When the Salesman Calls

A great deal of life insurance is still sold in people's own homes. It is not just conventional and unit-linked companies that employ salesmen to canvass "prospects"; there are also the industrial life offices, and some friendly societies also actively promote their own schemes in some parts of the country.

You should think carefully before signing a proposal form offered by one of these salesmen on the spot, however attractive the policy being sold appears. It is always worth taking time to look into the proposal and comparing it with what is available from other companies. Sometimes when it is closely examined the content will be found to be different from what the salesman has claimed. For example, what is claimed to be a "flexible short-term savings plan" may prove to be one that matures when you are aged 65 but includes the option to take the proceeds early - at a penalty. It is worth remembering, also, that the proposal form itself does not constitute a contract: this comes into force only when the proposer pays the first premium. Having filled in and signed a proposal form, you are at liberty to refrain from paying the first premium in which case the proposal lapses and no contract comes into being.

Sales talk and sales methods grow ever more sophisticated. One manual for salesmen points out that there are so many different aspects of life insurance policies that the one the salesman is selling can almost always with some justification be claimed to be the "best" available. The pressure method - using a series of arguments framed in such a way that you are forced to agree with what the salesman says - is fairly common. One after another of these arguments will be deployed in an attempt to "close" the sale by obtaining your agreement to sign the proposal. The best approach is to make it clear from the outset that you are not prepared to do this immediately in any case, but allow the man to explain what it is that he is offering. Many reputable companies already incorporate a "cooling-off" period whereby the "prospect" has the right to withdraw from the contract within a specified period, usually about N0 days, and this is likely to become mandatory for most sales in the near future.

When the Salesman Calls

Comments on Case Studies

A few general points may be made on these examples.

John King

Nowadays most employed people will find that their pension scheme does provide certain benefits for widows, though the size of them varies considerably. It is always worth checking these and taking account of them in planning one's life insurance needs: there is no sense in over-providing. Note that it is often possible to get the cover one needs more cheaply by making an addition to another policy, as in the case of John King's term assurance. This method is not appropriate, however, in cases where the insurance... see: Comments on Case Studies

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