Business owners and entrepreneurs often face various challenges in managing financial and asset protection risks, such as income uncertainty, lack of budget for insurance protection and inadequate understanding of long-term financial risks. As a result, they may make mistakes in their financial planning.
Understanding the challenges entrepreneurs face in financial planning
Entrepreneurs often face several major obstacles when deciding to buy insurance or plan their finances, according to Olivia Pawaka, an 11-year MDRT member. Some of these include an aversion to long-term financial commitments, a lack of understanding about the benefits of insurance and the presence of other business priorities they consider more urgent.
“They tend to view insurance as a burden rather than an investment. They end up not having adequate life or health coverage, as well as not having a sufficient financial backup strategy,” Pawaka said.
Offering the right solutions for the right challenges
In recommending the right insurance products, Pawaka employs a needs-based approach by analyzing the business and personal risk profiles of her clients. One strategy she implements is adjusting premiums according to the business cycle of entrepreneurs. It offers flexibility in premium payments to make them more affordable.
She also implements an ROI-based approach to show that insurance is not a burden, but rather a profitable asset for businesses.
“I offer premiums that can be adjusted to income, as well as a phased planning strategy so that they can start with basic protection before increasing their policy coverage,”Pawaka said. She also recommends products that function as investments too, so that clients can receive double benefits.
Success stories
For a client with a retail business, Pawaka advised the client to have life insurance so that their family could receive an inheritance if something happened to them. She also recommended business insurance to protect the company’s assets so that it could continue to run without financial problems.
Another success story is when she helped a client protect their business and family with the right financial strategy. The client, who runs a manufacturing business, nearly lost their company due to a serious illness that prevented them from working. However, thanks to the health and life insurance she recommended, the client received insurance proceeds to cover medical expenses and keep the business afloat.
Managing long-term relationships with clients
Pawaka realizes that trust is key in this profession. Her role is beyond selling insurance products; as an advisor, she also provides objective education to her clients. By presenting data-driven solutions and real case studies, Pawaka helps entrepreneurs understand risks more clearly.
There are many ways to build long-term relationships with clients. “Be an advisor, not just a salesperson, by providing objective information. Offer solutions based on data and real case studies,” Pawaka said.
Akbar Maulana and Cindy Audilla write for Team Lewis, a communications agency assisting MDRT with content development for Asia-Pacific markets. This article is an excerpt that first appeared in Bahasa Indonesia.
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