Convince consumers that currently do not own life insurance that they should have a life insurance policy, and (2) encouraging existing policyholders with inadequate levels of coverage to increase their coverage. Which stage of the decision-making process is most relevant here? How would you proceed in deciding what the company should do? (1) convince consumers that currently do not own life insurance that they should have a life insurance policy, and (2) encouraging existing policyholders with inadequate levels of coverage to increase their coverage. Which stage of the decision-making process is most relevant here? How would you proceed in deciding what the company should do?

Convince consumers that currently do not own life insurance that they should have a life insurance policy, and  encouraging existing policyholders with inadequate levels of coverage to increase their coverage.  Which stage of the decision-making process is most relevant here?  How would you proceed in deciding what the company should do?

Need recognition is used to answers this question. Customers who currently do not have a life insurance policy are simply because they do not recognise there is the need of it. So, why people do not buy life insurance?

Firstly, people think life insurance is costly. For example, most of the youth, especially those who just enter the society, earn less income. Due to lack of financial strength, so they are hardly to afford to buy a life insurance. Another example is a low income earner who has a family to take care. Worst, if there have an old man in the family; there will have more expense to pay such as medical fees. So, they do not have extra money to buy life insurance.

Furthermore, people always underestimate the risk. They always think they will not so unlucky, all the accident only happens to other. In addition, the medical condition is good; the mortality rate is greatly reduced, people will not die so easily in today’s world. Therefore, they do not think there is a need to buy the life insurance.

Moreover, people do not trust insurance company. Those people usually do not have insurance knowledge. They do not trust insurance just because they heard others said insurance is a scam. For example, James relative spent $100 to buy an accident insurance, accident happened, he gets the claim from insurance company. But, he unsatisfied with the claim so he tells James not to believe any insurance company. In the end, James will not buy any insurance.

How would you proceed in deciding what the company should do?

Company can offer a sales promotion on place like invest fair, orchard road and all the bus interchange. The reason to make a promotion on that area is because there are a lot of people pass by. Therefore, company have more opportunity to convince people to hold a life insurance. In addition, company ask those pass by people to fill up the insurance survey and categories them into different segment. Then, company come out of different policy to target different group . Furthermore, company must ensure all insurance agents to be familiar to all the type of Life Insurance Company has offered and have good eloquence. A well educate insurance agency with good eloquence is important because they can  explain well to people about the important of life insurance and make consumer recognise the need to buy it.

From the survey, company can choose to use different strategy to target different group of people. If company want to target Sole breadwinner, they need explain to them the consequence to their family need to face if he died without a life insurance. For example, surviving family members often face very difficult financial consequences like having to work additional jobs or longer hours, (Lahms Life and Health Insurance Service n.d.). Sole breadwinner concern most on the family value. Company then can emphasis more on family value to convince that sole breadwinner to buy life insurance.

Many people do not carry life insurance because they feel it is costly. To deal with this problem, company can come out with this $25,000 term life plan. With this term plan, people paid less monthly premium when they are young and increase the protection as they grow older. When he reaches 41 years old, he paid constantly $10 monthly.After41 years old; he can convert term life insurance to whole life insurance anytime until 65years olds. The amount of coverage in term life insurance will be the same as whole life insurance.Futhermore, once convert to life insurance, each of the children in the family will get $1,500 term insurance. By paying the premium every month, when the children reach 25, they will have a $25,000 term life insurance. Inexpensive policy yet can give people adequate coverage can help to convince people to buying the plan.

Encouraging existing policyholders with inadequate levels of coverage to increase their coverage?

Post-evaluation is the stage that is most relevant to this question Most of the people think they have already buying the life insurance so they should be safe. But, they are neglecting to re-evaluate whether they have bought adequate life insurance or not. So, why people holding an inadequate policy?

In the excitement of planning for their new baby, many couples forget to adjust their term life insurance to their new needs. Also, most of the couple do not re-evaluate their policy because they think they existing policy is adequate. But, they do not realised their policy will become inadequate when they having a child. Their existing policy will not cover all the children expense when they died. Therefore, most of the couple will have inadequate policy when they have a new baby.

Many people did not realise the effect of inflation toward their life insurance. For example, if James had bought a $50,000 life insurance 40 years ago. At that time, James believed that $50,000 life insurance is would be enough to coverage him .However, due to inflation, dollar of value losing every day. After 40 years, the $50,000 may be just $20,000 or even less which. Instead of buying a house, James can only buying a car. Therefore, inflation cause adequate policy becomes inadequate policy.http://www.insweb.com/life-insurance/life-stages-life-insurance.html

Company evaluate their entire existing customer profile; target that customer who holding inadequate life insurance. For example, target new married couple who started to have their own family, and forget to upgrade their policy to adequate level. In this case, the existing policy will not cover all the children expenses such as school fees. Worst, if both parents died, their children will be having problem on living without an adequate policy. All of the parents love their child and want their child grow well even if they are not around .So, company use this example to encourage those married couple to upgrade their policy to adequate level to ensure their children having sufficient protection in future. http://blogs.consumerreports.org/baby/2010/05/when-to-buy-life-insurance-new-baby-when-pregnant-for-parents.html

For those existing policyholders who hold inadequate policy because if inflation, Company can come out with this ‘Anti inflation policy’. By consider people it do not upgrade because it is too costly, company offer this Anti inflation policy is use to tackle this problem. Every existing policyholder  just need to add 3%  of the total premium they need to pay annually and  their policy coverage will be adequate .The reason to increase 3% of the total premium annually is because it is use to offset the inflation rate (1).This additional policy is inexpensive yet can help policyholder to have adequate policy. Therefore, it can encourage people to increase their coverage.