In: Operations Management
Selling expensive insurance policies
Ahmad works for a life insurance company as a sales representative. He has been working in that company for more than five years. He has got good communication and presentation skills. He has attended several workshops on sales and marketing to enhance his skills. The company is happy with his performance and gives good salary and commission on the policies he sells.
Ahmad has several plans to sell. One of the insurance products is a plan that is a combination of savings and insurance both. Ahmad is convinced and focused more to sell that plan because company also appreciates and encourages more to its sales representatives by giving handsome commission on its sales. The product promises to protect the family in case of premature death as well as a good return on investment after retirement.
The language used in the agreement paper is hard to understand. Usually, clients do trust on Ahmad and do not read the agreement thoroughly. Ahmad knows the facts very well. The product is expensive and provides a little protection in case of premature death. Another disadvantage of having that product is a low return on investment after its maturity. The company pushes its sales because it is more profitable. Ahmad has other cheaper products to sell that can give more benefits to his clients including greater protection and return but the commission on sales by the company is too low.
Ahmad cannot earn more if he sells products considering consumers’ benefits. His family will suffer if he thinks good for others and the management frowns on cheaper policies being sold.
Questions:
1. The main stakeholders in the case are Ahmad, his family, the company and the customers. These people are directly or indirectly affected and connected by this case.
2. This is not ethical for insurance companies to promote expensive policies hiding the facts because the customers would suffer and that hiding the facts are not good as it will in future affect the brand of the company that people will not trust the company once they get to know that company involves in such kind of practice.
3. No, Ahmad cannot justify himself by saying that hiding the facts doesn’t mean lying as hiding the facts from the customers that trust him is more like breach of trust and that Ahmad will lose all his goodwill once customer who trust him will get to know of such practice.
4. The recommendation for Ahmad is to let customer be aware of all the facts related to the policies and then he may convince them to buy it. If the customer stills decides to go for it than be it otherwise Ahmad shall insist on better plans for customer.