Proposals for Insurance: What, Why, and How

Nicholas Ayers
Nicholas Ayers

Co-Founder @ Better Agency

Whether you are gathering information from a new client with an insurance proposal form or creating an insurance business proposal with a customized policy for a new client, it is important to understand the basic information that must be included to provide the underwriters with the information they need as well as to determine the insurance coverage that your client actually needs.

What is an insurance proposal?

An insurance proposal is a legal document that provides the details of your client and what is being insured. The idea behind the proposal is to create a clear picture for the insurance company. This is then used to ascertain the insurability of an individual or company by the underwriters and ultimately determines whether the company will accept or reject an insurance policy.

Insurance proposal vs insurance policy

What is the difference between an insurance proposal and an insurance policy? An insurance proposal is a document that provides critical personal information on the potential client so that the insurance underwriters can best provide the necessary coverage. An insurance policy is an actual contract that details the insurance coverage and the agreement between the insured and the insurer.

Importance of an insurance proposal

The insurance proposal form helps insurance companies determine if a potential client is worth the risk or not. As an insurance agent, the information provided to you from an insurance proposal form can help you determine what coverage or benefits your new client may need. In addition, the information provided by clients in this form helps insurance underwriters determine the degree of risk they may bear by issuing insurance benefits.

Female agent writing on a paper document

What is in the insurance proposal?

As an insurance agent, you will provide your potential clients with an insurance proposal form in order to gain information. An insurance proposal form requires many different details, including:

  • Name: This is the name of the potential policyholder
  • Address: This is the address of the policyholder
  • Occupation: This is important information as it can affect the premium rate and the decision of the underwriter
  • Subject matter: This refers to the life or property that the insurance is covering. For example, auto insurance would include information about the vehicle. For a life insurance policy, this would be for the life being insured.
  • Sum insured: This is the amount of coverage required
  • Claims history: This is a detailed history of any previous insurance claims
  • Other policies: This asks about other current insurance policies in place
  • Declinature: Has the proposer had any insurance previously declined by an insurance company?
  • Declaration: Every proposal form must include a declaration that contains a written statement that states that the answers provided are true and not a misrepresentation and that the proposal form shall provide a basis for an insurance contract.
  • Signature: A place for the proposer to sign
  • Date: A date when the signature was signed

How to write an insurance proposal?

In many cases, potential clients are looking for customized insurance packages designed to meet their specific needs. After talking with these clients, you begin to understand their specific needs. In this case, as an insurance agent, you may want to create a tailored insurance business proposal where you describe their needs, how you can meet those needs, and why your insurance is their best option. But how do you write a proposal for your client? Here we take a look at the necessary steps. Better Agency offers a 5-star rated insurance proposal software.

1. Research potential clients and obtain the necessary information.

In order to understand the needs of a potential client, you need to research and better understand who your client is, what they need in terms of insurance, and how you can meet those needs. You can do this through general conversations, either on the phone or in person. In order to best understand their needs, put yourself in their position. What are their concerns and how can different insurance policies meet or exceed those concerns?

2. Write the proposal.

Once you have a clear picture of your client’s needs, you are ready to create the proposal. You can choose to create the proposal from scratch or follow a template from your CRM. In general, your proposal should include:

  • Introduction: This can include a cover letter where you introduce yourself, explain why you have created this proposal, and provide all your contact information. Other pages you might include in the introduction may be a title page and a client summary.
  • Description of need: Here you will show just how well you understand your potential client and their needs. This section can include pages such as a needs analysis, client background, requirements, considerations, and risk assessments.
  • How to meet needs: The next section covers how you intend to meet the needs of your client. This can include pages that cover recommendations, options, policies, premiums, contract and terms, exclusions, and comparisons.
  • Company history: In the final section, you are showing how your company is best able to meet the needs of your client. Here you can include pages on company history, an about us page, and client testimonials.
  • Call to action: The final page of your proposal should provide a call to action, where you outline the next steps, such as signing a contract.

3. Make your proposal visually appealing.

After you have all the content created for your proposal, the next step is to make it visually appealing to your potential client. Consider adding your company logo to each page and incorporate colors and fonts that match your business profile.

4. Edit document and proofread.

Before you deliver your proposal to your potential client, you want to make sure to check every page for spelling and grammar. Make any necessary changes as needed.

Quality insurance proposals for business success

Whether you are providing potential clients with proposal forms to fill out or writing a proposal for a client, the forms and documents you use are representative of your business and you want to ensure that they are clear, precise, and visually appealing. Our quality, insurance industry-specific management software tools can offer a wide range of proposal templates that can help you create the perfect forms and proposals in less time.

At Better Agency, we understand the unique needs insurance agents face when it comes to customer and lead management, automation, and potential forms necessary to make your business a success. As former insurance agents, we created Better Agency CRM to directly meet your unique needs. To learn more about how we can help, schedule a Discovery Call today.

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Better Agency team

Are you tired of spreadsheets and leads falling through the cracks? Are you looking for an efficient way to manage your customers and automate various tasks? Have you tried numerous CRM solutions only to find that they don’t quite fit with the insurance industry?

At Better Agency™, we understand your concerns and, as former insurance agents, we created a sales-driven AMS, powerful CRM, easy comparative rater, and fast proposals together in one system. Our insurance management software does it all! We understand what insurance agents need for success and have created a powerful tool that helps you better reach your business goals.

Schedule a discovery call with the team today and let us help you better manage your agency.

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