According to the GHM Theory,the choice between an in-house sales force versus independent agents should turn on the relative importance of investments in developing persistent clients by the agent versus list-building activities by the insurance firm.What would GHM thus predict about the sales of whole life versus term life insurance?
A)Both would be sold by the insurance company's in-house sales force
B)Whole life would be sold by the insurance company's in-house sales force;term by an independent agent
C)Whole life would be sold by an independent agent;term by the insurance company's in-house sales force
D)Both would be sold by an independent agent
E)An insurance company would try to "buy" the business (whole and term life insurance)of its independent agents

Question

Quizplus · Accepted Answer

GHM Theory suggests that when the sales process requires significant investment in developing persistent clients, an in-house sales force is preferred due to better alignment of incentives and control. Whole life insurance, which involves long-term relationships and complex products, fits this criterion. Term life insurance, being simpler and requiring less ongoing client management, can be effectively sold through independent agents.

According to the GHM Theory,the Choice Between an In-House Sales