You will be able to explain a product's key features, costs and risks so a client can repeat them back.
Six months after buying a policy, a client calls you. She has looked at her annual statement and wants to know why the cash value is lower than the total she has paid in. You explained the charges at the time. You remember doing it. She does not remember hearing it, and from her side of the table, that is the same as never being told.
The fourth fair dealing outcome says customers should receive clear, relevant and timely information so they can make informed decisions. Each of those three words is a separate test, and a meeting can pass one while failing the others.
Information is clear when the client can explain, in their own words, what they bought, what it costs them and how they get out of it. That is a higher bar than "I said it and it was accurate".
Think about how most product explanations go. The representative walks through a benefit illustration, points at a few numbers, uses terms like surrender value, rider and policy year, and asks whether there are any questions. The client, who has been nodding politely, says no. Everything said was true. Very little of it was clear.
Clear explanations use the client's language. Instead of "the policy has a surrender value", say "if you stop paying and cancel in the first few years, you get back less than you put in, and here is roughly how much less at year three". Instead of "this rider waives future premiums on total and permanent disability", say "if you become permanently unable to work, as the policy defines it, you stop paying and the cover carries on". Then point to where the policy defines those terms, because the definitions matter at claim time.
A typical product summary has many pages. A client cannot weigh all of it, and if you give every feature equal time, the two that matter most get lost among the twelve that do not.
Relevant information starts from the fact-find. If Hafiz and Nadia's main worry is keeping the flat if Hafiz dies or cannot work, then the features to lead with are the sum assured, what counts as a claimable event, the main exclusions and what happens if they miss premiums. The optional riders, the brand's history and the bonus projections come later, if at all.
Relevance also covers the bad news. The features that matter for their needs include the ones that could let them down: an exclusion that touches a health condition they mentioned, or a cost that rises at a certain age. Leaving those out because they spoil the story is not a relevance judgement. It is a disclosure failure.
Timely means the client has the documents early enough to read and think about them before deciding. A product summary handed over with the application form, signed on the same page, does not give anyone time to read it.
Where you can, send the key documents ahead of the recommendation meeting or leave them with the client between meetings. Tell them which pages matter most and what to look for. Some clients will not read anything, and that is their choice, but they should have had the chance. Your firm's process will set out which documents must be given and when, so follow it, and treat it as the minimum.
Timely applies after the sale too. If the insurer changes premium rates, or a fund in an investment-linked policy is closed, the client should hear it from you before they find it on a statement.
The most useful check on all three tests is also the simplest. Before the client decides, ask them to tell you in their own words what they are buying. Not "do you understand?", which almost everyone answers with yes, but an open request: "Just so I know I've explained it properly, could you tell me what this covers, what it costs you each year, and what happens if you stop paying?"
When Wei Ling tried this with Nadia, the answer was mostly right, with one gap: Nadia thought the policy would pay out if Hafiz was hospitalised. It would not. That was a hospitalisation question, covered by other plans, and Wei Ling had mentioned it once. She explained it again, and then wrote down Nadia's corrected summary in the meeting notes, in Nadia's words.
That note does two jobs. It shows the client understood, which a signature on a form cannot show. And it gives you the record you will need if, years later, the client says nobody told them.
Most representatives explain the same few products many times. A short, plain explanation of each one, written once and refined, is worth more than any number of brochures. It forces you to decide what the main benefit, cost and risk really are, and it gives you language you can use without thinking about it in the meeting.
The activity below asks you to write that for one product in under 100 words. Write it as you would say it to a client across the table, and then read it aloud to someone outside the industry to see whether they could say it back.
Write a plain-language explanation of one product's main benefit, main cost and main risk in under 100 words.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).