Question

ohn Mulvaney just reached an important milestone in his life-birth of his first child. After seven years as a DINK (dual income-no kids) family, he and his wife Sandy decided it was time add a new member. At that point the couple had solid health insurance plans and policies protecting their home and automobiles. Life insurance was another matter As a novice, John had no idea about the types of poli- cies that were available. He contacted his insurance agent, who represents a variety of insurance companies, and asked for a summary. The agent mentioned three potential forms of life insurance, each offered by a separate company that specialized in a specific type Company A's primary product, term life insurance, has the advantage of being the lowest annual cost option. John would be able to specify the policy's death benefit amount, which typically would be enough to care for his spouse and child (and vice versa for Sandy) for an extended period of time. A term policy covers a stated period of time (often 10 years) and then expires. All premi ums go to the insurance company. The low cost often means a higher death benefit can be purchased at a lower price, especiall for a healthy younger person. When a term policy is renewed, the premium amount rises for the same amount of coverage because the person is now older and has a higher potential of dying. At the same time, the individual's level of income may have also risen making the renewal price easier to manage. Company B's best policy, whole life insurance, features much higher fixed annual premiums, but works in a different manner A cash value accrues as payments are made, and the value of the policy (a type of regular savings) grows over time, often collecting interest on the cash value. The policy also specifies a death benefit. At the end of the policy's specified time (often 40 years or more), the death benefit amount can continue to grow until the policy is redeemed. Many financial analysts argue that the higher costs and low rate of return (the interest rate paid on the case value) make whole life insurance a less viable investment. Others suggest it is a form of "forced" savings that benefits the policy holder over time. The amount of coverage (death benefit) remains the same over the life of the policy. For more coverage, a second policy or a term policy would need to be purchased Company C specializes in universal life insurance, which is a flexible form of permanent life insurance. It features the low cost of term life insurance combined with a savings element which is invested to provide a cash value buildup. John and Sandy would be able to review and change their death benefit amounts, the savings element, and their premiums over time. Also, universal life insurance allows the policyholder to use the interest from his or her accumulated savings to help pay premiums

What types Of marketing messages should each of the three life insurance companies design to reach consurners such as John and Sandy. for either the information search. evaluation of alternatives. or both Stages Of the buying decision marking process?

Answer 1

After a period of 7 years as DINK John and Sandy having their Child must take a life insurance on the special milestone they achieved. Its really a tough descision to buy a policy out of available three specilized policies presented by the agent of three different companies A, B & C.

At this point of time when they had their first child both John and Sandy are not at so risk of dying as mentioned they are healthy and young. But still for the sake and minimizing the risk factor for their spouse and child they need to chose such a policy which provides the scope of savings, and it can be changed with the saving amounts and death benefits over the period of time as per the earning situations in future and health conditions.

John and Sandy should analyse the reputation of all three companies as the life ensurance is for longer period of time, Its returning processes after the death of the premium paying person, Its average period of time for settelment of a claim and its existance with legal comply point of view.

With details provided in all above three insurance plans by dstinct companies- A provides the term life insurance with lowest annual cost of premium but expires in defined time and the premium amount remains with company only- no any other benefit in case the insurer is live.

B- provides with higher annual premiums but with very low interests on saving amount. Its just with a death benefit and saving with very low interest, It seems as the forced saving .

Compairing all these policies anf if the reputation of company C is compairable the couple should select the policy provided by C- which is both the combination of Saving and death benefit with variable option of premium over the period of time. John and Sandy can change the amount of both the benefits overt the time as per their income and health situations at point of time which can fulfill their future needs. Also it provide flexibility to have the interest amount for paying the upcoming premiums.