services with you, hand him a copy. It can strengthen the ties immediately. But do it sparsely and without any reference to any particular product, else he will think you are already trying to sell something. Smile (you made an appointment!), thank him once again for his time and excuse yourself.
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B.3 Script for Life Advisor Key points that a life advisors should touch upon when visiting a prospective client. B.3.1 INRODUCTION 1. As you may be aware the insurance sector has recently been open to private sector. The government has set up The Insurance Regulatory & Development Authority (IRDA) to monitor this sector, just as the Reserve Bank of India monitors banks, financial institutions, finance companies etc., IRDA has a stringent selection process for the same including a minimum capital requirement of Rs 100 crores. 2. Kotak Mahindra has partnered with Old Mutual Plc (UK) to introduce life insurance products in India. B.3.2 ABOUT KOTAK MAHINDRA 1. Kotak Mahindra started operations in 1986 when Uday Kotak and Anand Mahindra (Managing Director, Mahindra & Mahindra) decided to come together to form Kotak Mahindra Finance Limited. 2. Kotak Mahindra has grown to be one of the premium financial services group in the country. The company offers financial products in: Consumer Finance Auto Finance Corporate Finance Investment Banking Asset Management Stock Broking And now Life Insurance 3. Kotak Mahindra provides financial solutions to over 400 corporate and 5 lakh individual customers. 4. Today the company has assets worth over 2000 crore with 1200 employees and 40 centers spanning the length and breadth of India. The net worth of the group is Rs. 900 crores. 5. Prime Database, an independent rating agency in India for investment banking has ranked Kotak Mahindra Capital Company as the No.1 investment banker on all parameters for two consecutive years (1999-00 and 2000-01). 6. KMCC was also adjudged the best Investment Banker at the 4th Annual Country awards by Pan Asian monthly, Finance Asia. 7. Kotak Mahindra has the lowest ratio of non-performing assets (NPAs) in the financial circles and has high capital adequacy.
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8. Kotak Mahindra is amongst the top three in car finance, investment banking and retail distribution of financial products. The company has the ability to expand businesses quickly. 9. Kotak Mahindra enjoys a credit rating of FAAA for its fixed deposits by CRISIL. 10. In the year 1996, Kotak Mahindra formed two joint ventures with Goldman Sachs, one for investment banking (Kotak Mahindra Capital Company) & another for stock broking & distribution (Kotak Securities). Goldman Sachs is one of the top three investment bankers worldwide & this was the first time in its 126 years history that they had formed a joint venture in any country. Goldman Sachs has taken a stake in both these companies at a substantial premium. (Goldman Sachs has about 160 Billion USD worth of assets under management.) 11. For automobile finance, Kotak Mahindra has entered into a JV with Ford Credit (a 100% subsidiary of Ford International). Ford Credit has an asset worth of 150 billion USD. 12. In 1998, Kotak Mahindra floated an asset management company, Kotak Mahindra Asset Management Company Ltd., and launched their own mutual fund. It was the first to launch Gilt Schemes in the country. 13. In 2000, Kotak Mahindra signed a MOU with Old Mutual Plc for entering the business of life insurance in India. B.3.3 OLD MUTUAL 1. Old Mutual is a large UK based financial services group with over 156 years experience in life insurance. It has issued over 3.2 million life insurance policies. 2. The total assets under management are US $252 billions. 3. A couple of years ago, Old Mutual shifted its HO to London (from Cape Town) & got itself listed on the London Stock Exchange where it is the third largest insurance company by market share. It is also included on the FTSE 100 list. 4. Old Mutual has substantial business interests in asset management, banking and general insurance. 5. In South Africa, Old Mutual is a household name and has over 30% market share. They serve a majority of the ethnic Indian population in South Africa. 6. Old Mutual has introduced innovative products in South Africa. It has vast experience in customer service and superior training skills for life agents to get high productivity. 7. Fortune magazine has ranked Old Mutual: a. First based on Return on Assets b. Ranked 13th based on new premium collected. B.3.4 About OM Kotak Mahindra 1. The shareholding of Kotak Mahindra Old Mutual Life Insurance Company Ltd. is 74% KMFL & 26% Old Mutual. The start up net worth is Rs 153 crores. The company was one of the first few companies to receive the license from IRDA on Authorized By Chief Marketing Officer: ___________________ Page 20 of 82
10th January 2001. It commenced operation from 17th May 2001 from Mumbai, which is also the HO of the company. It is currently operating from 6 Cities namely Mumbai, Delhi, Kolkatta, Bangalore, Ahmedabad, Baroda & Chennai. The company aims to have a national presence with offices in 13 cities by the end of the financial year.
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2. We believe that everyone wants to be independent and live life on their own terms. This belief has emerged from understanding the consumer mindset that has slowly been entrenching itself. People across India are leaving traditional occupations to pioneer new fields. They are leaving their hometowns to advance their livelihood. Access to knowledge is making them ask questions about age-old beliefs that have so far been sacrosanct. People are now keen on taking charge of their lives and becoming independent. Borrowing from family and friends is no longer seen as an acceptable alternative. People today are planning their lives in such a way that they remain self-reliant throughout. It is this mindset that forms the core idea for our life insurance brand. Independence, social, financial and personal. Hence our brand philosophy: Jeene Ki Azaadi 3. The attached table below shows the financial comparison between the foreign insurance companies that have formed alliances with Indian partners to foray into the insurance sector. FINANCIAL DATA COMPARISON Source: Fortune 500 List (July, 2001 issue) Figures are for the year ended 1999-2000 NAME REVENUE $ million New York Life Prudential UK AIG Sunlife Old Mutual Standard Life 21,450 43,125 45,972 11,141 11,495 18,365 PROFITS $ million 1,205 1,043 5,636 424 767 Assets Under Management $ million 138,242 393,000 219,180 219,022 252,000 117,000 ASSETS $ million 97,101 231,463 306,577 37,151 69,351 118,728
Note: Assets Under Management sourced from Annual Report/ Company website Exchange Rate: I UK Pound = 1.5 US$ 1 Canadian $ = 0.667 US$ OUR PRODUCTS KMOM offers you 3 plans. Kotak Endowment plan Authorized By Chief Marketing Officer: ___________________ Page 22 of 82
Kotak Money back plan Kotak Insurance bond The Approach talk: Setting the stage C.1 What? Here we are specifically looking at that what is said at the occasion when you first meet your prospect to discuss business. The way you manage his perceptions of yourself, your company and your service during the first minute will be of critical importance to the rest of your discussion and even the rest of your relationship with him. Obviously there is more than just one successful way to approach your prospect. There are, however, basic principles that must always be adhered to. As long as it is ethical and does the job, use it. C.2 When? The first 60 seconds you spend in your clients presence will be of critical importance and will play a major role in your prospects decision whether or not he will place business with. C.3 How? What, then should I do or say to optimise my chances of success. Here it is important to remember that the prospects perception of what you want to do, may differ vastly from yours. Therefore, you must lead him to get on the same wavelength as you are. This will help him to focus on your aims with the discussion. By using simple steps to outline the process and the benefits of the interaction. This will help you to manipulate the prospects thinking. This is exactly what we want to achieve with an APPROACH TALK. C.4 Why? Just imagine all those suspicious unknown aspects many of which we do not know, that may go through the prospects mind when you first meet him. Things that, if he had the answers, would have put him at ease, relaxed and quite happy to disclose information to you. This is exactly what you want to achieve with your approach talk. Your sales personality is extremely important to your sales success, because your first 60 seconds with a prospect can be the utmost crucial. You have to sell yourself as being trustworthy, knowledgeable, and interested in the prospects welfare. Times have certainly changed, and so have selling. The information explosion, both written and electronic, has created a more knowledgeable customer with an increased Authorized By Chief Marketing Officer: ___________________ Page 23 of 82
sensitivity. If you dont know your product or service very well, you are on the way to extinction.
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C.5 What should be said? This is the difficult part. What is it that the prospect wants to hear? Should you break the ice? Should you flatter or compliment to make him feel good about himself or his possessions? Should you get on first-name terms? The majority of people would like a sales intermediary to use a little time to first build rapport (get acquainted) and then come to the point straight away. Many clients, however, may like the opportunity to acquaint themselves fully with the intermediarys credentials: who he is and where he comes from. Such an opportunity should ideally be created if the need exists. Establishing rapport (icebreakers, small talk) is very beneficial for creating a warm environment, but should be handled with caution. Some people may be suspicious of a hidden agenda when they are anxious to know if there is a catch and getting to the point is delayed too long. The prospect is well aware that the purpose of your visit is of a business nature. Therefore, use a little time to build rapport and then get to business. Remember to be real. Be careful not to get too familiar. Everybody does not take kindly to first-name terms in business. Allow the prospect to take the initiative and respect his view of this matter. C.6 What should be said once I have built rapport? Link between icebreaker and business: Some intermediaries have difficulty in finding the link between the icebreaker and the real reason for the visit. The icebreaker should not continue beyond 5 minutes. This is more or less the time you need to prepare you workstation. Remember always to give your undivided attention to the client, whilst preparing the set-up. Dont get so involved in the preparation that the client feels neglected. Keep eye contact and listen intently. Clients often offer you something to drink. This could contribute to the problem, and also waste time. Politely refusing it until after the interview, gives the client the message that you have some important matters to discuss and also gives a wonderful opportunity for the follow through at the end of the sale, e.g. Thank you very much, but if you dont mind, Id enjoy a cup of coffee when were done. What Id like us to do This smoothly leads you to the next step. An approach talk should therefore be short, to the point and, very important, in simple language. It is of no use to try and impress the client with your knowledge, if you lose his personal interest in the matter. The approach talk is your advertisement of your service and it should be done in such a way that the client wants to be part of what follows. Authorized By Chief Marketing Officer: ___________________
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C.7 EXAMPLE Mr Client, you are obviously interested to know exactly what I have in mind with my visit to you. May I ask if there is anything in particular that you would like us to discuss? No, not at this point. Then, may I ask you: Do you know what my work with clients such as yourself involves? No, not really. Let me explain. My function at Kotak Mahindra Old Mutual Life Insurance Company Ltd. is to offer my service to clients by means of our financial products. Now you may probably think Oh yes, here to sell me a policy! Not quite so. As a professional I can only render a professional service to you if we can both sit down and get clarity on your financial objectives. Secondly, you obviously have plans on how to achieve these objectives. We should then together establish to which extent your plans are on target in terms of your goals. If so, very well. If not, we can determine which adjustment to make to get on target. My responsibility would then be to show you which financial product would best do the job. What then is the benefit to you? Firstly, you will have a clear picture of your financial objectives. Secondly, you will know to what extent you are on target. Thirdly, you will know which adjustment to make, if necessary. How long will we be? I shouldnt think much longer than say, 35 minutes. All financial planning revolve around two elements, namely the creation of wealth and the protection of wealth. Where would you like to start - the creation of wealth or the protection thereof? C.8 Tips Some important things to note: Rather use we than I. This keeps the prospect part of the process throughout. Body posture is extremely important. Be relaxed, but lean forward when you speak (to emphasize what you say) and look your prospect straight in the eyes. Smile! It creates a friendly and relaxed atmosphere. Be warm, yet firm. The prospect must sense that you are doing the work and he will be the one to benefit. Be genuine and focus on his plans, his objectives, and his needs. Show him that he can trust you and that you have no hidden agenda. Authorized By Chief Marketing Officer: ___________________ Page 26 of 82
Never promise anything or make any claims that you or KMOM cannot deliver. Not only may you lose your client, you may also lose your job!
A final word... It is important to develop your own approach talk. If you know exactly how to start the discussion, you will have more confidence. This makes you more relaxed and puts you in a position where you can think freely and be creative. Keep it simple and short. Remember: you must be able to memorise the approach talk and to use it in a warm, yet firm manner. Not only does it put you in a relaxed mood, but also the client will perceive you as professional and competent.
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Needs Analysis D.1 People do not buy life insurance easily - at least not all the insurance they need, because by sheer force of habit they think that they only need tangible forms of real wealth (like fixed deposits, bonds, shares etc) that can provide better future income. D.2 Life Insurance, like any other form of saving, involves sacrifices in terms of present desire. It is difficult to forgo present comforts for future benefits. Usually, men prefer to live completely in the present till someone makes them think of their future needs. The life advisor, have to be that someone if you are going to be successful in your career. Prospects need help with: Buying a house Making a Will Education planning Investments Estate planning Retirement planning Business Planning Protecting their income Protecting family interests Financial Goal setting
D.3 Immediate and Comprehensive Needs Analysis D.3.1 Needs Analysis has been simplified and segmented into two parts Immediate and Comprehensive. In the Immediate Needs Analysis, the Livable Income needs of an individual are looked into and a calculation of the same is made based on various parameters like total expenses, tax rate, earning rate of capital etc. D.3.2 A Comprehensive Needs Analysis, on the other hand, will take into consideration all the needs of the individual, including the livable income needs. The other needs could be in the form of retirement fund, childrens education fund, childrens marriage fund, loan redemption fund, emergency fund, last rites fund etc. A Balance Sheet of the individual is then constructed taking the above into account along with the assets owned by the individual. D.3.3 The following are the various needs a human being might have either for dependants or oneself: 1) Livable Income Fund Livable income or income for the family is one of the major human needs and therefore the prime responsibility of every family man. Authorized By Chief Marketing Officer: ___________________ Page 28 of 82
It is, therefore, for the salesman to explain to the prospect the necessity of life cover for satisfying his familys future income needs. It will be seen that no savings plan, except life insurance, can guarantee an adequate income to the family, under all circumstances. 2) Last Rites and/or Emergency Fund Death always entails expenses wherever and whenever it occurs. Someone must pay the medical and funeral expenses, unpaid bills of the grocer, rent, rates and taxes. These are termed as last rites expenses. Similarly, an emergency fund is one where a provision is made for a contingency that could arise without any warning (like an illness in the family) 3) Education Fund Policies taken solely for the purpose of childrens education will cater to this requirement in the event of unfortunate occurrences like death of the parent. 4) Marriage Fund The needs for a marriage fund are similar to the education fund and can be met by an endowment policy. The policy should be taken on the life of the breadwinner of the family. 5) Retirement Fund Every man visualizes for himself a period of peaceful retirement in old age. Even if one is able to set aside for old age expenses, one must constantly face the problem of safely investing these funds. Granting that one is able to invest wisely, the risk of running short of funds cannot be overruled. Life Insurance is not only the safest investment; it also guarantees that the planned income will reach the individual as long as he lives. Almost everyone who depends for income in his old age, is a prospect. 6) Loan Redemption Fund Life insurance for a sum equal to the balance of the loan is one solution. If the borrower dies when the loan is considerably reduced, the excess balance from the insurance policy is paid back to the survivors. Authorized By Chief Marketing Officer: ___________________
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D.4 Techniques in Financial Planning To determine what kind of insurance cover is adequate for an individual, certain scientific techniques are employed. Two amongst these are Human Life Value and Capital Needs Analysis. While the first method takes into account the earning potential of an individual, the second stresses on the fact that a persons needs may exceed his resources and therefore he will need to budget for the excess also. D.4.1 - Human Life Value (HLV)
Human Life Value

E = Earnings per annum M = Self maintenance expenses N = Earning span in years A ~ I/N = present value of an annuity of Re 1 p.a. for N yrs at interest I E M = family share of income HLV = (E-M) * PV (A ~ I/N)
HLV & CNA
To understand the concept of HLV, lets take the following illustration : Mr A is 28 years old. He earns Rs 1,20,000 per annum (E). He has two dependants (wife and one child). His self-maintenance expenses (M) amount to Rs 40,000. Mr A would like to retire at age 58 years and would like an estimate of his HLV. In the unfortunate event of Mr As death, his dependants would need at least Rs 80,000 p.a.. (E-M) for maintaining a standard of living similar to what they are used to. This amount of money would be required for a period of 30 years (N) since Mr A is 28 years old and plans to work till the age of 58 years. To calculate HLV, we need to refer to Authorized By Chief Marketing Officer: ___________________
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annuity tables to get the present value of an annuity of Re 1 for 30 years at an assumed interest rate I. Assuming the interest rate to be 8%, the present value will be Rs 11.26.
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Therefore HLV of Mr A is: HLV = (E-M) * PV (A ~ I/N) = 80000 * 11.26 = 900800 Which means Mr A should be insured for Rs 9,00,800 if his family is to receive Rs 80,000 p a for 30 years after his death. Both, the principal and interest will be used for making the annuity payout in the above case. D.4.2 - Capital Needs Analysis (CNA)
Capital Needs Analysis

Capital Needs

Emergency Fund Mortgages Education Fund Marriage Fund Asset building Fund
Income Needs

Family/Spouse income Retirement Income
HLV & CNA
We have seen earlier in this module, the various needs of a human life both while alive as well as after death. While the HLV technique focuses on an individuals earning ability (resources), the CNA method looks at the requirements of the individual and his dependants (needs). Needs are categorised into two types : capital needs and income needs. Needs like marriage fund, mortgage fund etc would fall into capital needs while those like family income or retirement income will fall into the income needs. We take a step further and construct the Balance Sheet of the individual
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Balance Sheet
Liabilities
Housing loan Other loans Emergency Fund Education Fund Marriage Fund
of the individual
Assets
Insurance policy PF + Gratuity Savings/Investments Vehicle/Movable property
Insurance required = Capital Fund Performing Assets + Liabilities

* Where CF is the fund needed at interest rate I p.a. to earn the required E-M
HLV & CNA
Insurance requirement as per the CNA method takes into account the shortfall between performing assets and liabilities to arrive at a more realistic insurance cover figure for the individual. Performing assets are defined as those that can be immediately converted into cash to enable funding of certain essential liabilities. Here we take the capital fund (defined as the fund required to earn E-M at interest rate I) and reduce all performing assets. We then add all the liabilities to arrive at the insurance required as per the CNA technique. Both the above techniques (HLV & CNA) help in a realistic calculation of the insurance requirement of an individual.
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The Presentation - Theory E.1 Introduction An effective presentation is vitally important to becoming a successful insurance salesman. And it is really very simple to master this art. There are certain basic steps to be followed, which, if you do it properly, will almost certainly result in a sale. Bear in mind that the presentation is but one step in the selling process, following on the successful completion of the following: People are not interested in how much you KNOW, they are interested in how much you CARE Making the appointment Establishing rapport Probing for the clients need or desire Convincing the client to act now Exploring alternatives (other than KMOM products) Matching the correct KMOM product to the clients need.
E.2 Confirm the clients need You need to highlight the need that was disclosed earlier, in order to bring the client back to the focus of the discussion. This is done by summarizing what has been said up to that point. Phrases like Lets recap ... or To summarize what we said ... can be used with good results. It is important to not only summarize the contents of the need or desire, but especially the reasons for that need or desire. To recap: You want to supplement your retirement provision, in order to make sure that you will be able to retire financially free, because your current pension fund will only supply 60% of your current income, and that will not be sufficient to maintain your standard of living. There are a few important points that need to be considered at this stage: It is very important that the client understands and agrees that a need exists. Get that commitment before continuing: Mr Client, in the light of the information I got from you can you see that were sitting with a shortfall of (see Needs Analysis). It is equally important that he/she realises that, as with motor vehicles, there are several possible solutions to his/her transport problem, with definite financial implications. This helps the client to focus on the benefits of your solution, rather than on his current concern.
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E.3 Discuss/explore alternative solutions E.3.1 Now is the time to put forth the options that KMOM offers to satisfy his need. Always present more than one possible solution. This has various benefits. You give the client the opportunity to make his own choice. This means that you did not force any decision on him, but because he has decided himself, the possibility of buyers remorse is minimized. E.3.2 By showing the less attractive of the two options first and then moving to the more attractive one, you create a feeling of Aha, thats what I want!, which makes the closing of the sale easier. E.3.3 At this stage some advisers start off by asking the client what he/she can afford. This question often causes either the loss of the sale or the writing of a smaller premium than the client can really afford. It can also lead to the clients need not being addressed fully. A large number of people are under the impression that they cant afford any life assurance. They are not aware of the large amount of money they spend on less important things, purely because nobody has taken the time to illustrate in simple terms that they actually cant afford not to have life assurance. E.3.4 It is not suggested that the client be over committed with large premiums (this might lead to lapses at a later stage), but that the need must first be established without talking any cost, and that the solution to said need must be tailor-made within the clients available budget. E.3.5 The computer can be used to explore possible solutions to choose from. E.g.: So, Mr Client, as the analysis reveals, the problem that were having is that, should you die today, your family is going to sit with a monthly shortfall of! There are several options that we can look at to solve this problem. Let us have a look at possible solutions E.3.6 If the client says its too much, you can start moving towards a point where the client feels happy with the product and the cost. This we do by gradually decreasing the premium and all the time illustrating the implications of the change before going to another product. The client is now balancing price and value in his own mind. He is part of the search for a solution that fits his unique situation, and experiences that the financial adviser is really acting in his best interest. E.3.7 The client and financial adviser now become a team fighting the problem that the analysis has pointed out, searching for solutions, which the computer again will supply! This step very often determines to what extent the client objects. If you are successful in presenting the right solution to an agreed need, you shouldnt get objections. Authorized By Chief Marketing Officer: ___________________ Page 35 of 82
E.3.8 Do not discuss the options in detail. Briefly outline each: how it works, what the benefits of each are. Then ask your client, Which one would you prefer? His answer will then indicate on which solution to concentrate. If he has questions about any options, answer them to the point and follow again with the question about which one he prefers. E.4 Present the solution Here you focus solely on the option he has indicated as his choice. Make sure that he understands how the policy works, without going into technical detail, unless he asks for it. Very important: Turn the features of the product into benefits for the client. In other words: Not What does the product do? but What will the product do for me? Keep control of the selling situation and you will give yourself the best chance to make a sale. E.5 Win Win tool It is important to spend time considering your clients side of the case. It will allow you to determine your strengths and weaknesses; show where selling wants and needs are required and open the negotiation at the right point!! Conscious decision to work active towards mutual satisfaction Selling or Negotiating Selling = Persuading your prospect of their need to transact business with You Negotiation= The give and take process whereby the actual conditions of the transaction are agreed You can survive with selling skills alone result: - Lot of minimum premium business Real success comes through negotiation result: Higher premiums
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E.6 The one-month rule: Your income will rise due to career opportunities and promotions. It will then level off until retirementthen it will DROP! However, you may have made provisions or rely on pensions! Changes in tax rates, inflation and commitments reduces your spend able income. Some of these burdens may not go away in retirement! o To solve some of these problems, we recommend you to invest your onemonths salary to fund for your financial security! However, if something were to happen to you, before you make enough provisions!! What happens to the plans.? The way in which my company would help you meet both your objectives: Reduce your tax liability, by selection of tax efficient investments Invest your money wisely and carefully to obtain a higher return over the rate of inflation Your future plans and needs would be protected by selecting the appropriate contract to suit your needs. I will review your plan each year to ensure that you achieve your goals
The recommended figure is 1/12th of your annual salary, which is Rs.________per month/ per year. This would take care of your future!
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E.7 Objection Handling E.7.1 Winning Strategies 1. 2. Find the real objection. Many objections are just smoke screens or excuses for not acting now. Use questions to determine if there are specific, valid objections and focus on them. Do not overreact. Do not try to defend. Ask the person to elaborate on his/her objection, clarify that you have heard it correctly and show empathy by acknowledging that you can understand that he/she might say or ask that. Then focus on the benefits again. Confirm the objection. Let the client know you have heard him/her, by rephrasing the objection. This helps you to be absolutely clear on the issue, gives you time to think and shows the client that you are serious about his/her concern. Do not argue. You may win your argument, but lose your client. Ask for the reasons behind his/her objection. Why do you say that? Then rather focus on the features and benefits of your subject matter. Handle the objection at the right time. If the objection is the result of a misunderstanding, handle it immediately to put the fact right. If the information is only relevant at a later stage, make a note of it and handle it at the appropriate time. Respond with a sales point. This takes skill, but for every objection, there is a very strong sales point to balance it. Look for that in your product or service and use that to speak for itself.
3. 4. 5.
6.
7. Use the triple A formula ASK the person to elaborate. Often they give you an indication whether the objection is real or not and they sometimes answer it themselves. ACKNOWLEDGE their point of view by rephrasing it and making a note of it. This alleviates pressure and the client feels that you are handling his concern. ANSWER the remark or question. The most effective way is by means of another question. Let them do the talking and build onto what they say. As a general rule, the following three steps in handling and overcoming objections will result in success more than 80% of the time: When the objection is raised the first time, simply nod your head and ignore it, carry on, do not be distracted. Many objections are just reflex questions or statements and are not really what they seem (like a small dog barking loudly, but not really with the intention of biting). Authorized By Chief Marketing Officer: ___________________ Page 38 of 82
The second time, acknowledge it by making a note of it. If the objection is not raised again, do not react to it, treat it as a reflex question. The third time, handle it. Use the Triple A formula. E.7.2 A last word For many people it is not the normal thing to accept other peoples viewpoint or advice. You will meet such people. Objections would then be encountered. But they are only playing a game of power. They want to feel partly in control and want to see how strong and confident you are. If you let them distract you by reacting to every single objection, they are in control, not you. And then it will be very difficult to get the business, because you operate from a position of weakness, not strength. Always be warm, yet firm. People will respect you for that and will perceive you as a professional, which you are. Objection can be defined as a symptom of sales resistance that emanates from a mental hindrance. In almost all cases of Life Insurance Sales, objections are raised. Hence, from the very start, be prepared for the objections. Over a period of time, you may even be able to predict 90% of the objections. E.7.3 In summary Even if you are reasonably sure of the objection to come do not take the thing as granted. Handle each objection only after listening carefully. Pay attention to each objection. Whereas an appropriate handling of the objection may make a case, an inappropriate handling may mar it. Objections may be of various types. A list is given in the back, which is suggestive but not exhaustive.
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E.8 Dos in objection handling: 1. Listen to the objection very carefully. Gather all the relevant data before you reply. Treat this as an opportunity to successfully close the sale. 2. Categorize the objections as: i. An objection or Reluctance. ii. An objection or Postponement iii. An objection or Escapism. 3. While dealing with objection handling rely on AAA formula of ASK, ACKNOWLEDGE, ANSWER. 4. Identify the reason of objection if it is not so obvious. E.g. if the client has been approached at a wrong time which may cause him to feel irritated. He may in such a case, raise a objection that is not real. This is an objection on selecting a wrong time and not the business as such. 5. Be constructive and always have a positive attitude while handling objection. E.g. Client Your suggested term is too long. I want the benefits to come more quickly. Reply Well Sir, I appreciate your point and let us see how we can best adjust the plan; if need be. 6. Emphasise on the value addition, which the Policy will bring for the family with each passing year. 7. Reassure the party on the decision of buying the Insurance, the product and service of the Company. 8. Always have pre-call planning which will make you successful in dealing with objection when you meet the customer.
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E.9 Donts in Objection handling: 1. Do not take it personally A customer does not know you. But sometimes, sales people think so. He is objecting on a product or its benefits or the service. Be professional while replying. e.g. Client Your office people never pick up the phone, it is highly irritating even to think of telephoning. Likely reply If this is your experience, you definitely have a cause to feel bad. Many other customers may also feel so. Thank you, I will take up this matter with management. 2. Never get irritated or angry Here too the above principle applies. i.e. he is not telling this to you as a person. 3. Do not argue From life advisor to client Your perception is totally incorrect and I do not agree at all. Such talks should not be indulged in to. Remain professional. Imagine what would have been your reaction after getting such reply, if you were the customer. 4. Do not start narrating Product Features before you talk to the customer and analyze his needs. You should not propose any product till you understand his needs. 5. Do not tell anything which is not true. You must first be convinced about your products. You should base your discussion on the features available in the product and should not exaggerate. Making untrue or inaccurate statement permanently spoils the image of not only the life advisor but also the company. 6. Do not surrender. It happens when as a life advisor you will agree to the point made by your client that there is some change in the circumstances. e.g. Let me see how best we can satisfy your requirements. Other things to avoid are: Attacking Insisting Suppressing Dismissing Patronizing Pleading
E.10 Examples of objection handling If the objection is handled well, it will get you closer to the sale. The routine sets of objections are:
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Ref : CMO\Individual\Sale KOTAK MAHINDRA KMOM LIFE Life Advisors 003 OLD MUTUAL LIFE INSURANCE CO LTD Sales Process Date of Issue: January 29 INSURANCE LIMITED Sr. No Objection Your approach 1 I dont need insurance Almost everyone needs insurance. The need may differ right from retirement/family income to educational/marriage funding for children. We are certain that you will be convinced after a needs analysis that you do require insurance. 2 Its a good idea, but see me after Its never too early to take insurance. If you start early a year. you get the benefit of lower premiums owing to a lower age. 3 Your insurance plan is good, but I We would still like to tell you about our plans and how have a friend in this business. they could cater to your needs appropriately 4 Your insurance plan is good, but Then you should please put this plan in a safe place with my wife does not want me to take a letter to your wife that you were committed to taking any more insurance care of all her needs not only while you were alive but long after you were gone. 5 My horoscope shows that I am Then you need to provide for your old age. Living too going to live till I am very old. long is also a risk and an insurance policy will take care of early death as well as long life. 6 I have an insurance policy and We can ascertain whether you are adequately insured dont need any more Insurance using proven techniques like HLV & CNA. You must take additional life cover if not adequately covered 7 I am in perfectly sound health and Death/Accidents/Illnesses cannot be predicted. Their will live long enough to take care timing is unknown. One has to be prepared in advance. of my dependants The best time is now. 8 My husband has a policy, so I God forbid, should something happen to the regularity dont need one of income of your husband the money receivable on this policy will be very useful to both of you. 9 I prefer investing in other avenues Your investments may have earned you good returns in as compared to life insurance the past and will continue to earn you good returns in because the returns are superior the future too provided you are around to enjoy the same. In any case, the kind of financial security insurance provides, no other investment does. 10 I am single and do not need Some day you will be married with children. Even if insurance you do not plan to get married, you are surely going to get old and will have no one to take care of you then. Your policy money will definitely be useful at that stage. 11 Insurance is against my religion Does any religion guarantee that it will come forward to protect a mans spouse/children after he is gone ? If not, then one needs insurance. 12 I have utilized my tax Insurance is for financial security. Tax benefits are only rebate/deduction benefits. Hence incidental. In any case, the biggest incentive of further insurance will not be an insurance is the peace of mind it provides by ensuring incentive. the well being of ones dependants.
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Ref : CMO\Individual\Sale KOTAK MAHINDRA KMOM LIFE Life Advisors 003 OLD MUTUAL LIFE INSURANCE CO LTD Sales Process Date of Issue: January 29 INSURANCE LIMITED 13 I find it difficult to save, hence If you dont save, you need insurance more than others. will not be able to pay the Because, people who save might still have some premiums property/assets to leave behind for their dependants. Those who dont save must definitely take insurance. 14 My wife is capable of taking care Would you want your wife and children living in a of herself and the children should world of uncertainty after you? Would you want your something happen to me. wife to be looking for employment to make ends meet? If not you need to be adequately insured. 15 I believe in destiny and know that One has to be realistic. If things go wrong, the future whatever happens will be for the and livelihood of your dependants will be at stake. Can better you take such a risk? 16 I am not afraid of death If you are concerned about the well being of your near and dear ones, you need adequate insurance. 17 I am not sure I will be able to pay Then you must split your insurance into more than one the premiums in future on my policy. If, for compelling reasons, you are unable to pay policies the premiums on all the policies, at least continue paying on those policies for which funds are available. 18 Private sector life insurance All insurance companies are required to keep a solvency companies cannot be trusted. fund to meet claim payments. This is governed by the stipulations laid down by IRDA and has to be stringently adhered to. Hence your money is completely safe. 19 Private sector companies will The IRDA has laid down guidelines on investments of invest our funds in risky avenues insurance companies and these have to be strictly like stocks. We will lose our hard adhered to. No company is allowed to invest in any earned money other manner other than that stipulated 20 My assets will be useful to my Your assets may not earn regular incomes to take care of family should something happen day-to-day expenses. The money received from an to me. insurance policy can be invested to receive regular income
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Closing the Sale - Theory F.1 Introduction Closing the sale is the ultimate focal point of the interaction between you and your client. This is when he decides to accept your advice and agrees to buy the policy from you. Closing the sale means, help the client to make the right decision. For many people making decisions is not easy, nor do they like it. If you can ease the process of making the decision, your client will enjoy doing business with you. In order to close a sale effectively, only two things are needed: The ability to recognize a buying signal The skill to use the right closing method.
F.2 Buying signals A buying signal is any question, remark or gesture from the client that indicates a favorable position for you to close the sale. In other words, he shows that he is ready to make a decision about your proposal. Buying signals can be grouped in two: Verbal buying signals Non-verbal buying signals. F.3 Verbal buying signals The client admits that he likes or needs what you propose: This education policy is just the thing that we need. He asks questions about your proposal: Will I need any extra retirement investments if I take this Endowment Plan? He thinks beyond the sale: If I should buy another house in ten years time, will I be able to use the life cover as security for that property too? Mentally he is in the process of buying: I suppose the premiums can be deducted by debit to bank account instructions? F.4 Nonverbal buying signals The client reads again (and maybe again) your marketing material, quotes, graphs, statistics, etc. Referring back to this material shows that he has an interest in what you have. Facial expressions and physical gestures, a smile, nodding his head or relaxing his arms can all indicate that he is positive to move ahead.
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F.5 When to close The golden rule is: close as soon as possible. If the client is ready, close immediately. Documentation and other necessities as well as nice to know information can be shared afterwards. Generally, there are three very clearly defined opportunities in a sales interaction when closing the sale will be appropriate: At any time when the client gives you a buying signal. After you have described the features and benefits of the product to the client. After a question or objection has been handled, and you have restated the benefits again. F.6 Trial close The trial close is a way of testing the water. You want to find out how ready the client is to buy your product - is he still interested, has he made up his mind? This means that you may still be busy with your presentation, or that the client is telling or asking you something, at which point you wonder: Is he not perhaps ready yet to say yes? This can be determined by a trial close. A typical way of formulating the trial close can be any of the following: Mr Client, by saying this, are you telling me you have made up your mind? Mrs. Client, Im just wondering, if this is your only concern and if we can take care of it, are you then saying this is what you want? Miss Client, if you should invest your money with us, would you have preferred the KOTAK Endowment policy or the KOTAK Insurance bond? If the client gives an indication that he has made up his mind, that he wants this product, get to the paperwork in a courteous manner and clinch the deal. Stop your presentation, for the time being, anyway, and help him to put his decision to practice. F.7 How to close the sale There are many, many methods and techniques of closing a sale. Each salesperson has his own style and therefore prefers some methods to others. It is important to realise that you must find, adapt and use those methods that will suit your style best. Not to create confusion, we are going to look at only four methods of closing the sale. F.8 Ask for it The most common and straightforward method of closing the sale is to ask the client if he wants it. This saves time, is easy to remember and the client knows exactly what you are talking about. Mr Client, we have established that you need more life cover and you have indicated that you will be able to handle an investment of Rs 200 per month. This proposal offers exactly what we have set as our aim and the investment fits into the maximum. This is what you want, is it not? Shall we then proceed with the documentation? Authorized By Chief Marketing Officer: ___________________ Page 47 of 82
F.9 Alternative of choice When you offer somebody a choice between two options, you are not only showing respect, you are also putting the client in a position where he feels in control. This is exactly what this closing method can do. We have seen that, for retirement planning, the endowment policy as well as the retirement annuity can be used. Which one do you prefer: the endowment or the retirement annuity? F.10 Assumed decision With this method you assume that the client has made up his mind and knows exactly what he wants. Therefore you simply start filling in the application form and if he does not stop you, you finish it off. Mr Client, I am glad to see you know what you want and it is a pleasure for me to be of service to you. What are your full names ? Although this method may seem abrupt or even discourteous, it is not. If you have done your presentation professionally and answered all questions properly, the client expects the documentation to be the next step. Simply relax and get going with the documentation. F.11 Courtesy close This method is exceptionally successful when dealing with more than one decision-maker at the same time, for example a husband and wife. In most cases they want to discuss your proposal together, but in private. What often happens, is that they will tell you after your presentation that they will discuss it and then come back to you, which often they do not do. Many promising sales have been lost this way. The answer is very simple. Even before they may say that they want to discuss it, give them the opportunity to do exactly that. Excuse yourself, letting them know what you want them to do. Mr and Mrs. Client, I am sure you would like to discuss some points between the two of you. If you dont mind, may I use your bathroom, and in the meantime you can discuss our proposal and decide which way to go. Now give them a few minutes to discuss and decide. Three minutes will be more than enough. If you have included the alternative of choice method as part of your presentation, now giving them the opportunity to decide between two options, you have a sure winner! Other excuses to leave the room may be to fetch something in the car or to phone the office or your home (preferably on your cell phone). When you return, simply use one of the other three methods to close the sale.
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F.12 General notes to closing the sale Never think that it is too early to close the sale. If the client tells you upfront what he needs and wants to invest, do a test close there and then. If he accepts, close the sale and then proceed to do the documentation. Always observe the shut up principle. After you have asked your closing question clearly and well formulated, keep quiet. Shut up. Do not say a word. Do not be afraid of or uncomfortable with silence. As a general rule, the one who then talks first, loses! You have asked and the client must now respond. Many salespeople talk their clients into the sale, just to talk them out of the sale again. If two decision-makers differ on what should be done, keep quiet and observe very closely. One of them will be doing the work for you. Listen carefully to what they say and do not interrupt. Do not take sides at all! At a certain point they will turn to you and then you will know which key points to re-emphasise. If you can succeed in finding an answer that will satisfy both, nobody will lose face and each one will feel that his/her approach worked. F.13 Following through After the customer has signed the application, hes often uncertain of himself and might feel that he made a mistake. Its crucial that another 5 - 10 minutes are spent with him. The cup of coffee offered to you at the beginning of the interview (or another one) is now a very good idea. Anything that the customer feels like talking about is now the object for discussion. The customer might want to ask more questions around the product that he has just applied for, or talk about the other services that you can offer, or pick up on the discussion that you started out with at the beginning of the interview, etc. To really be able to work on a trust relationship, regular contact with customers is of the essence. Two contacts a year (six monthly) would give you this opportunity. Following through gives you the chance to discuss this with the customer and also to prepare him/her to hear from you when the application is finalized. You can even secure a service appointment six months from now. This will also give you a wonderful opportunity to ask for referrals. Even if you did not close the sale, leaving with a list of potential customers makes the interview still worth your while (win-win).
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Maximum Risk Cover Allowance

AGE GROUP UP TO 30 YEARS 31 TO 40 YEARS 41 TO 50 YEARS 51 TO 60 YEARS ABOVE 60 YEARS MAXIMUM COVER ALLOWABLE AS A MULITIPLE OF ANNUAL AVERAGE INCOME 20 TIMES 15 TIMES 12 TIMES 10 TIMES ON MERITS
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Premium Calculation
Premium calculation is an important component of the entire process of selling a policy. To be able to calculate premiums accurately for the various plans of Kotak Mahindra Old Mutual Life Insurance, we will need to understand certain terminology. We will also need to follow defined steps as given. Terminology: 5.1 Cut-off Sum Assured: The cut-off sum assured is that sum assured where for a given plan at a particular age and for a required term; the premium is exactly Rs 15,000. We require to check the cut-off sum assured for each and every calculation since the rate (PR1 or PR2) that is used depends on whether the proposed sum assured is less or more than the cut-off sum assured. 5.2 Premium Rate 1 (PR1) : We use PR1 (from the tables) whenever the proposed sum assured is less than the cut-off sum assured 5.3 Premium Rate 2 (PR2) : We use PR2 (from the tables) whenever the proposed sum assured is more than the cut-off sum assured 5.4 Modal Factor: The modal factor is that factor by which the annual premium or rider premium is multiplied to arrive at the modal premium. [If annual premium is Rs 10,000 (10,000*1.0) half yearly premium is Rs 5,100 ( ie 10,000*0.51) and quarterly premium is Rs 2,600 (ie 10,000*0.26) Here 1.0, 0.51 and 0.26 are the respective modal factors] 5.5 Modal Policy Fee: It is a flat fee (Rs 0, Rs 15 and Rs 20 for annual, half yearly and yearly respectively) charged after adding the basic plan modal premium (A) and the modal rider premium (B) The aggregate of A+B+C gives us the modal premium (quarterly, half-yearly or yearly, as the case may be) that the client has to pay for that policy. It is recommended that one should follow the steps given below and use only the preprinted premium calculation sheet for the purpose of arriving at the right premium figure.
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5.6 STEPS IN BASIC PLAN PREMIUM CALCULATION
Identify the Proposed Plan Identify Term; Age; Mode of Payment Identify Sum Assured Use Age and Term to Identify the Cut Off Sum Assured Check if Proposed SA is less than Cut off SA If Yes, take Premium Rate 1; Annual Premium = (SA/1000)* Premium Rate 1 If No, take Premium Rate 2; Annual Premium = 15000 + [((SA- Cut Off SA)/1000) * Premium Rate 2] Multiply Annual Premium by Modal Factor Yearly = 1 Half Yearly = 0.51 Quarterly = 0.26 Round off the Modal Premium to the nearest rupee (A) 5.7 RIDER PREMUM CALCULATION Identify the riders chosen Identify the Term for the Term Cover only (as other riders premium dont vary according to term) Identify the Sum Assured for the rider (Please check for rider limits) Identify premium rates for Term Cover rider using term and Age. ADB & PDB are fixed at 0.8 and 0.4 respectively. Calculate Annual Rider Premium = (Premium rates * Rider SA) / 1000 = AP Calculate Modal Rider Premium = Annual Rider Premium* Modal Factor (Please see Step 8) Round off the Modal Rider Premium to the nearest rupee (B) 5.8 POLICY FEE CALCULATION Identify Policy fee Quarterly Mode Half yearly Mode Yearly Mode (C) Rs. 20 Rs. 15 Rs. 0
Add (A+B+C) to arrive at the Modal Premium
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5.9 PREMIUM CALCULATION SHEET I) 1 2 3 4 5 Premium Calculation for Basic Benefit Basic Plan : ndowment nticipated Endowment nit Linked E A U Half-Yearly Yearly
Mode of Payment : Quarterly Term =_______
Age =_______ Sum Assured = ________________ Modal Factor Cut-off Sum Assured = ______________ (Refer from the table) Quarterly 0.2 6 Is Sum Assured < Cut-off Sum Assured ? Yes No Half-Yearly 0.5 1 Note: If ' No ' go to step 7 Yearly 1 Premium Rate 1= ______ (Refer the table) Annual Premium = ___________ (SA/1000)* Premium Rate 1
6 7 8
Premium Rate 2= ______ Annual Premium = ___________ (Refer the table) 15000 + [(SA Cut-off SA)/1000 * Premium Rate2] Modal Premium = ____________ Annual premium*Modal Factor ------ (A) (Round to the nearest
A. Rounded Basic Modal Premium = ___________ rupee)
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II )
Premium Calculation for Riders Premium Rates Term Rider SA (PR) (Years) (RSA) (Refer Table) 0.8 0.4 Total = (B) Annual (Rider) Modal (Rider) Premium Premium Rounded AP=(PR*RSA)/1 MP =AP * Round MP to 000 Modal Factor nearest rupee
Rider (Name) Term Cover ADB PDB
III)
Modal Policy Fee = ___________
------ (C) (A+B+C)
Total Premium = _____________
Modal Policy Fee Quarterly Rs. 20 Half-Yearly Rs. 15 Yearly Rs. 0
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Thorough documentation
1.1 Proposal Form The Life advisor must ensure that the proposal form is duly and completely filled in by the client. Signatures at the relevant places in the form should be taken too. 1.2 Proof of Age Proof of age MUST be submitted with all proposal forms. 1.3 Change of Name The LA must ensure that the relevant proof for change of name is attached along with the application form. a) Change in surname for females after marriage: b) Change in name & surname for females after marriage. c) Change in name or surname for any other purpose. 1.4 Financial Documents The LA must ensure that all the relevant proof of the financial standing of the client is attached to the proposal form 1.5 Premium calculation sheet This manual quotation must be done on the prescribed form called the calculation slip, which must accompany each and every proposal form. This calculation slip completed must give full details of the product, premium and sum insured. It must be attached to page 4 of the proposal form. These details must agree with the data in section 11 on page 4 of the proposal form and the calculation slip must be signed by the Life Advisor. 1.6 Amount at Risk The amount at risk must be correctly stated in the form. 1.7 Medical Documents: (The medical process manual may be referred for further information) a) Where any medical examinations and/or pathological tests are necessary in terms of sum insured, the Life Advisor will arrange to have these done at one of our panel doctors and /or pathology laboratories. b) The doctors would courier the medical report to the Operations Executive at the branch directly c) The Life Advisor is not allowed under any circumstances to collect any medical examinations or pathological tests from the doctors/pathologists.
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1.8 Declarations and Signatures Ensure that the Client reads and understands the declaration on page 7. The necessary signatures must also be completed. The LA should go through the entire proposal form with the Client to ensure that every question has been answered. All cancellations and alterations on the proposal form must be signed and dated by the Life Insured /Proposer.
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Maintenance of records
Life Advisors Diary 1. The Life advisor has to maintain a dairy where all the details of activities planned and implemented during the day, week and month are jotted down. 2. The information should enable the Sales Manager of the Life Advisor to know whom the Life Advisor is tracking and the progress made. 3. Once the Point of Sales system is in place, all the details covered in the Diary should also be entered/ uploaded into the Life-Tree-System, to enable the Sales Manager have an online tracking of the work being done 4. The Life tree system should be also be used for scheduling tasks, appointments, meetings 5. The Life Advisor should religiously fill (and document) all the following details: a. The Suspect register - with some basic details about them and the referrals b. Daily report on details of Prospects (Name, lead source, age, tel no., Income, dependents, etc.) c. Number of telephone calls to the prospect d. Number of visits/ face to face meeting e. Hot cases, warm cases f. No. of Need Analysis g. No. of Portfolio Analysis h. No. of Presentations i. Call stage j. Cases stage k. Commitment v/s Achievement l. Policies lost m. Other important notes/ findings n. After closing the sale, details such as SA, Premium amount, Policies in Annual mode, other mode, policy type, riders offered etc. o. Number of Portfolio review p. Number of referred lead 6. Even after the closing the sale, The Life advisor should maintain all the details of the clients in the diary and be in touch with him regularly. Once the POS system is in place, the advisor could use Life tree as a one-stop shop to store all information. Once he enters the details of his appointment, meetings, client details etc, the system can generate report on most of the above
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Client Information: 1. The Life advisor must maintain more and more information about the client from the suspect stage to the prospect stage to the conversion stage. 2. Information should broadly cover: a. Full name of the prospect, Age, date of birth, Address b. Mailing address, office address, permanent address of the client c. Details of spouse, his financials, health, other policies d. Hobbies, avocation of the client e. Number of members, no. of dependents, their age group f. Occupation, Annual income g. Medical history, family history of ailments h. Whether he has another life policy and feature of the same i. Habits Smoking, Drinking, Chewing tobacco etc. j. Any other specific requirement of the prospect/ client k. Financial details assets and liabilities etc. 3. The Life advisor should also maintain other details like Date of birth, Anniversary date etc. so that he could be in touch with the client (if converted), or make him his future clients (or get leads from him) 4. Product preference, Riders, premium amount etc. All these information to be given to the Sales Manager on a regular basis (to be updated on the Life tree on a day to day basis) Information to the Sales Manager 1. The Life advisor should speak to the Sales Manger daily to give him an update of the days proceedings 2. The LA should meet the Sales Manager on a weekly basis a. To give an update of the progress made with the prospects b. The stage of the sales and problems encountered, if any c. To set fresh targets for the week/ fortnight/ month d. To get new leads from the SM e. To give an update of his performance v/s targets set f. Discuss systems as required by Sales Manager to help schedule calls and meetings and record all relevant matters relating to policyholders, including personal details, policy details etc.
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3. The Sales Manager would review performance against the targets set by the Life Advisor. Fresh realistic targets to be discussed with the Sales Manager and set accordingly for the week/ fortnight/ month.
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4. Where the Life Advisor is not sure about the requirement of the client, or when he is unable to convert the sale, he should approach the Sales Manager to help him close the sale. 5. Where the Life Advisor is not confident about his presentation skills or selling skills, he should take the help of the Sales Manager 6. Where the Life Advisor feels that he does not know enough about the product or about the calculation, he should attend the top on trainings conducted by KMOM. Also, he must seek information from the Sales Manager to help him with information about the product/ rider etc. Sales Monitoring Sales Managers will decide the annual targets of the Life Advisors. These annual targets will be further broken down into monthly and weekly targets. Life Advisors should maintain a diary detailing various activities regarding to life insurance selling. These diaries will be monitored by Sales Manager & Sales Officers on weekly basis. Once the POS system is in place, targets and leads could be assigned online Sales Managers will be submitting a monthly report on the performance of each Life Advisor in a prescribed format to the Regional Office The Regional Office will in turn send a monthly report to the Chief Marketing Officer. Life Advisors will also be required to maintain a potential referrals register, which will update on daily basis.
The broad target set for Life Advisors are 1) Ratio of converting suspect to prospect.....1 out of 3 (Through BARMAID /SANI data gathering) 2) Ratio of call to Interviews..1 out of 3 3) Ratio of Interviews to Close...1 out of 3
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Life Advisors role

Functions of a Life Advisor 8.1.1 General 1. Life Advisor is the first & most important person in close association with the insuring person while procuring & servicing of life insurance business 2. The Insurance Act, 1938 under its Section 2 (10) defines Insurance Life Advisor as: Insurance Life Advisor means an insurance agent licensed under section 42 of above Act who receives or agrees to receive payment by way of commission or other remuneration in consideration of his soliciting or procuring insurance business including business relating to continuance, renewal or revival of policies of insurance. 3. Any Insurance Life Advisor has to perform two basic tasks namely procure new life assurance business & conserve the business already secured. 8.1.2 The key functions of a Life Advisor are the following: 1. Contact prospects for Life Insurance study their insurance needs and persuade them to buy 2. Complete all formalities for proposal of new insurance, including filling up of proposal forms, collecting premium, arranging medical examination, collecting proofs (of age or income), reports and information required by the underwriter. 3. Keep in touch with the policyholder to make sure that renewal premiums are paid on time 4. Ensure that nominations are made or changed, if necessary, as and when there are changes in the family. 5. Assist in collecting the claim amounts as and when they become due by helping the claimants to complete all documents and evidences. 6. To be of assistance to the policyholder in case he needs a loan under the policy or wants to make an assignment.
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Duties and responsibilities while procuring new business 1. A Life Advisor of life insurance is not authorized to conclude the contract with the buyer of insurance. His job is to simply forward the duly completed proposal form along with other documents to the insurance company who alone is competent authority to have binding contract with the life assured. 2. The Life Advisor must make reasonable inquiries in regard to the lives to be insured before recommending proposals for acceptance, and bring to the notice of the company any circumstances, which may adversely affect the risk to be underwritten. 3. The Life Advisor must take into consideration the premium paying capacity and the needs of the client. 4. The Life Advisor must ensure that the correct age of the life assured is admitted at the start of the policy. 5. The Life Advisor should not interfere with any proposal introduced by any other Life Advisor. Duties and responsibilities while conserving business 1. The Life Advisor shall maintain contact with all policyholders of the Insurance Company through him. 2. The Life Advisor shall advise every policyholder in important matters such as effecting nomination or assignment, change of address or any other assistance in this behalf. 3. The Life Advisor shall ensure the timely remittance of premium within the permissible grace period 4. The Life Advisor shall always try to prevent lapse or surrender of the policies. 5. The Life Advisor shall always render necessary assistance to the claimants in filling claim forms.
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Life Advisors Kit Every Life Advisor must ensure that he has an Life Advisors kit which should contain the following: 1.8.1 Life Advisors manual This will contain all information, which the Life Advisor needs to know about insurance, the company, its products and his role. 1.8.2 Life Advisors diary To be used by the Life Advisor to keep his records, data, appointments, references etc. 1.8.3 Calculator To be used by the Life Advisor to calculate the premium, etc. 1.8.4 Paper Pad To be used by the Life Advisor for calculating premiums, etc.. 1.8.5 Business visiting cards The card will highlight the company logo and office address and telephone numbers of our Policy Services department and there will be blank spaces for Life Advisors name and address where they will screen print their names. 1.8.6 Ball pen (Colour Blue &Black) To be used by the Life Advisor for filling up all company forms 1.8.7 Portfolio bag To be used by the Life Advisor for carrying all the things necessary for selling the policy. 1.8.8 Plastic leaf file The file will carry all the brochures about the product and the company 1.8.9 Measuring tape To be used by the Life Advisor for measuring the height of the prospect. 1.8.10 elephone directory To be used by the Life Advisor for recording the data of all their customers
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Code of Ethics Selling life insurance is like selling intangible product. So, the Life Advisor needs to observe a set of norms in his professional conduct, which make him worthy of trust & faith. The Code of Ethics for the life insurance Life Advisor constitute the following: 1. To perform his duties in high esteem. 2. To give utmost priority to the clients interest. 3. Not to disclose clients confidential & personal information, which is passed on to him. 4. To ensure prompt & sincere service to the client & his or her family. 5. To use appropriate methods in convincing clients to protect their insurable interests. 6. To make truthful & accurate presentations. 7. To improve his knowledge of life insurance through constant study. 8. To set a plan & work accordingly. 9. To maintain fair relations with colleagues. 10. To strictly follow the concerned laws & regulations. 11. To obtain proposals only on the lives of persons who fit in the physical, moral & financial standard defined by the Company. 12. To be loyal to the Company. Termination of the agency An agency is terminated in the event of : 1. Cancellation or non- renewal of the license 2. The Life Advisor acquiring any of the legal disqualifications like permanent incapacity conviction for criminal misappropriation, criminal breach of trust, cheating or forgery or if found to be unsound of mind etc. The insurer for can terminate an agency: 1. Non-performance of minimum business expectations 2. Any violation of the code of conduct.
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Restrictions on Life Advisors Any Life Advisor found violating the restrictions listed below are liable to be terminated from the services of the company. 1.8.11 Prohibition of Rebates All Life Advisors have to strictly comply with Section 41 of the Insurance Act 1938 as regards prohibition of rebates to clients. The following are the extracts from Section 41 of the Insurance Act 1938 No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebates as may be allowed in accordance with the published prospectuses of the insurer 1.8.12 Restrictions on Advertisements An Life Advisor is strictly prohibited from issuing an insurance advertisement which publicizes Kotak Mahindra Old Mutual Life Insurance Company Ltd. or its products unless , there is an authorization in writing from the Chief Marketing Officer of Kotak Mahindra Old Mutual Life Insurance Company Ltd. An "insurance advertisement" means and includes any communication directly or indirectly related to a policy and intended to result in the eventual sale or solicitation of a policy from the members of the public, and shall include all forms of printed and published materials or any material using the print and or electronic medium for public communication such as: newspapers, magazines and sales talks; billboards, hoardings, panels; radio, television, website, e-mail, portals; representations by intermediaries; leaflets; descriptive literature/ circulars; sales aids flyers; illustrations form letters; telephone solicitations; business cards; videos; faxes; or any other communication with a prospect or a policyholder that urges him to purchase, renew, increase, retain, or modify a policy of insurance. Authorized By Chief Marketing Officer: ___________________ Page 65 of 82
1.8.13 Payment of premiums Life Advisors are strictly prohibited from advancing premiums on behalf of proposers or policyholders 1.8.14 Life Advisors as nominees or assignees Life Advisors are strictly prohibited from becoming assignees or nominees under policies on the lives of persons other than their near relatives such as wife and children or allowing such near relatives to become assignees or nominees under policies on the lives of persons, other than their near relatives. 1.8.15 Collection of monies from proposers of policyholders A Life Advisor is prohibited from collecting any moneys from policyholders. They may, however, collect deposits towards the first premium and remit the same to the company immediately, but in doing the same they should note that they act as Life Advisors of the proposer and not as Life Advisors of the company.
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IRDA Norms - Code of Conduct The IRDA has formulated a Code of Conduct for Life Advisors, which comprises two broad group heads viz., Dos and Donts. They are listed here below: 8.8.1 Dos 1. Identification of Life Advisors and the insurance agency- certificate of License to be shown to the prospect on demand. 2. Disclosure of the commission being offered to the Life Advisor by the insurance company to the prospect, if asked for. 3. Match the needs of his client with various products available with his insurer. 4. Work out the premium to be charged so that his prospect is able to weigh the economic or financial implication of the proposal on his resources. 5. Bring to the notice of his client the implication of various questions in the proposal form and other documents and advise the client to disclose all the information. 6. Disclose to the insurer all relevant information, regarding proponents, that is in his knowledge. 7. Inform the prospect about acceptance or rejection of the proposal by the insurer. 8. Obtain all documents from the prospect for the completion of the case. 9. Assist the policyholder in matters of: (a) Claim settlement, (b) Effecting nomination/assignment, (c) Revival, change of address, (d) Exercise of various options.
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8.8.2 Donts .. No Life Advisor shall 1. Solicit or procure insurance business without holding a certificate of valid license. 2. Induce the prospect to omit to disclose the material information in the proposal form. 3. Induce the prospect to submit wrong information in the proposal form or in the documents submitted to the insurer for acceptance of the proposal, 4. Behave in discourteous manner with the prospect. 5. Interfere with any proposal introduced by any insurance Life Advisor. 6. Offer different terms and conditions than offered by the insurer. 7. Part with or share his agency commission with any prospect or with any other person. 8. Receive a share of the policy proceeds from the beneficiary. 9. Compel any person to terminate an insurance contract with any insurer in order to effect a new proposal within three years from date of such termination. 10. Apply for fresh license to act as an insurance Life Advisor if his earlier one has been terminated with in five years from the date of termination. 11. Remain or become a director of an insurer carrying on insurance business in India.
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Proposal Deposits and Renewal Receipts Basic checks when collecting Receipts from the customer 1. Only cash, local cheques and local demand drafts are accepted BY KMOM. In other words no cheque or demand draft should be accepted where the company will bear any charge or expense to get it credited to the companys bank account. 2. Only instruments, which are MICR, are accepted by KMOM. 3. Post-dated cheques are not accepted by KMOM. In other words no cheque should be accepted where the cheque is dated beyond the current date. The cashier is not supposed to maintain custody of such instruments. 4. The life Advisor should ensure that the instrument received is not stale. In other words it is not dated 6 months prior to the current date in case of a cheque and not beyond 3 months in case of a demand draft. 5. The Life Advisor should ensure that amount in words and figures agree on the instruments. 6. The Life Advisor should ensure that all instruments are signed and dated,. 7. The Life Advisor should ensure that any overwriting on the instrument is signed in full by the person signing the cheque 8. All proposal cheques should be drawn in favour of KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED 9. All instruments should bear the name and the proposal number \ policy number on the reverse of the instrument. Role of the Life Advisor in Policy Servicing Once a proposal form has been accepted as Clear, then it shall be converted into a policy and a contract is then issued to the Customer. There are different types of activities and corresponding servicing requirements that may come up during the life of a policy and the Life Advisor should be clear about the activities involved in each of them and explain the same to the client. A general list of all possible alterations and their corresponding requirements is made available separately in greater detail in Life Advisors manual. Changes in Address / Contact Details Change in Name Alteration in the Date of Birth
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Alterations in the Terms of the Policy Revival of a Lapsed Policy Issue of a Duplicate policy in lieu of a Lost Policy Nomination Assignment Renewal Notices Lapse Notices Loans
It is the duty of a Life Advisor to ensure that customer are informed of the various requirements for each type of query. You should also ensure that all the requirements are complete and correct. Only then, should you send them to the Branch
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Organisation Values Kotak Mahindra Old Mutual Life Insurance strives for some key values, which should be followed by the LA: INTEGRITY EFFECTIVE COMMUNICATION NO REBATE ENTREPRENEURSHIP CREATIVITY AND RISK-TAKING AGGRESSIVENESS PARTICIPATION ACCOUNTABILITY SENSE OF URGENCY ADAPTIBILITY DISCIPLINED TEAM WORK DECORUM AND ETIQUETTE
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Exercises in Tax Calculation (client & Life Advisor)

10.1 Objective The Life advisor must have a fair understanding of tax benefits that arise out of life insurance investments. To give an overview, the module will also be looking into actual tax calculations and other tax benefits. 10.2 Relevant sections under the Income Tax Act, 1961
Under Income Tax Act, 1961
An individual or HUF can claim a tax rebate on the insurance premium paid for self, spouse and children (including dependent children). Sec 88 - Certain investments (PPF, NSCs, life insurance premium etc) are entitled to a tax rebate of 20% of the investment amount subject to a rebate ceiling of Rs 12,000/(Further rebate of Rs 4,000/- permissible only for Infrastructure Bonds/Power sector investments) However, in case of special categories viz. author, playwright, artist, musician, actor or sportsman (incl. an athlete) rebate is permitted @25% instead of 20%.
Sec 80 CCC - A deduction of Rs 10,000/- from taxable income is allowed for annuities with/without life cover. Sec 10(10D) - All incomes from a life insurance policy are exempt from tax. Sec 80 D - Deduction from income allowed to the extent of Rs 10,000/- towards payment of health insurance premium
Sec 80 L - Deduction from total income allowed to the extent of Rs 9,000/- towards interest earned on bank deposits and specified debt instruments Money received under a Life Insurance Policy As per section 10(10D) of the Income Tax Act, 1961, any sum received under a life insurance policy including bonus declared or paid do not form part of taxable Income. To put it simply, it is exempt from tax. However, monies received under keyman insurance policy are not covered under section 10(10D). Under Wealth Tax Act
Authorised By Chief Marketing Officer: ___________________
Page 72 of 82
Insurance premium paid as well as surrender value of Insurance policy do not form part of chargeable wealth. For the same no wealth tax is attracted when the policy is in force. On maturity of policy the amount received, if it remains in cash on March 31 of the succeeding year, will form part of chargeable wealth. Under Gift Tax Act Gift Tax Act has been abolished and is no longer applicable. Accordingly, gifts are not normally taxable. However, there are clubbing provisions in Income Tax Act (Sec 64), which make gifts taxable in certain circumstances. 10.3 Important Terminology Investments - Funds put in avenues with the objective of getting regular income/capital appreciation. Investments may also be made with the objective of financial security and/or tax planning Income - Includes profits, gains, dividend, capital gains, salary, perquisites, income from house property etc. Assessee - A person whose income is being assessed Financial Year - The period commencing from 1st April and ending on the following 31st March Assessment Year - The year in which income is assessed for the previous financial year. 10.4 Tax Structure (for Individuals) Tax Slab 0 - 50,000 50,001-60,000 60,001-1,50,000 1,50,000 & above (Surcharges on tax as applicable) 10.5 Difference between tax rebate and deduction from taxable income Rebate is the reduction in tax payable owing to certain investments made during a particular financial year. Normally, rebates are calculated at a fixed percentage (20%) of Authorised By Chief Marketing Officer: ___________________ Page 73 of 82 Rates of Income Tax Nil 10% for the slab 20% -- -30% --
the investment amount and the figure so arrived at becomes the qualifying amount. Rebates are given to encourage saving/security related investments. Deductions from taxable income are those where a part or the entire amount allowable is reduced from the taxable income earned in a financial year. As the taxable income reduces, the total tax payable also comes down. An individual in the highest tax bracket (30%) saves more tax from a deduction from taxable income as compared to a 20% tax rebate, while one in the lower tax bracket will save more from a tax rebate. 10.6 Process for computing taxable income Total income (earned plus estimated) for a financial year to be arrived at. Incomes exempt from tax (HRA, conveyance, childrens education allowance) is deducted from the total income Taxable value of perquisites like car, furnishings, servants etc to be added to total income. Standard Deduction and Professional tax paid to be deducted from above income to arrive at the Gross Total Income Permissible deductions under chapter VI-A to be reduced Tax to be calculated on the income arrived at. Rebates under sec 88 to be deducted from the tax Surcharges, if any, to be added to the tax 10.7 Examples for tax calculations (Client) I) Mr X earns Rs 4,25,000 by way of salary and perquisites. His income from dividend is Rs 10,000. He pays a professional tax of Rs 2,400. PF investments made are to the tune of Rs 18,000. Life insurance premium paid is Rs 15,000. Calculate Mr Xs tax liability. II) Mr A runs a stationery shop and his net profit from the business is Rs 4,35,000. Mr A is a shrewd tax planner and has made the following investments : a) Rs 32,000 in PPF ; b) Rs 21,000 in life insurance premium ; c) Rs 10,000 in NSCs ; d) Rs 10,200 u/s 80 CCC ; e) Rs 10,800 u/s 80 D. Calculate the tax Mr A has to pay. (Life Advisor)
Page 74 of 82
III) Mr Singh is a new Life Advisor of a life insurance company. He has been selling a reasonable number of policies and has earned Rs 1,78,000 by way of commissions during the year. (TDS @ 10% deducted) He has incurred the following expenses : a) conveyance and travelling : Rs 22,100 b) telephone expenses : Rs 10,600 c) stationery : Rs 2,700 d) entertainment : Rs 4,800 . He has made the following investments : a) Life Insurance premium : Rs 15,000 b) PPF : Rs 20,000. Calculate his tax liability.
Page 75 of 82
Solutions I) Income from salary (-) Standard Deduction u/s 16 (i) (-) Profession Tax u/s 16 (iii) Dividend (-) exempt u/s 10(33) Gross Total Income (-) Deductions u/c VI - A Total Income Tax on Total Income 0-50,000 50,001-60,000 60,001-1,50,000 1,50,000-4,02,600 Total Rebates u/s 88 PF Life Insurance Total (-) Rebate @ 20% (+) Surcharge @ 2% Tax Payable Authorised By Chief Marketing Officer: ___________________ Rs Rs Rs Rs 0 1,000 18,000 75,780 ----------------Rs 94,780 ----------------Rs 18,000 Rs 15,000 -----------------Rs 33,000 -----------------Rs 6,600 -----------------Rs 88,180 Rs 1,764 -----------------Rs 89,944 10,000 10,000 4,25,000 20,000 2,400 22,400 -------------4,02,600 ------------Nil 4,02,600
Page 76 of 82
KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED II)
Net Profit as per P/L A/c (-) Standard Deduction u/s 16 (i) (-) Profession Tax u/s 16 (iii) Gross Total Income (-) Deductions u/c VI - A u/s 80 CCC u/s 80 D Rs Rs 10,000 10,000
4,35,000 Nil Nil ------------4,35,000 -------------
-------------20,000 -------------Total Income Tax on Total Income 0-50,000 50,001-60,000 60,001-1,50,000 1,50,000-4,15,000 Total Rebates u/s 88 PPF Life Insurance NSCs Total (-) Rebate @ 20% (subject to max Rs 12,000) (+) Surcharge @ 2% Tax Payable Authorised By Chief Marketing Officer: ___________________ Rs Rs Rs Rs 0 1,000 18,000 79,500 ----------------Rs 98,500 ----------------Rs 32,000 Rs 21,000 Rs 10,000 ----------------Rs 63,000 ----------------Rs 12,600 Rs 12,000 -----------------Rs 86,500 Rs 1,730 -----------------Rs 88,230 4,15,000
Page 77 of 82
KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED III)
Surplus as per I/E A/c (-) Standard Deduction u/s 16 (i) (-) Profession Tax u/s 16 (iii) Gross Total Income (-) Deductions u/c VI - A u/s 80 CCC u/s 80 D Rs Rs -
1,37,800 * Nil Nil ------------1,37,800 -------------
Total Income Tax on Total Income 0-50,000 50,001-60,000 60,001-1,37,800 Total Rebates u/s 88 PPF Life Insurance NSCs Total (-) Rebate @ 20% (+) Surcharge @ 2% Tax Payable (-) TDS deduction Tax payable / (refund due) Rs 20,000 Rs 15,000 Rs ----------------Rs 35,000 ----------------Rs Rs Rs 0 1,000 15,560
-------------1,37,800 -------------1,37,800
----------------Rs 16,560 -----------------
Rs
7,000 ----------------Rs 9,560 Rs 191 ----------------Rs 9,751 (Rs (Rs 17,800) 8,049)
Page 78 of 82
* From the gross receipts of Rs 1,78,000 the total of all business related expenses of Rs 40,200 is deducted to arrive at Rs 1,37,800/-
Formats of reports maintained by Life Advisors Reports to be Details to include maintained by the LA Suspect register Name of the suspect, age, no. of dependents, occupation, Income, Tel no., Address, Source, remarks etc. Daily report (would be Prospect names, lead source and remarks
monitored by the SM during weekly meetings)
Weekly report
Everything listed in Life Advisors diary Week at a glance
Page 79 of 82
Ref : CMO\Individual\Sales\LA Sales\ 003 Date of Issue: January 29, 2002
Annexure 1
SUSPECT REGISTER
Sr. No.
Date
Name
Age
No. of Depend.
Occupation
Income
Tel
Address
Source
Remark
Page 80 of 82
Annexure - 2
Life Advisors' Diary (Week at a glance) ACHIEVEMENTS Sr. No. 1 2 3 4 Topics Nos. of suspect/ Referrals Nos. of Qualified Prospects Nos. of Appointment Interviews:Nos. of Need Analysis Nos. of Portfolio Analysis Nos. of Presentation 5 Sales Closed (Nos.):Policies in Annual Mode Other Modes 6 7 8 Total Prem. Amount collection Nos. of Portfolio Review No. of Referred Leads Weekly Goal MON TUES WED THU FRI SAT SUN Weekly Summary Remarks
Page 81 of 82
Annexure - 3
DAILY REPORT Date : _______________ SR. NO. 1 2 3 4 5 6 7 8 9 10 11 12 TIME PROSPECT NAME LEAD SOURCE REMARKS
Page 82 of 82

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KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED Activity Reference No Effective From Last Revision on Authorisation Amendments

and deviations to Policy Objective & Scope

KMOM LIFE INSURANCE CO LTD

Life Advisors Sales Process

Ref : CMO\Individual\Sale 003 Date of Issue: January 29

This policy covers

This policy does not cover

Authorized By Chief Marketing Officer: ___________________

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED

KMOM LIFE INSURANCE CO LTD

Life Advisors Sales Process

Ref : CMO\Individual\Sale 003 Date of Issue: January 29

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED

KMOM LIFE INSURANCE CO LTD

Life Advisors Sales Process

Ref : CMO\Individual\Sale 003 Date of Issue: January 29

Authorized By Chief Marketing Officer: ___________________

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED

KMOM LIFE INSURANCE CO LTD

Life Advisors Sales Process

Ref : CMO\Individual\Sale 003 Date of Issue: January 29

Position purpose of a Life Advisor

Authorized By Chief Marketing Officer: ___________________

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED

KMOM LIFE INSURANCE CO LTD

Life Advisors Sales Process

Ref : CMO\Individual\Sale 003 Date of Issue: January 29

Training of Life Advisors

Authorized By Chief Marketing Officer: ___________________

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED

KMOM LIFE INSURANCE CO LTD

Life Advisors Sales Process

Ref : CMO\Individual\Sale 003 Date of Issue: January 29

Business Cycle to be followed by LA for getting business

MAKE THE APPOINTMENT

CLOSING THE SALE

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED

KMOM LIFE INSURANCE CO LTD

Life Advisors Sales Process

Ref : CMO\Individual\Sale 003 Date of Issue: January 29

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED

KMOM LIFE INSURANCE CO LTD

Life Advisors Sales Process

Ref : CMO\Individual\Sale 003 Date of Issue: January 29

Authorized By Chief Marketing Officer: ___________________

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED

KMOM LIFE INSURANCE CO LTD

Life Advisors Sales Process

Ref : CMO\Individual\Sale 003 Date of Issue: January 29

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED

KMOM LIFE INSURANCE CO LTD

Life Advisors Sales Process

Ref : CMO\Individual\Sale 003 Date of Issue: January 29

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED N: I:

KMOM LIFE INSURANCE CO LTD

Life Advisors Sales Process

Ref : CMO\Individual\Sale 003 Date of Issue: January 29

Authorized By Chief Marketing Officer: ___________________

KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED

KMOM LIFE INSURANCE CO LTD

Life Advisors Sales Process

Ref : CMO\Individual\Sale 003 Date of Issue: January 29