A "demands and needs" letter or statement is a document commonly used in the insurance industry.

Its primary purpose is to clarify the specific requirements and priorities of a customer when seeking to purchase an insurance product. This ensures that the product provided aligns with the customer's unique circumstances.

Breaking down the terms:

  1. Demands: This refers to the precise requirements and features that the customer desires in an insurance product. For instance, a customer might 'demand' an income protection policy that offers coverage in the event they become unable to work due to a prolonged illness or disability.
  2. Needs: This captures the broader reasoning behind why a specific feature or coverage is essential for the customer. In the context of the income protection policy, the need might be the customer's responsibility as the primary breadwinner in the household. They would require the insurance policy to ensure their family's financial stability if they were unable to earn an income.

The "demands and needs" statement stands as evidence that the broker has considered the unique circumstances of the customer. In the case of income protection, this could involve assessing the customer's job risks, family obligations, and financial commitments. By doing so, the broker ensures they are offering a policy tailored to the customer's actual needs, demonstrating due diligence and commitment to the client's best interests.

As with all insurance policies, conditions and exclusions will apply

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