Everyone wants to know what they are getting out of a transaction, be it professional or personal. This applies to customers of any industry, including life insurance. Despite the complexity of policies, it is essential to provide adequate information about the products being sold to the customer. When disclosing product information to customers in the life insurance industry, keep in mind the following:
- In an era of information overload, keep it clear and simple. Distill the material into digestible pieces to facilitate the customer’s understanding.
- Match the breadth and depth of information with the customer’s knowledge level and experience with life insurance policies. Illustrate how the products will meet their needs.
- Ensure that quality of information is prioritized over quantity. Share the heavier material via snail or e-mail but bring the relevant points to the forefront in other mediums.
- Keep the process transparent for the customer. Identify all parties involved and ensure that all communication lines are open to the customer.
- Do all the above, before and at the time of sale to the customer, to ensure they have all the necessary information to make an informed decision.
The Fair Treatment of Customers guideline on Disclosure expertly lays out the process that can be applied when disclosing information to customers - “CCIR and CISRO expect that a Customer is given appropriate information to make an informed decision before entering into a contract.
Insurers and Intermediaries ensure that Customers are appropriately informed about a product, before and at the point of sale, to enable them to make an informed decision about the proposed product.
The information provided should be sufficient to enable Customers to understand the characteristics of the product they are buying and help them to understand whether and how it may meet their needs. To this end, the level of information required will vary according to the knowledge and experience of a typical Customer for the product in question and the product’s overall complexity.
Whatever distribution model and medium used to make the disclosure, Insurers and Intermediaries ensure they provide an equivalent level of protection to Customers.
Expectations to achieve this outcome (Insurers and Intermediaries)
CCIR and CISRO expect the disclosure to Customers to:
- be up to date and provided in a clear, fair and not misleading way, using plain language wherever possible;
- be accessible in written format, on paper or another durable medium, including electronic mediums;
- focus on the quality rather than the quantity of information;
- identify the Insurer and provide its contact information;
- include information on key features (for example, conditions, exclusions, restrictions and fees) particularly with respect to the conclusion or performance of the insurance contract, including any adverse effect on the benefit payable under that contract;
- clearly identify the rights and obligations of the Customer, including the rights to cancel, to claim benefits and to complain; and
- make the information on their policies and procedures on claims and complaints publicly available.
Expectations to achieve this outcome (Intermediaries)
- disclose the types of business for which they are authorized.
- disclose the services provided, including whether they offer products from a full range of Insurers, from a limited range or from an exclusive Insurer.
- clarify their relationship with the Insurers with whom they contract.” – ccir-ccrra.org
As the industry migrates from traditional to digitalized operations, all aspects of the transition must fit the platforms where potential customers can be found. Reaching a potential, previously underinsured market like the Millennial and Gen Z audience means making complex insurance information easy to consume and understand and accessible to that audience on the go.
