The Role of Customer Service for Business

1.4.2. Customer care purposes

The purpose of customer care is to satisfy existing customers by serving them in the way they want, creating a long-term, close relationship and demonstrating the company's professionalism. The company performs customer care to satisfy customers' needs, benefits when using the product, in terms of price, product quality or enjoying accompanying services when using the product... Satisfaction with the product will greatly affect the decision about future purchasing behavior.

Customers today are demanding people, want to be treated politely, respected and heard sincere thanks. What customers need to ask when buying products and services is the quality of service. Therefore, a customer care system based on modern technology equipment, following a dedicated, professional process is becoming increasingly important and necessary for businesses.

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Competition on price and quality is gradually giving way to competition and customer service. Businesses need to do a good job of customer care to have more loyal and stable customers.

1.4.3. The role of customer care for businesses

Customer service plays a very important role in determining the existence and development of each business. The famous capitalist economist Adam Smith said: "Customer service is the bridge between producers and consumers". We are living in a competitive free market economy, without the protection and subsidies of the subsidy period. In order to survive and develop, each business must set out its own development plan and strategy. In its development strategy, every business needs to put marketing first and customer service is always considered the most important issue in this work.

Customer care helps attract potential customers. Studies show that: a satisfied customer will tell four others, one satisfied customer will tell

A dissatisfied customer will tell ten or more people because people tend to “complain” more than praise. Either way, the impact of word of mouth is huge and will help determine the number of customers a business will have in the future.

Customer care helps businesses maintain existing customers and create loyal customers. A repeat customer brings in much more profit to a business than a new customer. Customer care is like an invisible string that binds and retains customers, helping businesses build a large number of loyal customers.

Customer care helps businesses reduce costs, there are many significant expenses that will be reduced if businesses do a good job of customer care. First of all, the cost of finding new customers, besides that, businesses also avoid the cost of handling and overcoming the consequences caused by dissatisfied customers, sometimes these costs are not really foreseen.

Customer care activities play an extremely important role in the sales activities of a company, because it has the ability to greatly influence the sales of the company. By implementing thoughtful customer care activities and being able to meet the requirements and wishes of customers, the company can have a good image in the hearts of customers, thereby tightening the relationship between customers and the company, making customers attached to the company, trusting the company's products and becoming loyal customers who always trust and use the company's products.

In addition, customers are increasingly choosing services and goods carefully and wisely. Products in the same segment often have no difference in quality. However, sometimes, customers leave the business forever because of mistakes in the attitude and behavior of customer service staff, while these mistakes can be fixed. Therefore, it can be said that customer service is the backbone of any business, it is the "magic wand" that helps strengthen the foundation and bring benefits and success to the business.

1.4.4. Quality of personal customer care service of insurance

The quality of customer service of an insurance company plays a very important role in gaining trust from customers.

The product of life insurance is intangible, when participating in insurance, customers will receive a commitment from the insurance company for a certain period of time and put their trust in that commitment. Without regular care and communication, customers will gradually feel forgotten and lead to a loss of trust in the long run.

For the commercial insurance industry, insurance companies must promote regular visits, encouragement and customer care, not waiting until the policy expires or the customer encounters a risk to resolve benefits. This way, customers will always feel secure and satisfied, as the meaning of insurance brings.

The quality of customer service also depends on the staff and agents. This team is the one who represents the business to the customers. The job of this team is to advise customers on the most suitable insurance products, and to provide regular care and support from customers to maturity or when customers are unfortunately at risk.

With the network coverage system also affects the quality of care.

customers in a timely manner, will bring customers good experiences and satisfaction.

Any insurance company that provides adequate and good quality customer service will see an increase in the number of customers participating in insurance. At the same time, thanks to the prospect of economic development and the increased awareness of people about insurance, the development potential of life insurance in Vietnam is very high. Insurance companies need to continue to improve and diversify their products, improve the quality of customer care, and specialize in the procedures for resolving customer benefits.

1.5. Overview of Life Insurance

1.5.1. The process of formation and development of Life Insurance

The need for safety is eternal. People always seek ways to protect themselves and their property from the misfortunes of risks. When the law was born, stipulating that the person at fault must be obliged to compensate for the damage caused by his own fault, liability insurance was born and developed. Among the measures that people have taken to handle risks, insurance is considered the most optimal measure. The need for insurance originated.

1.5.2. Concept of Life Insurance

Life insurance is a commitment between an insurance company and an insured person in which the insurance company is responsible for paying the insurance amount (insurance amount) to the insured person when the insured person has predetermined events (such as: death, total permanent disability, contract expiration, living to a certain period of time). The insured person is responsible for paying the insurance premium in full and on time.

Thus, life insurance is understood as a guarantee of "a form of savings" and is mutual in nature. Each person who buys a life insurance contract (usually called the insured) will periodically pay small amounts of money (called insurance premiums) over a long period of time agreed upon in advance (called the insurance term) into a large fund managed by the insurance company, and the insurance company is responsible for paying a large predetermined amount of money (called the insurance amount) to the insured when the insured reaches a certain age, at the end of the insurance term or when an event occurs (the insured gets married or goes to college or retires...) or to the relatives and family of the insured if unfortunately they die earlier.

Life insurance is considered a form of long-term savings but is not completely identical. In terms of research, we need to clearly distinguish between these two forms because they are very practical and close to our lives. In fact, life insurance, in terms of positive aspects, has similarities and differences compared to savings.

1.5.3. Characteristics of Life Insurance:

To understand the characteristics of life insurance, it is necessary to consider two aspects: the characteristics of life insurance and the characteristics of life insurance products.

Life insurance features:

Most forms of life insurance, except term insurance, are usually a combination of insurance and savings, with or without dividends. The indication of the insurance benefits of life insurance forms that combine insurance and savings is inevitable because in life insurance, insurance is provided for two opposite events: life or death.

Life insurance is a form of long-term insurance. Unlike non-life insurance, the insurance period is usually 1 year or less, the insurance period of life insurance is often long, possibly decades. This makes management in the life insurance business complicated and difficult.

Calculating life insurance premiums is very complicated. Since most life insurance products are long-term insurance, when setting insurance premiums, businesses must accurately calculate technical interest rates, mortality rates, and consider economic factors such as inflation, recession, etc. to ensure the attractiveness of the product as well as business stability.

Characteristics of life insurance products: Life insurance products are extremely diverse and rich, each type of product has its own characteristics but at the same time there are common characteristics that are quite clearly shown:

In the same product, it is possible to insure two opposite events, which are life and death. Unlike non-life insurance products, which only insure against risks, in life insurance, the insured event can be a risk or an event related to the life of the insured. In particular, insurance contracts are often signed to insure two opposite events, which are life or death of the insured.

Most life insurance products are multi-purpose, serving

many different needs of the insured. The insured can use life insurance to serve the financial plan of his family such as establishing an education fund for his children, covering final expenses, creating an investment fund in the future, or can also participate in life insurance to reduce the burden on children, support additional social welfare benefits, etc.

In addition to its own specific characteristics, life insurance products also have all the characteristics of general insurance products.

Life insurance products are easy to imitate and have no exclusive protection. This means that insurance companies' products are often similar. This characteristic puts pressure on insurance companies to improve the quality of their services to create a difference and benefit the insured.

Life insurance products are intangible products. When buying goods, customers can feel the product through their senses and even test the durability or usability of the product. However, when buying life insurance products, buyers only receive a contract between two parties and cannot feel the value of the insurance product through their senses.

Life insurance products have variable efficiency. Due to the long life cycle and the risk involved, it is difficult for insurance companies to accurately determine the business efficiency at the time of product sale. Similarly, customers participating in insurance often do not receive benefits immediately upon purchase of the product, but depend on the time of the insurance event and the terms and conditions of the contract. Especially with life insurance products, participants can receive additional profits from the business results of the insurance company.

1.5.4. Types of Life Insurance

In reality today, there are 3 basic types of life insurance:

- Insurance in case of death

- Insurance in case of survival

- Mixed life insurance

In addition, additional terms are also applied to different types of contracts.

Basic life insurance such as:

- Accident insurance

- Health insurance

- Insurance does not pay premiums when injured

- Insurance for premium payers......

In fact, additional terms are not life insurance, because they do not depend on human life, life and longevity, but are insurance for other risks related to humans. But sometimes insurance participants still find it necessary to participate to supplement the basic contracts.

1.5.4.1. Life insurance in case of death

This is the most common type of life insurance and is divided into two groups.

+ Term insurance.

Insurance is signed for death occurring within the specified period of the contract. If death does not occur within that period, the insured person will not receive any fee from the premium paid. Conversely, if death occurs during the effective period of the contract, the insured person must be responsible for paying the insurance amount to the designated beneficiary.

Characteristic:

- Fixed warranty period

- Temporary responsibilities and benefits

- Low insurance premiums because there is no need to set up a savings fund for the insured person.

Purpose:

- Guarantee for funeral and burial costs

- Sponsorship for family and relatives for a short period of time

- Payment of debts on loans or mortgages of the insured person

Term insurance is also diversified into the following types:

Fixed Term Life Insurance: The premium and the sum insured do not change throughout the term of the contract. The premium is the lowest and the insurer does not pay when the contract expires. The contract expires if the premium is not paid after the contract renewal date. This type is mainly used to pay off outstanding debts in the event of the death of the insured.

Renewable Term Insurance: This type of insurance can be renewed at the end of the contract and does not require any further evidence of the insured's health, but there is an age limit (usually the maximum age is 60 years old). At the time of renewal, the insurance premium increases as the insured's age increases.

Convertible Term Life Insurance: This is a type of fixed term life insurance that allows the insured to choose to convert part or all of the current contract into a whole life or mixed life insurance contract at some point while the contract is still in effect. The premium is calculated based on the whole life or mixed life insurance.

Decreasing term life insurance: This is a type of insurance in which a portion of the insurance amount decreases annually at a specified rate. This portion decreases to zero at the end of the contract term. The characteristics of this type are:

- Insurance premium remains at a fixed level

- Lower premium than fixed term life insurance

- The payment period is shorter than the entire contract period to avoid late payment.

paid at the end of the contract term when the insurance amount is still very small.

Increasing term life insurance: this type is issued to help participants

can prevent inflation of money. That means the actual insurance amount