M8: IDENTIFYING CLIENT NEEDS
Ø Childhood: two basic needs for parents are
o Secure their children’s financial position, if they themselves die prematurely; and
o Provide for their children’s future expenses such as for higher education, marriage and living expenses.
Ø Young unmarried: young unmarried with no-dependents-
o Low protection need as there are no dependents.
o Ned to invest any surplus income and earn high returns gains priority.
Ø Young unmarried: young unmarried with dependents-
o The family will be adversely affected if the young person dies prematurely.
o Needs to protect their income.
Ø Young married: double income family-
o Financial dependency on one person is reduced.
o Such couples are also commonly known as double income no kids (dink) couples
o Loss of income due to the death of any partner needs to be compensated.
o An individual term life insurance plan for both partners is suitable at this stage.
Ø Young married: single income family-
o Savings are likely to be lower than for the double income family-
o Income protection assumes priority over other needs.
Ø Young married: young married with children: double income family-
o Effect of the loss of income due to the premature death of one of the partners will be less. Protection of income is important.
o Investments towards their children’s future can be a high priority.
Ø Children education planning:
o The insurance agent should take into consideration the cost of the education course selected by the prospect for his child.
o The agent should assume an education inflation rate and based on the date when the prospect’s child will enrol for higher education, work out the amount that will be required at that time.
o Assuming a reasonable rate of return , the agent should arrive at the monthly amount to be invested to accumulate the education fund.
o The propect should start making regular investments towards the child’s education fund in a child insurance plan.
Ø Children education planning married with older children:
o Financial responsibility is towards their children’s higher education and marriage.
Ø Pre-retirement.
