EPF - Death & Incapapacitation Benefit

Losing a loved one is always painful and while nothing can ease that pain and suffering or replace that person, life still goes on whether one likes it or not, and for those left behind to live, money does become a factor.

That is where the Employees Provident Fund (EPF) comes in, not just for the savings the deceased left behind in the retirement fund but also for the goodwill payments made out by the fund for those left behind.

The goodwill payments also extend to those who are incapacitated and are no longer able to work and these payments are not paid out from the member’s savings. The EPF website states: “The Incapacitation and Death Benefits are a goodwill gesture by the EPF, payable to the member/guardian or beneficiary to help lessen the financial burden when the member suffers from incapacitation or in the event of death.

The money comes from EPF investment earnings and not from the member's savings.” It further states that the incapacitation benefit is paid to an EPF member who has lost his job owing to the incapacitation and has made an incapacitation withdrawal.

The incapacitation benefit amount is RM5,000 and will be paid out only once, subject to the member fulfilling the following conditions: he or she is a Malaysian citizen; has not attained the age of 55; has applied for incapacitation withdrawal within 12 months of the termination of service date; the last period of service must have been at least for a period of six continuous months; and the reason for his or her service being terminated must be due to incapability to work and not because of disciplinary action or voluntary resignation.

So if a person is incapacitated at the age of 40, will he be able to withdraw his savings and get this payment? An EPF spokesman told Theantdaily that if the person is no longer able to work, he would be able to withdraw his or her whole EPF savings and be paid an additional RM5,000 on top of that amount as a goodwill payment.

The EPF website states that death benefits are paid to the deceased member's dependant or next-of-kin when the application for a death withdrawal is made subject to consideration by the EPF. The death benefit amount is RM2,500 and will be paid out only once. So, what does “subject to consideration by the EPF” mean? It means fulfilling the conditions to qualify for the benefit.

The conditions to qualify are: one has to be a Malaysian citizen; member has not attained the age of 55 years at the time of death; and application for death withdrawal is made within six months of the date of demise of the member.

On the amount of incapacitation and death benefits paid out, the spokesman said he was unable to provide it offhand. Sometimes the EPF nominees and the next-of-kin would not be the same people but EPF would pay out the death benefits to the dependants or next-of-kin of the deceased member. “We have a process to determine this,” said the spokesman.

These amounts may not seem much, but for grieving families coming to terms with their losses or the loss of the ability to earn a living anymore, these goodwill gestures do go a long way to offer some semblance of comfort.

A Great Christmas Story

It’s just a small white envelope stuck among the branches of our Christmas tree. No name, no identification, no inscription. It has peeked through the branches of our tree for the past ten years or so.

It all began because my husband Mike hated Christmas--oh, not the true meaning of Christmas, but the commercial aspects of it -overspending...the frantic running around at the last minute to get a tie for Uncle Harry and the dusting powder for Grandma-the gifts given in desperation because you couldn’t think of anything else.

Knowing he felt this way, I decided one year to bypass the usual shirts, sweaters, ties and so forth. I reached for something special just for Mike. The inspiration came in an unusual way. Our son Kevin, who was 12 that year, was wrestling at the junior level at the school he attended; and shortly before Christmas, there was a non-league match against a team sponsored by an inner-city church. These youngsters, dressed in sneakers so ragged that shoestrings seemed to be the only thing holding them together, presented a sharp contrast to our boys in their spiffy blue and gold uniforms and sparkling new wrestling shoes.

As the match began, I was alarmed to see that the other team was wrestling without headgear, a kind of light helmet designed to protect a wrestler’s ears. It was a luxury the ragtag team obviously could not afford.

Well, we ended up walloping them. We took every weight class. And as each of their boys got up from the mat, he swaggered around in his tatters with false bravado, a kind of street pride that couldn’t acknowledge defeat. Mike, seated beside me, shook his head sadly, “I wish just one of them could have won,” he said.

“They have a lot of potential, but losing like this could take the heart right out of them.” Mike loved kids - all kids - and he knew them, having coached little league football, baseball and lacrosse. That’s when the idea for his present came. That afternoon, I went to a local sporting goods store and bought an assortment of wrestling headgear and shoes and sent them anonymously to the inner-city church.

On Christmas Eve, I placed the envelope on the tree, the note inside telling Mike what I had done and that this was his gift from me. His smile was the brightest thing about Christmas that year and in succeeding years.

For each Christmas, I followed the tradition--one year sending a group of mentally handicapped youngsters to a hockey game, another year a check to a pair of elderly brothers whose home had burned to the ground the week before Christmas, and on and on. The envelope became the highlight of our Christmas. It was always the last thing opened on Christmas morning and our children, ignoring their new toys, would stand with wide-eyed anticipation as their dad lifted the envelope from the tree to reveal its contents.

As the children grew, the toys gave way to more practical presents, but the envelope never lost its allure. The story doesn’t end there. You see, we lost Mike last year due to dreaded cancer. When Christmas rolled around, I was still so wrapped in grief that I barely got the tree up.

But Christmas Eve found me placing an envelope on the tree, and in the morning, it was joined by three more. Each of our children, unbeknownst to the others, had placed an envelope on the tree for their dad.

The tradition has grown and someday will expand even further with our grandchildren standing to take down the envelope. Mike’s spirit, like the Christmas spirit, will always be with us. This true story was originally published in the December 14, 1982 issue of Woman's Day magazine.

It was the first place winner out of thousands of entries in the magazine's "My Most Moving Holiday Tradition" contest in which readers were asked to share their favourite holiday tradition and the story behind it.

The story inspired a family from Atlanta, Georgia to start The White Envelope Project and Giving 101, a non-profit organisation dedicated to educating youth about the importance of giving. Theantdaily is happy to share this moving story with readers on this Yuletide season. - See more at: http://www.theantdaily.com/Main/For-the-man-who-hated-Christmas#sthash.FSaSlL3L.dpuf

Top Soft Skills

Communication and interpersonal skills came up tops across various sectors and functions in an evaluation study done by STJobs.

STJobs's evaluation consisted of employers who posted at least one job via the portal this year.
Although some of these skills are directly related to the job scopes and types of jobs posted, the top most in-demand attribute is one that unanimously straddles across varied positions, regardless of entry levels and/or industries.

No. 1 - Communication and Interpersonal Skills

No. of mentions in job postings: 24,328

Excellent communication and interpersonal communication skills are vital to workplace success. Being able to communicate concisely and with clarity - whether in writing or verbally - in a confident and effective manner is a key skill and requirement.

Good communication skills help to reduce barriers due to language and cultural differences, and avoid miscommunication as result.

Interpersonal skills enable people to successfully interact within the constantly changing and challenging landscape of the workplace, in which they are the key component of conflict management and resolution within the organisation.

No. 2 - Microsoft Office and Office Administration
No. of mentions in job postings: 11,531

Competency in administrative skills is a standard requirement in most businesses. Due to business processes, documentation and communication becoming increasingly complicated, it is important that job seekers have such skills in order to be able to do their work effectively. Microsoft Office remains as one of the world's most popular work programme to be used in offices globally.

No. 3 - Customer Service
No. of mentions in job postings: 5,572

Good customer service is essential in keeping loyal customers and developing referrals for future customers in a healthy business organisation. Good people skills increase the chances for a positive first impression and good customer service goes beyond the initial contact.

The most important customer service skill is the ability to deal with people, whether it is face-to-face, on the telephone or through written correspondence. Listening skills are also deemed as important for a good customer service experience.

Customers are the lifeblood of any organisation so many companies will go the distance to make sure they engage competent customer service staff that can maintain good relations with clients.

No. 4 - Sales
No. of mentions in job postings: 2,899

Aside from the fact that a business needs a good service or product to sell, employees with the ability to sell is one of the most important talents an organisation should have. A good sales person is aware of the wants, needs and expectations of the prospective customer and able to ask and questions plus build a sound relationship with him.

Companies are primarily concerned with bottom lines and P&L, so it's of no surprise that they are always in need of revenue generators at the frontline in order to thrive.

No. 5 - Accounting
No. of mentions in job postings: 1,136

Registered companies are required to produce financial statements by law. The balance sheet also reveals the economic performance of the business. A healthy financial statement may even attract parties to invest in a business. So it's no wonder that this skill is a highly sought after one in most firms.

Goals Versus Systems

What's the difference between goals and systems?

• If you're a coach, your goal is to win a championship. Your system is what your team does at practice each day.
• If you're a writer, your goal is to write a book. Your system is the writing schedule that you follow each week.
• If you're a runner, your goal is to run a marathon. Your system is your training schedule for the month.
• If you're an entrepreneur, your goal is to build a million dollar business. Your system is your sales and marketing process.

Now for the really interesting question: If you completely ignored your goals and focused only on your system, would you still get results?

For example, if you were a basketball coach and you ignored your goal to win a championship and focused only on what your team does at practice each day, would you still get results?
I think you would.

As an example, I just added up the total word count for the articles I've written this year. (You can see them all here.) In the last 12 months, I've written over 115,000 words. The typical book is about 50,000 to 60,000 words, so I have basically written two books this year.

All of this is such a surprise because I never set a goal for my writing. I didn't measure my progress in relation to some benchmark. I never set a word count goal for any particular article. I never said, "I want to write two books this year."

What I did focus on was writing one article every Monday and Thursday. And after sticking to that schedule for 11 months, the result was 115,000 words. I focused on my system and the process of doing the work. In the end, I enjoyed the same (or perhaps better) results.

1. Goals reduce your current happiness.
When you're working toward a goal, you are essentially saying, "I'm not good enough yet, but I will be when I reach my goal."

The problem with this mindset is that you're teaching yourself to always put happiness and success off until the next milestone is achieved. "Once I reach my goal, then I'll be happy. Once I achieve my goal, then I'll be successful."

SOLUTION: Commit to a process, not a goal.
Choosing a goal puts a huge burden on your shoulders. Can you imagine if I had made it my goal to write two books this year? Just writing that sentence stresses me out.

But we do this to ourselves all the time. We place unnecessary stress on ourselves to lose weight or to succeed in business or to write a best-selling novel. Instead, you can keep things simple and reduce stress by focusing on the daily process and sticking to your schedule, rather than worrying about the big, life-changing goals.

When you focus on the practice instead of the performance, you can enjoy the present moment and improve at the same time.

2: Goals are strangely at odds with long-term progress.
You might think your goal will keep you motivated over the long-term, but that's not always true.
Consider someone training for a half-marathon. Many people will work hard for months, but as soon as they finish the race, they stop training. Their goal was to finish the half-marathon and now that they have completed it, that goal is no longer there to motivate them. When all of your hard work is focused on a particular goal, what is left to push you forward after you achieve it?

This can create a type of "yo-yo effect" where people go back and forth from working on a goal to not working on one. This type of cycle makes it difficult to build upon your progress for the long-term.

SOLUTION: Release the need for immediate results.
I was training at the gym last week and I was doing my second-to-last set of clean and jerks. When I hit that rep, I felt a small twinge in my leg. It wasn't painful or an injury, just a sign of fatigue near the end of my workout. For a minute or two, I thought about doing my final set. Then, I reminded myself that I plan to do this for the rest of my life and decided to call it a day.

In a situation like the one above, a goal-based mentality will tell you to finish the workout and reach your goal. After all, if you set a goal and you don't reach it, then you feel like a failure.

But with a systems-based mentality, I had no trouble moving on. Systems-based thinking is never about hitting a particular number, it's about sticking to the process and not missing workouts.

Of course, I know that if I never miss a workout, then I will lift bigger weights in the long-run. And that's why systems are more valuable than goals. Goals are about the short-term result. Systems are about the long-term process. In the end, process always wins.

3. Goals suggest that you can control things that you have no control over.
You can't predict the future. (I know, shocking.)

But every time we set a goal, we try to do it. We try to plan out where we will be and when we will make it there. We try to predict how quickly we can make progress, even though we have no idea what circumstances or situations will arise along the way.

SOLUTION: Build feedback loops.
Each Friday, I spend 15 minutes filling out a small spreadsheet with the most critical metrics for my business. For example, in one column I calculate the conversion rate (the percentage of website visitors that join my free email newsletter each week). I rarely think about this number, but checking that column each week provides a feedback loop that tells me if I'm doing things right. When that number drops, I know that I need to send high quality traffic to my site.

Feedback loops are important for building good systems because they allow you to keep track of many different pieces without feeling the pressure to predict what is going to happen with everything. Forget about predicting the future and build a system that can signal when you need to make adjustments.

Fall In Love With Systems

None of this is to say that goals are useless. However, I've found that goals are good for planning your progress and systems are good for actually making progress.
In fact, I think I'm going to officially declare 2014 the "Year of the Sloth" so that everyone will be forced to slow down and make consistent, methodical progress rather than chasing sexy goals for a few weeks and then flaming out.

Goals can provide direction and even push you forward in the short-term, but eventually a well-designed system will always win. Having a system is what matters. Committing to the process is what makes the difference.

Malaysian Underinsured

Currently, the combined life insurance penetration rate for Malaysia is 54% including conventional and takaful, which means only half of the population have some form of life insurance. Malaysians are grossly underinsured.

While Malaysia had a gross income per capita of about RM32,000, a report by the Life Insurance Association of Malaysia (Liam) noted that the average sum assured among Malaysians was less than RM50,000.

When you buy a life insurance policy, the general rule of thumb is to insure a sum equivalent to 10 times your annual salary. The current average sum assured of RM50,000 is far below the ideal amount one should be insured for. This means that Malaysians are generally unprepared for rainy days.

Medical Fee Heads North With GST

The cost of medical care may increase by between 1% and 2% when the Goods and Services Tax (GST) is implemented next year, according to Health Minister Datuk Seri Dr S. Subramaniam. Dr Subramaniam, in a report by The Star, said although the health service was currently exempted from GST, technical issues remained.

 “For example, the services per se are GST-exempt, but the products used in the services are not. That is why we are asking that those products also be exempted from GST. Otherwise, the burden may be passed on to consumers in other forms.”

 Dr Subramaniam gave the example of 4,200 brands of essential medicine which will be exempted from GST. Initially, he said, the Customs Department had said that medication would not be exempted from the tax. However, after further negotiations, “a compromise was reached so that 320 chemical compounds consisting of 4,200 brands are under zero rate,” he was reported as saying after the ministry’s training institution graduation ceremony held at Kolej Sains Kesihatan Bersekutu Sultan Azlan Shah in Ulu Kinta yesterday.

 “Of course, we would like for all medications to be exempted from GST. Many medical-related associations are fighting for that, too. So we hope the Customs Department will make a decision because the ministry is not the deciding factor here.”

 Dr Subramaniam added that the government was looking into ways to reduce the cost of medical care should prices increase after GST is implemented next April. This comes amid growing concern that the cost of living will rise once the tax is applied.

Last month, Deputy Finance Minister Datuk Ahmad Maslan had tried to allay such fears, refuting the perception that GST would increase the cost of living. On the contrary, he said, as recently announced by Prime Minister Datuk Seri Najib Razak, the prices of 54% of 900 items would come down with the implementation of GST.

"Currently, these items are taxed 10% and with GST, they would only be taxed 6%. Also, the daily necessities are not taxed," he said in a report by Bernama. Domestic Trade, Cooperatives and Consumerism Deputy Minister Datuk Seri Ahmad Bashah Md Hanipah has also given assurance that the government would set up a special court to hear cases against unscrupulous traders who increase their prices indiscriminately after the implementation of GST.

In a separate report by Bernama, he said that 2,200 enforcement officers would be involved in monitoring the prices of goods after the GST implementation.

EPF Scheme Compromised

The Malaysian Trade Unions Congress (MTUC) today urged the Employees Provident Fund (EPF) to give it a bigger voice in investment decisions, saying the interest of workers were being compromised under current practice.

“EPF money has been invested and is still being invested to bail out ailing companies” and “investments are made in companies which are anti-union and violate workers’, trade union and human rights,” said MTUC Vice President J Solomon.

He noted that EPF is essentially run by the Ministry of Finance and complained that other stakeholders, including workers’ representatives, had “nominal involvement” in its decisions.

He called on the EPF Investment Committee to be more transparent with the contributors to the fund. “The MTUC should be a part of any decision making where it concerns investment,” he said. “It must be stressed here that what is being invested is the workers’ money.”

He said the current biggest beneficiaries of the EPF are employers, particularly companies linked to the government. He added: “Political patronage is a big reason for EPF investments. By way of such investments, the interests of workers are compromised on.

Tabarru Contract

As a practical religion, Islam has a solution for the implementation of insurance system that is in line with the principle of Islamic syariah. The “Tabarru’” contract was introduced as the basis in a takaful system where it is considered more practical and safe in managing insurance systems, in which the original intention was benevolent.

 

The debate being presented in this column is related to the concept of “Tabarru’” and the reason it is considered a safe contract from an Islamic point of view, especially in handling insurance transactions and activities.

 

“Tabarru’” is a form of voluntary donation from a particular party without soliciting any reciprocation, or exchange, from the other party. It is categorised as a unilateral contract whereby it is sufficient that one party declares their handout without any exchange.

“Tabarru’” is considered a symbol of piety, it is among the most encouraged practice in Islam. Apart from the obligatory almsgiving known as zakat, voluntary donations are very highly regarded in Islam as the spirit of mutual assistance and compassion are encouraged,

Islam also places alms at its utmost position for it is the basis of a harmonious society.
In takaful, each individual who participates in any of its products, be it family, or general, will set aside a part or the whole contribution in one fund. It is then named as the Risk Fund, which contains the collective donations of the participants.

The fund acts as a source of assistance for participants that suffer a bout of misfortune.
“Tabarru’”, the way in which it is applied in takaful, has eliminated any elements of “deceptive uncertainty”, “riba”, and gambling, where these features have made conventional insurance forbidden in Islam.

This is due to “Tabarru’” being categorised as a one-sided contract that does not require any exchange or reciprocation. This is unlike any other exchange contract, especially sale and purchase ones where an exchange is decided between two parties in their respective contracts.
In takaful, it is sufficient for any person extending a donation to present them to related parties, and their contracts will be considered fulfilled.

For an exchange contract, namely sale and purchase, the contract is deemed complete once the purchaser submits the money (the item’s price) and the seller surrenders the agreed item. If not, the contract will be considered as invalid.

Through the implementation of Tabarru’, tied in with the principles of takaful (Mutual Assistance), an environment of mutual assistance will be established.

For a simple analogy, consider that Participant A extended a donation for the express purpose of helping Participant B, while Participant B also donated to help Participant A, and this situation of mutual assistance is what deemed as “takaful” where participants endeavour to help each other and not through a company as what transpired in a conventional insurance system.

According to the principle of “Tabarru’”, each donation cannot be retracted. Even if
the participant cancels his participation in the takaful, the portion invested in the Risk Fund will not be returned. However, they can retrieve the balance in their individual fund.

Insurance Benefits Paid in 2013

 

 
The life insurance industry in 2013  provided a higher insurance protection to the public in aggregate, with 3.7 per cent higher claims amount, 14.2 per cent higher payout in maturity and cash surrender values and 6.7 per cent higher insurance coverage.

According to statistics from the Life Insurance Association of Malaysia (LIAM), claims paid in 2013 amounted to RM6.9 billion in various types of claims including death, disability, medical and cash bonuses, 3.7 per cent higher than the corresponding amount of RM6.7 billion a year earlier.

In addition, RM8.6 billion was paid in maturity amount and cash surrender values in 2013, 14.2 per cent higher than the corresponding figure of RM7.5 billion in 2012. The increase was mainly due to fluctuation in maturity payment which was dependent on the term of the policies.

“The life insurance industry in Malaysia remained stable with a small negative growth of 0.2 per cent in 2013, as measured by new business total premium (single premium plus annualised premium).

“The new business total premium in 2013 was RM8.19 billion, as compared to RM8.20 billion in 2012,” LIAM’s Vincent Kwo highlighted.

“Proactive measures should be taken by the insurers and the policy makers to increase insurance awareness and to encourage insurance purchase among the Malaysian population to reduce protection gap.

‘The result of our study are expected to spur the insurance industry to move forward in achieving the targeted penetration rate of 75 per cent by 2020 under the Economic Transformation Plan.”

As the government looks to enhance products by introducing regulatory measures such as the Financial Services Act 2013 and the Islamic Financial Services Act 2013 – both of which come into force this year – the times are definitely interesting for insurers.

The General Insurance Association of Malaysia (PIAM) believes market conditions will evolve to reflect broader-based competition and a principle-based regulatory regime which modernises the laws that govern the conduct and supervision of financial institutions.

“With the development of a comprehensive regulatory and supervisory framework for the insurance industry and a more competitive insurance market, another important structural adjustment that the regulator is looking at is the review of the existing costs controls that are applied to life and general insurers,” noted PIAM.

Its chairman Chua Seck Guan said: “It is important for insurers to challenge their mind set, consider the outlook for the global economy and make a commitment to develop further as the industry plays a robust role in Malaysia’s financial system, offering a wide spectrum of general and life insurance products to cater to a more knowledgeable and financially aware society.”

The industry is directing its efforts to ensuring a firm foundation for orderly transition into this new and challenging environment.

Towards this end, Malaysian laws will place insurance companies on a platform readied by Bank Negara Malaysia for advancing forward as sound, responsible and responsive insurance companies.

Claims - Life Insurance

Life Insurance does not offer any immediate gratification. It is sold on the basis of promises made by insurers for events that may occur in the future. The policy document is a contract between the insurer and the insured, that promises payment in case certain conditions are fulfilled.

It is the duty of the agent to facilitate the policyholder’s family in completion of claim requirements at the time of the event. Life Insurance above all is a contract of trust where policyholder should facilitate correct decision-making by providing all the relevant information.

Insurance is the business of covering the probability of an individual getting sick or dying, higher the risk higher the premium. A person with high risk paying low premium by withholding critical information is liable for penalty.

Here are some guidelines a policyholder must follow:

Correct information: While filling up your proposal form and while signing a contract, you must furnish all information in good faith since you will be held accountable for making a wrong declaration. For example, if you are suffering from hypertension, mention this fact at the time of buying the insurance policy. If you conceal this fact, in case of untimely demise your nominee’s claim may be repudiated on the basis of non-disclosure of material facts.

Nomination: The insurance company is discharged of its liability once it pays the sum assured to your nominee(s) registered under a process established by the Insurance Act, 1938. Since a claim without a nominee cannot be settled, all insurers ask for evidence that the claimant is the rightful person.

In case life assured has nominated somebody to get the benefits at the time of death, claim benefits are disbursed in favour of that nominee unless there is a Will provided to us (that supersedes the nomination) or there is a legal dispute. In case there is no nominee, benefits are disbursed to the Class 1 legal heirs and/or the designated heirs as per the Will or Succession documents. In case of maturity claim, amount is disbursed to the policyholder

Documentation: Submit all documents to make a claim. The documents under any life insurance death claim fall under the following broad categories:

n Documents related to the policy.

n Documents to prove that the occurrence of the event does not fall under exclusions mentioned in the policy contract.

n Documents to prove the identity and that the claimant is the rightful nominee.

An insurance firm cannot settle a claim until all documents are in place. In case original documents cannot be produced, there is a process to get the documents certified. To avail maturity claims conveniently, the policyholders should continue to pay their premiums on time. During the course of their policy tenure, in case the contact details or the address changes, they should get it updated in the records of their company. While the insurer will communicate when the policy would be due for its maturity, the policyholders should also proactively track their maturity timelines and get in touch with the company prior to maturity, to close the documentation requirements, for convenient disbursement of the claims.

One should also keep in mind a few do’s and don’ts for speedy and smooth settlement. Submit all the required claim documents together. Details of documents for claims settlement as well as various claims forms are available with the policy pack, with agent advisor, insurer’s offices and on insurers’ websites.

Common issues that can lead to delay are nondisclosure of facts, nomination not done at application stage, dispute between claimant and other legal heirs, unconfirmed cause of death and murder cases. In case of maturity claims the delays can arise on account of incomplete documentation or the policyholder not being reachable or not approaching the insurance company for the maturity claim amount.

Takaful In Malaysia

The Malaysian Takaful Association forecast takaful contributions to increase to US$3.02 billion this year from US$2.44 billion last year, on the back of market penetration rate of 14 per cent, said chairman Zainudin Ishak.

He said to meet the target, industry players needed to come out with more regular premium products such as protection, child education, retirement and medical.

"With only 30-year experience, coupled with 10 per cent market share or maybe less than that, there is an upside for us to offer the regular premium products instead of single premium, which has 50 per cent market share for takaful sector.

"I think if we are able to fix this then there will be an increase in market penetration as well as meeting Bank Negara Malaysia's target of 75 per cent by 2020," he told media briefing at the Takaful Rendezvous 2014 here on Wednesday.

Single premium is a plan in which a lump sum of cash is paid up front to guarantee payment to beneficiaries while the regular premium requires the holder to pay on a monthly basis.

 Zainudin said he expected more mergers and acquisitions (M&As) due to the rapid growth in the sector domestically amid increasing global demand.  "I supposed the period of the M&As probably should be very fertile with the introduction of Islamic Finance Services Act 2013 (IFSA) by the central bank, whereby the current players need to split their licences," he said.

It was reported that over the last two years, M&As in the insurance sector have mainly involved conventional insurers and analysts foresee consolidation in the takaful sector in view of the Financial Services Act (FSA) and the IFSA.

Under the FSA and IFSA, which came into force on July 1 last year, composite insurers and takaful players will, among others, be required to split their life and general insurance businesses under separate licences.

Under these Acts, insurers and takaful players have been given until 2018 to comply with the requirement.

Bankrupt, Life Insurance & EPF

Bankrupt
Any person who cannot pay a debt of RM30,000 can be declared a bankrupt under Bankruptcy Act 1967. Bankruptcy is a legal procedure involving an individual or business, who is unable to repay the outstanding debts.

When a person is declared Bankruptcy, the Directory-General of Insolvency will handle and take possession of all books of documents and account relating to their financial affair or property. Only after five year of bankruptcy, he or she can apply to the Directory-General of Insolvency (DGI) for discharge.

The DGI will consider the cause of bankruptcy, the bankruptcy’s payment to all his creditors, bankruptcy tenure, health and age of the bankruptcy and the level of cooperation given in the administration of his affair, before decide to discharge a bankruptcy case.

Department of Official Assignee The Department of Official Assignee in Malaysia is one of the departments under the control and management of the Prime Minister’s Department with twenty-one (21) branches situated in towns where there is a High Court and the headquarters is located at Putrajaya.

The development of bankruptcy law in Malaysia is governed by the Bankruptcy Act 1967 (hereinafter referred to as “the Act”) which is derived from the English Bankruptcy Act 1883 that governed the trade and commerce in England. The English Bankruptcy 1883 was adopted and modified in accordance with the local needs. The Act 1967 has been amended a few times and the most recent amendment was on March 2000 and came into force on
1-10 - 2003.

With the coming into force of the Bankruptcy (Amendment) Act 2003, the head of the Department of Official Assignee Malaysia who was formerly known as Official Assignee is now known as the Director General of Insolvency (hereinafter referred to as “the DGI”). The change of the title has no effect to his dual functions and responsibilities in the administration of the estates of the bankrupts and companies in liquidation.

What Are The Restriction A Bankruptcy Will Face When a person becomes a bankrupt, all his property will be vested in the official assignee who is appointed by the government under the Bankruptcy Act 1967.

• Cannot leave the country except with DGI’s permission
• Not allowed to take a loan exceeding RM1,000 
• Not allowed to work with spouse, family or relatives’ company 
• Cannot be a company director or take part in the management of company. 
• Cannot be nominated for an elections. 
• Cannot maintain any action except with sanction of DGI. Bank Account

Once person is made a bankrupt, his existing account shall be deactivated and withdrawal of money would be debarred. A bankrupt, however, may open a bank account or continue using his existing account for reasons such as crediting his salary or any profit gained provided he obtains the permission of the DGI. He would then have to make an application for permission of DGI for reactivation of the account. The application to obtain the DGI's permission in both cases shall be made to the respective MDI (DGI) branch, where his bankruptcy case is being administered.

Purchasing Life Insurance Policy 

When a person becomes a bankrupt in law everything he owns (including his life insurance policies) becomes the property of the Official Assignee. He cannot buy an insurance policy without the permission of the Official Assignee.

The Official Assignee can and may give permission to a Bankrupt to buy a reasonable protection policy (i.e. a Term Policy) for the benefit of the bankrupt’s family. This permission has to be given in writing.

An effective route to address this problem is to get the spouse (of the bankrupt) to buy a policy on the life of the bankrupt. The policy will be owned by the spouse and not the bankrupt. In this arrangement, the official assignee will have no say over the policy.

Previous Insurance Proceed From Life Insurance Policy Before Bankruptcy Technically the Official Assignee manages all the assets of a bankrupt including the bankrupt’s life insurance policy. Where the life insurance policy is not assigned, then this policy shall be considered an asset of the bankrupt.

Insurance proceeds (claims, cash surrender value, maturity value, cash dividend, Bonus etc) are subject to the following treatments:-

A: Insurance Proceed - Bankrupt Still Alive
DGI is entitled to recover all insurance proceeds of life insurance from a bankrupt’s life insurance policy. For example, should a bankrupt exercise the option to terminate the insurance policy, DGI will seek to recover the cash surrender value. In another example, DGI is also authorize to recover insurance proceed from a claim proceed as a result of disability (example Critical Illness, Total & Permanent Disability).

B: Insurance Proceed – Death of a Bankrupt
In the event of death of a bankrupt, the insurance proceed shall be subject to the following treatments

I: Without Nominee - The insurance proceed (sum assured) shall be considered to be the estate of the deceased (bankrupt’s) where no nominee is named in the life insurance policy. The Official Assignee would have access to the insurance proceed

II: With Nominee - The insurance proceed is paid to the nominee and is creditor proof.

Employee Provident Fund (EPF)
DGI would exercise control over the EPF account of a bankrupt:-

Withdrawal – Bankrupt is Still Alive
A bankrupt is not entitled to with draw money from his/her EPF account without the written consent of the DGI. The DGI do provide written consent to bankrupt to withdraw money from his/her EPF in certain circumstance. However, it must be noted that the DGI can seek to recover the withdrawn money from the bankrupt.

Death Of A Bankrupt - In the event a bankrupt suffers death:-

A: Without Nominee - The EPF money shall be considered to be the estate of the deceased (bankrupt’s) where no nominee is amed. The Official Assignee would have access to the insurance proceed.

B: With Nominee - The EPF money shall be paid to the nominee and is creditor proof.

Keyman Insurance

Substantial number of life insurance policies had been incorrectly sold as Keyman Insurance to business owner especially to the SME.  This so-called “Keyman Insurance” is not in compliance with Inland Revenue Board (IRB) guideline (IRB Public Ruling 2/2003).

Business Owner

If you are a business owner and/or majority shareholder of a company, is obvious that you are the “key person” or keyman to your business. Unfortunately – this definition does not apply to “Keyman Insurance” under the life insurance industry.

Keyman Insurance

The keyman insurance is meant to protect a key employee in a company, against the loss of profit suffered by a company in case the key employee dies or is totally & permanently disabled. The beneficiary of keyman insurance policy is always the company (not the family member(s) of the keyman.

A simple test on the validity of Keyman Insurance is to focus on the beneficiary of the keyman insurance policy? If the beneficiary is the keyman’s family members, then it is not a keyman insurance! It is a normal life insurance policy.

Business owner will defend this and claimed that the premiums are paid by the company (not from the business owner’s pocket). Practically, a business owner can do this but it is not in compliance with the tax laws and there could be implications when IRB audits you.

Type of Insurance

The insurance plan that is suitable to implement keyman insurance and in compliance with IRD is as follows:-

• Term Life Policy
• Personal Accident Policy
• Investment-linked Policy
• Whole Life Policy
• Endowment Policy

Allowable Expense

Premiums of Keyman insurance is allowable based on the following IRD Guidelines.

           Term life and PA policy

           Term Life and PA policy have zero (or almost zero) element of savings (zero or         
           almost zero cash value at the end of the policy duration. Therefore the premiums
           paid are allowable deductions (allowable expenses) for the company.

Investment-linked, Whole Life & Endowment Policy

           Investment-linked, Whole Life & Endowment Policy have cash value, cash surrender
           value & maturity value. The premiums that are paid for protection is an allowable  
           deduction. The balance of premium paid that attracts cash values is not an allowable
           deductions (allowable expenses) for the company.

Taxation On Life Insurance Proceeds

The tax application on the life insurance proceeds (surrender cash value, maturity value etc) depends on the life insurance plans and the allowable deduction.  A simple guide is

Allowable Deductions

           If the company claim the premiums as an allowable deductions – then the proceed is
           income taxable to the company

Not Allowable Deduction

           If the company does not claim the premiums as an allowable deductions – then the    
           proceed is not income taxable to the company


Perquisite
A perquisite is a payment or profit received in addition to a regular wage or salary, especially a benefit expected as one's due (example, a tip, gratuity, use of company car, telephone, entertainment etc. All perquisite provided by the company is treated as income taxable item to an individual.

perquisite is exists when an insurance premiums are paid by the company to insure the life of keyman of the company (business owner, shareholder, director) and the beneficiary is the family members of the the keyman.

Allowable Deductions Under Individual Income Tax

Annual allowable deductions for individual under current IRD guidelines:-
1: RM6,000 (EPF and Life Insurance premiums combined)
2: RM3,000 Medical insurance & Children Education insurance Policy
3: RM3,00 Annuity plan
4: RM3,000 Private Retirement Fund

 

Gratuity Payment
A company receives insurance proceeds from insurer in the event a keyman suffers premature death. The company may decide to make a gratuity payment to the beneficiary of the keyman. The treatment for tax on the gratuity payment depends on the following:-  

No Contractual Agreement

          Gratuity payment to beneficiary is generally free from if there is no prior contractual     
          agreement (employment) prior to keyman’s death (Paragraph 14 of Schedule 6of the
          ITA 1967)

Contractual Agreement

           Gratuity payment to beneficiary is generally subject to tax if there is prior contractual
           agreement (employment) prior to keyman’s death. However, IRD normally does not
           seek to tax under this circumstance.

Purchasing Life

What is your need
Structure a life-insurance plan to meet your circumstances. For example: A single person might need less life insurance than a couple or a couple with children.

Buy from authorized agent
Use the services of trained insurance professionals. Check with LIAM (Life Insurance Association of Malaysia) to ensure that an agent and company are licensed to do life insurance business.

Get to know your agent
An agent isn’t permitted to be the beneficiary of a policy sold to you by the agent — unless the agent is a relative. Nor is the agent permitted to misrepresent any aspect of the policy being sold or a policy you already own, or encourage you to put incorrect information on an application.

Decide what type of policy you want
Term, whole life, universal life or a combination. Make sure you calculate your premiums for the life of the policy, as it is possible to pay more in premiums than the policy’s face amount.

See whether the policy has an accelerated-benefits feature
Policy provision that lets the policyholder, under certain conditions, collect part of the death benefit before he or she dies.

Be alert to any promise
That you won’t have to pay premiums again (the vanishing-premium pitch). Also, make sure you are aware of any “surrender” penalties.

Don’t sign any application
That isn’t completely and accurately filled in and dated. Make a copy for your files.

Study the policy
As soon as you receive it, to make sure it’s exactly what you ordered. Many companies offer a “free-look” (or “right to review”) provision; take advantage of it.

Review the rules
Only the policy holder may cancel the policy. If premium payments are not being made, the insurer generally sends a notice before cancellation.

Make out the premium payment
Make payment to the insurance company, not the agent.

Remember to pay
A failure to pay your premium will cause your policy to lapse or, potentially, to be terminated.

Review your policy periodically
Insurance needs change at different periods of life.

Wealth Planner

There was a time when life insurance agents provided life insurance, investment advisors provided money management, accountants did tax work, attorneys did legal work and so on and so forth. But, for certain types of wealthy clients, that time has passed. “Over the past few decades there’s been a pronounced trend toward the melding of functions when it comes to servicing wealthy clients,” says Hannah Shaw Grove, an expert on the high-net-worth markets and a founder of Private Wealth magazine.

“Professionals like accountants or life insurance producers who have strong client relationships leverage that proximity and trust to help them expand into other service areas, provide more comprehensive solutions to their clients and develop a more profitable business model. In essence, it is the process of becoming a wealth manager.”

Wealth management is the consultative process of meeting the needs and wants of affluent clients by providing the appropriate financial services and products. Wealth management, done well, is about problem solving. It addresses the often-interconnected concerns and issues of wealthy individuals and families and delivers integrated financial solutions. It’s a holistic orientation that is in high demand by the affluent.

“Strong client relationships are important for all wealth managers and mandatory for those who are new to the business model” according to Grove. “Building rapport, in combination with broad-based and insightful assessments, makes it easier to spot opportunities for better, more inclusive service and problem-solving.”

Furthermore, most of these wealth managers are structured to tap the capabilities and proficiencies of other professionals and organizations. They recognize that they can’t be expert at all forms of planning and services and have constructively aligned themselves with the appropriate resources to build best-in-class solutions.

 

High-caliber life insurance agents are one type of professional that has been able to successfully transition from providing a narrow scope of services to delivering a spectrum of planning and investment expertise. There is an elite group of sophisticated life insurance producers who are now operating as wealth management practitioners.

When empirically evaluating life insurance agents against those agents that have adopted a wealth management approach, the latter are significantly more successful on a number of key metrics. In one study, we evaluated the businesses and practices of 316 high-end life insurance agents who were all statistically matched with respect to the amount of life insurance they wrote. About 20 percent of the sample was comprised of agents-turned-wealth managers and the differences in their practices were dramatic. After transitioning to wealth management, the amount of life insurance they wrote on an annualized basis increased by more than 35 percent, within two years they were responsible for between $50 and $100 million in investable assets and they were more than four times as likely to get client referrals.

“There’s no shortage of evidence that a wealth management approach is good for both the client and the practitioner,” confirms Grove. “High-net-worth clients want a wealth management experience that transcends individual products and services and the professionals who are sensitive to those preferences are likely to benefit. Insurance agents, in particular, are a natural fit with the financial elite because they understand the complex aspects of multigenerational wealth and how to orchestrate an intricate long-term planning process to achieve goals.”

Seperate Life From EPF

Life Insurance Association of Malaysia (LIAM) is proposing a separate tax relief for Employee Provident Fund (EPF) contributions and for life insurance premium in Budget 2015 in order to promote financial planning among Malaysians. 

“To achieve this aim, LIAM proposed that the tax deduction be made separately available for EPF contributions and life insurance premiums, ie RM6,000 tax relief for EPF contributions and a separate RM6,000 for life insurance premiums,” said president of LIAM

Vincent Kwo Shih Kang in a statement yesterday.

In addition, LIAM is proposing a tax relief for medical and education insurance premiums to be increased from the current RM3,000 to RM6,000 as the current amount of tax relief is insufficient in most circumstances.

LIAM noted that the current taxation system which provides a RM6,000 tax deduction on combined
EPF contributions and life insurance premiums was last revised in 2005 and has suffered from inflation erosion.

Apart from inflation erosion, the current tax incentive system also does not differentiate the two important elements of financial planning, ie savings and protection where EPF is for meeting long-term savings needs while life insurance is primarily for the purpose of financial protection with a secondary aim of long-term savings.

LIAM is also proposing a separate deduction so people can use the extra money to invest in financial protection plans to address the protection gap issue especially as the Economic Transformation Programme has set the objectives to increase the insurance penetration rate to 75% of the population by year 2020. Currently, the penetration rate of life insurance and takaful is at 54%.
“The life insurance industry plays a very important role in financial protection, financial accumulation and healthcare funding.

With proper advanced planning and the right tax structure, the private sector and the rakyat can be incentivised to play a bigger role and form a public-private sector partnership with the government in sharing the cost of various social economic benefits as our country progresses towards a developed nation,” added Kwo

GST & Insurance

The Malaysian Insurance Institute (MII) is not expecting a decrease in insurance penetration rate next year despite the implementation of the Goods and Services Tax (GST).

“The growth of life insurance has always been slightly higher than the country’s gross domestic product and the trend is expected to continue in that vein. The growth of the industry has always been in tandem with the growth of the country’s economy. As long as we are growing economically, the insurance market will also grow.”

He said the life insurance industry, which is targeting to achieve 80 per cent penetration rate by 2020 from 54 per cent last year, would be able to achieve its target despite challenges.

 

The challenges for the industry, besides the lack of talent, are to align the products to the market. The Malaysian market is not short of portfolio offerings but is lacking in distribution channels and market awareness.

Medical Claim Barriers

SOME months ago, I was hospitalised for nausea, high fever, constant vomiting and muscle weakness. Initial tests ruled out cancer, but subsequent tests confirmed resistant bacterial infection, which needed strong antibiotic drips.

Decisions for additional tests and treatments were based on the insurance policy, which had numerous exclusion clauses and conditions that needed to be met before such tests could be claimable.

The policy stated that hospitalisation had to be for 24 hours for any fees could be claimable. This requirement was fulfilled since the doctor insisted that I had to be admitted for eight days.
I had learnt my lesson years ago when I was hospitalised after an accident but voluntarily checked out within 24 hours, which rendered my claim void.

There are certain tests and treatments that are only claimable upon performing other medical procedures, without which, the whole amount would be non-claimable.

This is ridiculous. Certain procedures are dangerous if not needed, leaving the insured in a dilemma.
It is unfair how insurance policies dictate how we fall ill or die before any sum is claimable.
Insurance companies have such unreasonable clauses that it is no wonder that the eventual hospital bill charged to the insurance company is exorbitantly high since there are so many unnecessary procedures that need to be done to ensure that the charges are claimable.

With the advancement of medical technology, some serious illness, even cancer, can be treated with simpler medical procedures.

Complaining to the Financial Mediation Bureau is a long affair, which decides cases based on terms and conditions in the contract but gives no leeway to debate the unfair contract terms and unreasonable mutuality clauses, where one claim is claimable only if another medical procedure is performed.

The National Association of Malaysian Life Insurance Field Force and Advisers, and Life Insurance Association of Malaysia must work to review unfair contract terms in insurance policies.
One way is to introduce an Unfair Contract Insurance Terms Act to ensure that the terms and conditions of insurance policies are simple and straightforward.

Such an act must be applied retrospectively so that existing insurance policy holders have an avenue to challenge any unfair terms and conditions of the policy.

Policy holders often have their claims rejected over a minor detail and/or the non-performance of an unnecessary medical procedure.

Falling sick or being involved in an accident that requires admission to a hospital is stressful.
In desperation, most insurance policy holders would take the easier way out, and submit to unnecessary tests and treatments to ensure compliance with the policy, leading to a vicious circle of escalating healthcare cost and insurance premiums.

Ng Shu Tsung, Kuala Lumpur

Closing A Deal

Closing lines: They can be a little cheesy, sometimes unnecessary and most times overly dramatic. But they've also worked -- on some occasions -- to help close sales and gain clients. Of course, in reality, you're not "closing" a sale, but opening a relationship once that prospect signs up for a policy.

And while there is no "best" way to close a sale, and no one closing line is a fit for each prospect, some of the following helped agents turn the other individual in the room from prospect to client.
Take a look at some of the best closing lines out there and please, let us know what sales techniques you feel work best.

1. "Just one more thing"
This is a line made famous by the 1970s classic TV detective, Columbo. He often used this line when he was done questioning suspects. Straight-faced, he would head for the door, seemingly ending the interrogation. But he would pause just before exiting the room, turn, glare at the suspect and say, "Just one more thing."

Whatever followed that phrase would pack an incredible punch and leave the suspect deep in thought. The tables were turned, the suspect is weakened and Columbo, at this point, usually gained the upper hand.

When prospects are being sold to, they naturally have their guard up. When they feel the sales process is coming to a close and they are no longer being "sold to," they let their guard down. This is when the agent or advisor should say the most powerful thing in his or her arsenal of lines. "Just one more thing...your family depends on you."

2. "Level with me"
To some, this phrase may seem a bit too aggressive. To others, maybe it's not aggressive enough. Let's face it, you are selling protection and financial security to your prospect and their family.
This phrase, like the aforementioned line, should be used towards the end of your meeting. For example, as you approach the end of the selling process and the customer says he wants to think about it, ask him to get to the point: “Level with me. Have I failed to show you the value that you will receive from your investment?” Then be quiet.

Inevitably, the prospect will see that you are selling him something of value. You are selling him protection. You are selling him something his family needs. 

3. "You can put a price on anything, except a good night's sleep"
Sure, sure, it's one of the more cheesy closing lines in existence, but this saying is true. Life insurance agents and financial advisors are selling products that allow for their clients to have peace of mind. And, as we know, peace of mind usually aids in a good night's sleep.
You, as an agent or advisor, are selling client's a good night's sleep. Not one person you meet should be able to tell you that there's no way they would be able to rest better, knowing their family was taken care of should something happen to them. If they are, in fact, able to tell you this, then maybe that's not to type of client you want.

4. "Could this be a benefit to your family?"
This one is pretty self-explanatory. A prospect's answer to this should always be "yes" because life insurance would undoubtedly benefit a family in need. And with that answer, they've pretty much sold a policy to themselves.

Just ask the question: "Could a check for 500,000 be of use if your husband/wife passes away?"

5. How much would you be willing to spend to make sure your family is taken care of?
This question could elicit a range of responses, but usually, if a prospect gives a specific dollar amount, it winds up being much less than the price of a monthly premium on a life insurance policy.

The point of this line is to refute the widespread assumption that life insurance is too expensive for the average Malaysian household. Indeed, people are usually shocked when they learn how affordable it actually is.

This line, like many of the above, could be used at any time during a meeting with a prospect. But it may work best if saved until the end of a pitch going nowhere. Before leaving, ask, "How much would you be willing to spend per month on a [insert dollar amount] life insurance policy?"

The prospect's possible response: "Right now I can only afford an additional [insert low dollar amount] in monthly expenses."

And your response: "That's great because we have [insert product name] that is only [insert amount lower or equal to prospects number] per month and will provide your family with [amount of pay out] in the event of your death."

It's hard to say no to something affordable that can benefit those that depend on that prospect the most.

Great Sales Ideas

Life insurance producers face each New Year intending to make it the best one yet -- a banner year. But as we all know, it takes more than even the best intentions to be successful in our business.
Even though there is an abundance of good advice on how to pump up production, all too frequently the results at year’s end are below expectations. My job includes getting acquainted with producers and following their careers, and it’s abundantly clear that the most successful individuals focus on a few issues. I call it “A Life Insurance Producer’s Four-Point Plan of Success.” It may be helpful in the year ahead.

Demonstrate the value of life insurance as an asset class
With Term Life products accounting for 80 percent of all life policies sold, it seems fair to conclude too many of us are order takers. We’re not selling the concept of life insurance as an asset class. As you know, a life insurance policy is also an asset, providing non-correlated returns, liquidity and tax advantages.

While some might consider the premiums an expense, life insurance is an asset that will provide cash, as promised under the contract, at death to designated beneficiaries. The amount paid by the insurance company at death will not be affected by market conditions. While this isn’t a new idea to producers, it can be big news to consumers, including those who already own life insurance plans.

The most consumers seem to know about life insurance is that they must die before there’s a payout, which may help explain why what we sell has so little appeal.

We talk too much about ‘life insurance policies’ and not enough about life insurance as an asset with an internal rate of return (IRR) that generates guaranteed tax-free income, a statement no other investment can make.

Since IRR can be applied to any asset class, it’s an easy and straightforward way to show clients why permanent life insurance is a sound choice.

Give clients what they want

Even though it’s sometimes easy to think otherwise, clients usually know what they want. They may not be adept at expressing themselves or feel reserved about speaking up, but they still have a picture in their minds of what they want.

More often than not, the image they have in mind is a comfortable, enjoyable lifestyle they can count on over the years. What goes with it is having the financial resources so they can educate their kids, have an adequate retirement, and afford some type of long-term care if they need it. Although it may seem otherwise at times, most people have a sensible outlook on their lives, their expectations and the future.

Today, no one is better equipped to give clients what they want, to help them reach their objective than the life insurance producer. No one. Today’s life insurance programs are more flexible than ever.

We can customize life policies with any of a growing number of riders to meet specific client objectives, and it may surprise many consumers that they don’t need to die to take advantage of the benefits of a life insurance policy, or, as we say, living benefits.

Today’s clients are more concerned with outliving a retirement plan than they are death. With increased longevity and life expectancy, their concerns are well founded (10,000 people are turning 65 every day and seven out of 10 will have some sort of chronic illness). This is why living benefits have so much value to consumers. We all know adults who are caring for an aged parent. These products provide solutions that help meet these challenges.

The flexibility doesn’t stop with policy riders. It goes further with the ability to ‘trade in’ a policy for a ‘model’ that better fits current needs. And because a life policy can have value, they can, if necessary, sell it.

Be of service

Since life insurance producers think of themselves as salespeople, this is also their public image; it’s the way most people think of them. This is one reason why it’s difficult for producers to get prospects to listen to their story, agree to an appointment (and then keep it) or provide referrals that have value.

Life producers aren’t alone. Even though we often claim to be ‘different,’ other businesses and professions face the same obstacles. Salespeople in other fields have had the foresight to overcome their obstacles by offering their customers a high level of service that fosters satisfaction, builds loyalty and establishes beneficial relationships. The attitude of making the sale and moving on must change if life producers want to be successful.

Frankly, the customer service experience for producers is simple — there’s nothing complicated about it. Even though it’s largely ignored, the single tool most effective in building client rapport, confidence and continuing business is the largely ignored annual policy review.

Producers complain because they don’t have enough leads and that the phone never rings. All this suggests that we have a lot of time on our hands. Why not put it to good use doing policy reviews? Lifestyles change, health changes, obligations change, goals change, and the policy review is the way to determine the appropriateness of a client’s current life insurance program, where it may not measure up, and what is needed to get it into sync with their current situation and future objectives. The key to sales is customer service.

Getting past the pleasantries

We all think about our lives and the way we would like them to progress. But, more often than not, we don’t have the answers for what it will take to make this happen.

As most producers know, prospects will ‘open up,’ as they say, if they have the opportunity. When we go to the doctor, we don’t spend time talking about a recent vacation, an upcoming sports event or ‘blowing the breeze’ about our kids. Yet, our meetings with prospects often start that way. It may only distract us from using the time to learn what the issues that concern clients and having the opportunity to share possible solutions with them.

As most every producer has learned, prospects will ‘open up,’ if we let them. And that’s every producer’s job — to clear the way so prospects can talk about what’s most important to them. When this happens, producers know how much prospects appreciated the opportunity. When meeting with prospects, it’s time to get down to business.

Becoming successful requires a plan, one that helps a producer stay on track for writing more of the right kind of business.