Study 2 - Sales - MC Flashcards
Which of the following statements best describes what sales planning is?
A. Part of strategic planning and takes place at the management level
B. Best left to experts who translate the mission into action
C. Part of corporate planning in multinational companies
D. Best handled by individual producers at the personal level
Part of strategic planning and takes place at the management level
Rationale: Sales planning is part of strategic planning and takes place at the management level.
Which of the following promotional activities would be an example of differentiation?
A. A brokerage has purchased a large billboard on a major commuter highway.
B. An insurer developed commercials and purchased a television advertising package.
C. An intermediary has arranged for flyers to be included in the local newspaper.
D. An insurer offers a discounted rate to the owners of a specific luxury car
An insurer offers a discounted rate to the owners of a specific luxury car.
Rationale: Insurers have to differentiate themselves to create a client base. They can do this by carving
out niches within the business. For example, they may be differentiated by the segment of insureds
targeted or by tailoring the wordings used.
In a recent sales meeting, the sales manager has asked the customer service agents to start
collecting email addresses from Facebook with the intention of sending out a mass newsletter to
promote a new cyber security insurance product. What concerns should be addressed in this
meeting?
A. The Canadian Anti-Spam Legislation (CASL) prohibits commercial messaging without
express permission.
B. The Personal Information Protection and Electronic Documents Act (PIPEDA) prohibits this
type of collection of email addresses.
C. The Insurance Act prohibits this type of mass sale of insurance products.
D. There are no concerns because Facebook is a public forum.
The Canadian Anti-Spam Legislation (CASL) prohibits commercial messaging without
express permission.
Rationale: The Canadian Anti-Spam Legislation (CASL) applies to all electronic messages (that is, email,
texts, and electronic messaging) that organizations send in connection with a commercial activity. Its key
feature requires Canadian and global organizations that send commercial electronic messages within,
from, or to Canada to receive consent from recipients before sending messages.
Which one of the following techniques is most likely to increase a sales agent’s closing ratio?
A. After completing the application for a new client, asking for the expiry dates of other policies
the agent may have the opportunity to quote
B. Going door to door and asking prospects for the chance to quote their policy
C. Putting an advertisement in a local paper that is going to generate calls from many different
types of insurance buyers
D. Hiring a lead generation service that will survey the trading area for potential leads
After completing the application for a new client, asking for the expiry dates of other policies
the agent may have the opportunity to quote
Rationale: Often a person’s insurance policies expire at different times. When completing the sale of an
automobile insurance policy, the intermediary should ask about the other policies. Intermediaries should
ask if they can contact their new client before their other policy expires.
Qualifying a client means
A. obtaining information for the purposes of completing an application for insurance.
B. submitting a proposal to an insurer requesting products and pricing based on a description of
the client’s exposures and coverage needs.
C. asking questions to determine if the prospect is a target client who has needs that can be met
with products and services offered.
D. making sure that the client can pay in full for the policy
Asking questions to determine if the prospect is a target client who has needs that can be
met with products and services offered.
Rationale: Meeting with a potential client is an opportunity for the agent or broker to establish that the
client is part of the market segment targeted as probable purchasers of the agency’s or brokerage’s
services. The best way to obtain information from prospects is to ask questions.
Which of the following would be an example of a pure risk?
A. An investor has purchased shares on the stock market.
B. A windstorm could destroy a homeowner’s gazebo.
C. A spectator at the football game bought a 50/50 ticket.
D. A homeowner is certain real estate is on the upswing.
A windstorm could destroy a homeowner’s gazebo.
Rationale: Pure risk is when there is a chance of loss, or no loss but no chance of gain. When insurance
professionals refer to “the risk,” they are talking about the chance of loss.
After qualifying and determining the prospect is a target client, the intermediary concludes that the
client should renew through the incumbent insurer. What action can the prospect take?
A. Sign a letter of authorization appointing the intermediary as broker.
B. Transfers between brokers are not permitted.
C. Call the insurance company and ask to transfer the policy.
D. Register a complaint against other broker with the insurance council.
Sign a letter of authorization appointing the intermediary as broker.
Rationale: If both client and intermediary wish to conduct business together, the intermediary may
suggest that the policy be transferred to his or her office for service by a letter of authorization.
Insurance policies can provide coverage for both direct and indirect losses. Which of the following is not an example of an indirect loss?
A. A vehicle was damaged in an accident and now the client has to pay for a taxi to get her to work.
B. A house was damaged in a fire and the owner has to stay in a hotel until the repairs are completed.
C. A neighbour’s garden shed was destroyed when a tree from the insured’s property fell on it.
D. A storm knocked out the power and all food in the freezer thawed out.
A neighbour’s garden shed was destroyed when a tree from the insured’s property fell on it.
Rationale: Pure risk is when there is a chance of loss, or no loss but no chance of gain.
A seasonal homeowners insurance policy declaration page includes coverage for burglary on the policy. Which of the following losses would be covered within the definition of burglary?
A. An expensive purse with prescription sunglasses was stolen from the patio table on the back deck.
B. Three cases of wine went missing from the back of the van while the driver was unloading the groceries.
C. While the homeowners were golfing, someone cut a padlock off the shed and stole all the gardening tools.
D. The homeowner forgot her engagement ring by the washroom sink; when she returned to look for it, it was gone.
While the homeowners were golfing, someone cut a padlock off the shed and stole all the gardening tools.
Rationale: An insurance policy that covers burglary only will not cover a loss where the door has been left unlocked. It only responds where there is physical evidence of forcible entry or exit of the premises.
When a prospect expresses the opinion that insurance companies just take in money and never pay claims, how should a professional intermediary respond?
A. Agree with the client to avoid confrontation because the agency could lose the account.
B. Confirm that the insurance company the prospect has dealt with in the past may do that but the one the intermediary sells for does not.
C. Decline to assist the prospect because the intermediary suspects that he will be a difficult
client.
D. Counter with examples of the types of claims that have been paid by the company.
Answer: B. Confirm that the insurance company the prospect has dealt with in the past may do that but
the one the intermediary sells for does not.
Rationale: The client may believe a claim was not settled equitably, or that a claim should not have been
denied. Probing for details helps to reveal whether the client’s annoyance or uneasiness is justified or if
this is a difficult client.
