The cultural diversity of India contributes to differing client objections. A change in the demographic comes with a change in mindset. Variances in age and the cultural impact that the prospective client may have had directly affected their decision when assessing insurance plans. Aman Gupta, a one-year MDRT member from India, shares his rules on what to expect and how to handle different types of client objections.

Common client objections

Gupta believes that a lock-in period is one of the most common client objections he faces. Most clients are not comfortable with parting from their funds for a specific period, even though they might be ready to invest in mutual funds for the same period. For example, Gupta notes that clients are not in favor of restricting their funds in this sector by committing to a 10-year lock-in period in plans such as ULIP (Unit-linked insurance plan). “They are further deterred by ULIP charges, the factor of taxability in ULIP, and other such plans,” he says.

Gupta also believes that servicing senior citizens comes with its set of challenges, since they might not be comfortable purchasing plans for life insurance. Analyzing this hurdle, he further states that prospective clients in this age group may have children who are now settled abroad. Since it is difficult to provide insurance cover for their children, clients may have apprehensions about going for the plan. “Clients have a conservative approach to term insurance. They sometimes perceive the commission fee to be extraneous and do not prefer this fee to be part of the premium for the plan,” he adds.

Rules for tackling objections

Gupta finds proper communication to be key in tackling client objections. He observes that an articulate explanation of the product being pitched to the client is helpful. For example, a common preliminary objection that a prospective client may raise is that the product is an insurance product. Gupta understands that the benefits of the plan need to be explained to the client in clear terms. “I find it useful to explain the benefits of life cover, and more importantly, the benefits of availing cover for Covid-19 from the first day of the plan itself. It also helps if an added incentive for the plan can be offered to the prospective client that the cover for Covid-19 can be availed multiple times,”, he adds. He further states that tax-free maturity is also something that arouses the interest of prospective clients.

He believes in providing a comparative analysis of plans to assist the client in making the right choice, after collating data from different sites. It establishes the difference between term deposits and traditional plans. In the case of ULIP plans, a comparative difference can be established between mutual funds and ULIP plans.

If there are apprehensions about the lock-in period, Gupta chooses to advise the client on the option for a Systematic Withdrawal Plan (SWP). This establishes trust with the client who has been provided with a solution from available plans, allowing him a 5-year flexibility to withdraw through investment. He also finds it helpful to inform the client about other flexible options such as switching between debt to equity and vice versa.

Thinking out of the box for tailored solutions

After working for a few ultra-high-net-worth Individuals (UHNI) closely over the last financial year, Gupta has understood through experience that work done on priority is their primary lookout when interacting with a financial advisor in this sector. He mentions an example where he pitched an INR 15 lakh premium ULIP plan, where the client believed that a competitor’s offering was better. Gupta noted that the competitor’s offering allowed for switching between plans on a 10-day window. He could thereafter suggest an active switching of plans, not bound by that timeline. This resulted in making Gupta’s offer the winning bid for a premium of INR 8 lakh. He believes that since the client was apprehensive about investing in a plan because of a falling market, he calmly explained the benefits to the client where he provided options for converting multiple funds to get him the best return.

“Seeing an 11% return, the client personally called me, interested in purchasing another plan, paying a premium of INR 5 lakhs over the next month itself. Active services are necessary in financial advising,”, he maintains. Efficient client servicing has helped him secure a premium of INR 25 lakh in December last year.

Understanding the needs of the demographic are essential to address issues whether it caters to the needs of senior citizens or dynamic services required for UHNI clients. Gupta clearly understands the difference in approaches that he needs to take to optimise his financial advisory skills. He concludes by sharing, “In my experience as a financial advisor in the sector of life insurance, I have learned that client objections can vary with culture and geography. Client objections are a part of the process and can be overcome through product knowledge, and a comparative analysis explaining the benefits of the plans offered. Also, clients with a high net worth tend to be more demanding and require quick service; these concerns can be addressed through efficient and prompt servicing.”

Contact: MDRTeditorial@teamlewis.com  

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Reversing the reluctance

Simple rules to overcome different client objections