Kathmandu. Not only the insured but also the insurer has to take an unpleasant decision to close the policy before the expiry of the life insurance policy. Both the insured and the insured suffer a loss if the insured has to pay the insured from the amount of the insurance fund before the maturity of the term of the policy.
Neither the insured nor the insurer expects to close the life insurance policy before the expiry of the period. When the insurer pays the amount ahead of time due to the commission, regulatory fees, management expenses, etc., given by the insurer to the agent for the sale of the policy, the insurer should pay such expenses only after deducting such expenses. In such a situation, if the amount deducted by the insured is more than the bonus amount, then only a small amount will be received by the insured.
Strategies should be adopted to meet the needs of the insured, build trust, ensure transparency and maintain regular communication to minimize the number of surrenders before the maturity date. Here are some suggestions on how insurers and agents can make efforts to reduce policy surrender:
Understanding and addressing customer needs
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Emphasis on insurance education: The benefits, terms, and long-term value of the insurance policy should be provided in a simple and clear manner.
Personal insurance policy: should be designed according to the stage of the customer’s life and financial goals and encouraged to buy insurance policies accordingly.
Be proactive in problem solving: Insured’s complaint should be addressed promptly and effectively.
Regular communication with the customer
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Regular Information: It is advisable to use e-mail or SMS to send up-to-date information and reminders of the benefits of the policy.
Periodic Review: should offer a review to optimize the insurance policy based on the client’s life circumstances.
Customer Service Improvement: should provide an easy service system to address customer inquiries promptly.
Building trust and transparency
Clarity: Insurance documents should be made simple and easy to understand.
Claims Process Improvement: Insurance claims should be processed easily and transparently.
Do not sell forcefully: should be advised to choose insurance policy only after understanding the real needs of the customer.
Flexibility provided
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Flexibility in Premium Payment: TAG_CLOSE_span_73 Please be made aware of the various options or grace periods available for insurance premium payments.
{{TAG_OPEN_span_72}TAG_CLOSE_span_72} Facility to modify insurance policies based on a change of life (such as marriage, childbirth, or retirement). This facility is not available in the insurance market of Nepal.
Suspension Option: Facility to temporarily suspend insurance policies in case of short-term financial problems. Such a facility is also not available in Nepal.
Incentives for customer continuity of insurance
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Loyalty Rewards: Provide discounts, bonuses, or additional benefits to customers who maintain a long-term policy. In recent times, some life insurers have introduced the concept of loyalty bonus.
No-lapse benefit: provide additional perks or some other discounts on premium payments to insured who have not covered the policy.
Referral Program: Reward the insured who brings in new customers.
Use of technology{
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Digital TAG_CLOSE_span_65 Devices: Make it easy to pay premiums through mobile apps and online portals.
Data Analytics: analyze customer behavior to identify insurance closures or other types of risks.
Send Personal Notice: Notify us about the insurance premium payment date, policy term, or benefits.
Get direct feedback from the customer
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Get Feedback: Conduct a survey or interview to understand the reasons for discontinuing the insurance policy.
Exit Interview: Talk to the insured who surrenders the TAG_CLOSE_span_60 insured to identify ways to improve.
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Financial Planning Guidance: explain how insurance can be incorporated into a long-term financial strategy.
{{TAG_OPEN_span_57}Example Display: Demonstrate the benefits of an insurance policy through a successful case study and message.
Provide additional service and bundling
{{TAG_OPEN_span_56} Cross-selling opportunities: offer different types of insurance (such as health, life, and auto insurance) in a bundle.
Riders and Additional Services: provide additional risk coverage on the insurance policy as per the customer’s needs.
Focus on the training of agents{
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Empathy and ethics: Train the insured to prioritize their needs and well-being.
Measure Insurance Continuity: When evaluating the performance of an agent , make the continuity aspect of the insurance policy the main indicator.
These measures can help prevent premature surrender or closure of the policy by making the insured feel satisfied and trustworthy.
