Jacob in Big Dilemma Jacob is currently working with a life insurance company as a senior sales executive (Insurance Age
Posted: Wed May 04, 2022 8:11 am
Jacob in Big Dilemma
Jacob is currently working with a life insurance company as a
senior sales executive (Insurance Agent). He has been working
in that company for more than five years and had earlier worked
with another insurance from three years. With his eight years of
experience in the insurance sector, he has gained an excellent
understanding of insurance products. In addition, 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 Jacob's performance and gives him a good salary
besides a handsome commission on his sales policies. Jacob hails
from a low-income family; his father is a support staff in a
private company. He has two sisters. The eldest has graduated last
year, and his father is looking for a suitable bridegroom for her,
for which he expects adequate financial support from Jacob. Knowing
this, Jacob desperately works hard to maximize his commission every
month, which he keeps aside for her sister's marriage. Jacob has in
his current job several plans to sell. One of the recently launched
insurance products is a plan that is a combination of savings and
insurance. Jacob has been asked to focus more on selling that plan
because the plan is more profitable to the company than other
plans. The company is encouraging the sales executives by giving
handsome commissions on its sales. The product promises to protect
the family in case of premature death as well as a good return on
an investment after retirement. However, a few days after the
launch of the new plan, Jacob, after carefully going through the
language used in the agreement document of the plan, found that the
language was very ambiguous and hard to understand. He could also
figure out that language seemed to have been purposefully put in
such a manner by the company that it will almost be impossible for
the nominee of the insurance policyholder to claim the death
benefit in case of death of the insurance policyholder during the
operating period of the policy. Usually, clients do trust sales
executives and do not read the agreement thoroughly. The company
knows the facts very well. Jacob could figure out that the
product is actually expensive for the target clients and provides
little protection in case of premature death that too it would be
difficult to claim the promised benefit by the family of the
insured person. Another disadvantage of having that product is a
low return on an investment after its maturity. Jacob could realize
that the company has concealed several facts in the promotional
leaflet and the description of the product features with a motive
to earn high profit. Even in the briefing about the product
features to sales representatives, the company did not disclose
several facts that are not beneficial to the plan
buyers. The company started pushing the sales of
this plan as it is more profitable for the company. The company
restructured the sales by assigning very high commissions and
proportionately reduced commissions for most of the other products.
Jacob’s boss, Sundaram, started putting pressure on Jacob to sell
more of this newly launched 'combination of savings and insurance'
policy than the other plans. Jacob has other cheaper products to
sell that can give his clients more benefits, including greater
protection and return, but the commissions on sales of those
products have been reduced radically. Further, 70% of his annual
bonus now is linked to the selling of the new plan of the
combination of savings and insurance policy. Jacob cannot earn
commission as he earned earlier if he sells products considering
only the consumers' benefits. Moreover, his family would suffer,
including his sister's marriage, if he thinks good for clients.
When enquired with his boss about deceiving potential customers by
pushing the sale of the newly launched product, his boss gave him a
curt answer. "You should not try to teach the company what is right
or wrong and concreate in selling the new product, or else your job
will be at stake". Jabob is in a big
dilemma about what he should do. He knows very well that he would
be deceiving his customer if he sell the new product. On the other
hand, if he continues to sell the old products, his earnings would
not only reduce drastically, he may even lose his job. The job
market is down; most insurance companies are downsizing their
employee strength. It will be impossible to get another job
immediately. His father is looking up to him for financial support
to run the family. The marriage of his eldest sister also depends
on his earnings
Questions:
Is there anything wrong with the business practice of maximizing
profit by selling and promoting the company's newly launched plan?
If yes, why? and if not, why not?
What options does Jacob have and what are the pros and cons of
such options? What will be your recommendation to Jacob? Justify
your answer by liking it to the theories of Values and Ethics and
the concept of the situation versus character
What the base of power Sundaram, Jacob’s boss tried to use to
influence his concentrate in selling the new product?
Jacob is currently working with a life insurance company as a
senior sales executive (Insurance Agent). He has been working
in that company for more than five years and had earlier worked
with another insurance from three years. With his eight years of
experience in the insurance sector, he has gained an excellent
understanding of insurance products. In addition, 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 Jacob's performance and gives him a good salary
besides a handsome commission on his sales policies. Jacob hails
from a low-income family; his father is a support staff in a
private company. He has two sisters. The eldest has graduated last
year, and his father is looking for a suitable bridegroom for her,
for which he expects adequate financial support from Jacob. Knowing
this, Jacob desperately works hard to maximize his commission every
month, which he keeps aside for her sister's marriage. Jacob has in
his current job several plans to sell. One of the recently launched
insurance products is a plan that is a combination of savings and
insurance. Jacob has been asked to focus more on selling that plan
because the plan is more profitable to the company than other
plans. The company is encouraging the sales executives by giving
handsome commissions on its sales. The product promises to protect
the family in case of premature death as well as a good return on
an investment after retirement. However, a few days after the
launch of the new plan, Jacob, after carefully going through the
language used in the agreement document of the plan, found that the
language was very ambiguous and hard to understand. He could also
figure out that language seemed to have been purposefully put in
such a manner by the company that it will almost be impossible for
the nominee of the insurance policyholder to claim the death
benefit in case of death of the insurance policyholder during the
operating period of the policy. Usually, clients do trust sales
executives and do not read the agreement thoroughly. The company
knows the facts very well. Jacob could figure out that the
product is actually expensive for the target clients and provides
little protection in case of premature death that too it would be
difficult to claim the promised benefit by the family of the
insured person. Another disadvantage of having that product is a
low return on an investment after its maturity. Jacob could realize
that the company has concealed several facts in the promotional
leaflet and the description of the product features with a motive
to earn high profit. Even in the briefing about the product
features to sales representatives, the company did not disclose
several facts that are not beneficial to the plan
buyers. The company started pushing the sales of
this plan as it is more profitable for the company. The company
restructured the sales by assigning very high commissions and
proportionately reduced commissions for most of the other products.
Jacob’s boss, Sundaram, started putting pressure on Jacob to sell
more of this newly launched 'combination of savings and insurance'
policy than the other plans. Jacob has other cheaper products to
sell that can give his clients more benefits, including greater
protection and return, but the commissions on sales of those
products have been reduced radically. Further, 70% of his annual
bonus now is linked to the selling of the new plan of the
combination of savings and insurance policy. Jacob cannot earn
commission as he earned earlier if he sells products considering
only the consumers' benefits. Moreover, his family would suffer,
including his sister's marriage, if he thinks good for clients.
When enquired with his boss about deceiving potential customers by
pushing the sale of the newly launched product, his boss gave him a
curt answer. "You should not try to teach the company what is right
or wrong and concreate in selling the new product, or else your job
will be at stake". Jabob is in a big
dilemma about what he should do. He knows very well that he would
be deceiving his customer if he sell the new product. On the other
hand, if he continues to sell the old products, his earnings would
not only reduce drastically, he may even lose his job. The job
market is down; most insurance companies are downsizing their
employee strength. It will be impossible to get another job
immediately. His father is looking up to him for financial support
to run the family. The marriage of his eldest sister also depends
on his earnings
Questions:
Is there anything wrong with the business practice of maximizing
profit by selling and promoting the company's newly launched plan?
If yes, why? and if not, why not?
What options does Jacob have and what are the pros and cons of
such options? What will be your recommendation to Jacob? Justify
your answer by liking it to the theories of Values and Ethics and
the concept of the situation versus character
What the base of power Sundaram, Jacob’s boss tried to use to
influence his concentrate in selling the new product?