Everything You Need To Know About Insurance Proposals

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Did you know that as an insurance agent, you are responsible for writing proposals? Most people don’t realize this, but it’s a very important part of the job.

In fact, a well-written proposal can mean the difference between getting and losing a sale. It showcases your understanding of the client’s needs and helps you explain why your product is the perfect fit. At the end of reading your insurance proposal, your client should feel confident that they’ve made the right decision.

To help you succeed, let’s take a closer look at what insurance proposals are, their importance, and how to write them.

What Are Insurance Proposals?

A proposal is a document, usually in the form of a letter or memorandum, that outlines in detail the terms and conditions of a proposed insurance policy. It is presented to potential clients so they can make an informed decision before purchasing a policy.

It includes specific information such as:

  • The type of insurance is offered
  • The policy premiums and terms
  • Any exclusions or limitations that apply
  • The company’s risk management objectives
  • Any additional information the customer may require

Insurance Proposal vs Insurance Policy

While “proposal” and “policy” are often used interchangeably, there is an important distinction between the two. A proposal is just that – a written offer to provide insurance coverage. It does not become an official policy until the customer accepts it and pays the premium.

You can think of a proposal as simply the first step in the policy process. Once accepted, it serves as a contract between the insurer and the insured that governs how the policy works.

The Importance Of Insurance Proposals

Insurance proposals are incredibly important for both agents and customers alike. For agents, a well-written proposal not only closes sales but also builds trust between the agent and the customer. It demonstrates the agent’s knowledge of their product and commitment to providing the best coverage.

For customers, a proposal is essential for understanding exactly what type of coverage they are getting, as well as the cost associated with it. It also ensures that customers know what is and isn’t covered by their policy, so they are not surprised when a claim arises. Once you and your potential client have discussed the policy, a proposal is what seals the deal and the customer onboarding process is much easier.


What Can Be the Bottom Line Impact of Adopting an Insurance Proposal in the Sales Process?

The bottom line impact of properly adopting an insurance proposal in the sales process is undeniable. Having a well-written proposal that clearly outlines the terms of coverage and the associated cost can make or break a sale.

Not only will customers be more likely to purchase the policy if they understand exactly what they are getting, but the agent is more likely to close more sales since they have done their due diligence in informing the customer.


How To Write an Insurance Proposal

Writing a proposal is not as daunting as it may seem. There are a few key steps agents can take to ensure their proposals are effective.

First, agents should research the customer’s needs and tailor their proposal accordingly. They should also be clear about the types of coverage being offered and any exclusions or limitations that apply.

Next, agents should include an Estimated Value Analysis to show the customer how their policy compares to competitors. This shows the customer that they are getting great value for their money and can help close the sale.

Finally, agents should use a professional format and proofread the proposal for any errors. This will give customers confidence in the agent’s professionalism and help further close the sale.


Insurance Proposal Template

Creating an effective insurance proposal is made easier with a template. A template outlines the different components to include in the proposal and makes it easier especially for independent insurance agents to organize their thoughts.

The best insurance proposal templates will include sections for:


Executive Summary

The executive summary allows you to start the proposal strong by exhibiting your expertise by offering solutions for meeting and managing your client’s goals or desires. Here, you can also offer information on your insurance agency and its credentials to give your customer the peace of mind they need.

(Client) requires qualifying insurance policies including:

  • Auto Insurance
  • Home Insurance
  • Worker’s Compensation

Our mission is to provide the best possible insurance solutions so (Client) can attain the following goals:

  • Complete coverage
  • Lower annual premium premium
  • High customer satisfaction


Provider Background

This section should provide the customer with information about your company, its history, its personnel, and previous success stories. This is important for giving customers an understanding of who they are dealing with and can help build trust.



Here, you’ll provide the location and vehicle schedules for the insured parties. It offers information on the exact types and amounts of coverage being provided by the policy.


Deductibles & Surcharges

This section will detail any deductibles or surcharges that may apply to the customer’s policy. This helps customers understand exactly what they are paying for and gives them an idea of how much money is at stake if a claim arises.


{Insurance Policy} Coverage

The property coverage section will expand on the coverage that the insured has available. It includes basic information such as the proposed policy term while also explaining the limits, deductibles, highlights, subjectivities, and limitations of the coverage.

You can modify this section to include different automobile insurance, worker’s compensation, and so on.

Premium Summary

This section outlines the cost of the policy and any discounts or special pricing that is being offered. This part should also include information about payment options and the rate of renewal.




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