Jargon of policies makes them hard to understand
IN THE story below on financial resilience, the author of the report says education would help consumers understand the need to buy insurance to protect them if they are ill or have an accident.
While there is no doubt this is true, most consumers would be keener to engage with insurers if they spoke to customers in a language we could all understand a bit more easily.
Do you, for example, read all of the terms and conditions of every insurance policy you buy? Should you have to?
The answer to the first question – given that I’m told the average policy document comes with something like 25,000 words – will most definitely be no.
The answer to the second question should be yes, but it will only ever be yes when insurers write in terms that are plain and clear, and not full of jargon.
You should be told how much you are paying and the cover you are getting for that premium. You should also be told what is not covered by the policy, and what the “exclusions” are, to use insurance company speak.
There should be a reasonable expectation that these things should all be described to us in straightforward language we can understand without having to resort to the use of a dictionary.
At the moment, that’s not the case. Many insurance policy documents come with complicated explanations that would confuse even the most technically minded consumer.
Some companies still resort to the use of phrases in Latin, especially when it comes to describing medical conditions that may or may not be covered in critical illness policies.
How much of that do you understand? And how confident would you be following a diagnosis that your cancer was going to be covered by your insurer?
I spoke at a seminar full of people who marketed these policies, and none knew what a “non-invasive cancer in-situ” was, even though it was an exclusion on policies. If they don’t know, how can we be expected to know?
● Check your payslips regularly to make sure you’re paying the right amount of tax ● It’s important to have an “emergency fund” in case you need access to cash quickly