Behavioral finance studies reveal that people who are confused put off making decisions. LIMRA’s research has shown that this is particularly true for people shopping for life insurance.
To give you an idea about how important effective communication is, consider a LIMRA/Maddock Douglas report that found there are 19 million “stuck” life insurance shoppers in the United States. These are people who see why life insurance is something they should have, but they’re not acting because they’re confused by the language used to describe the products.
Responses by LIMRA’s focus group participants show that many don’t understand or misunderstand terms like “accelerated benefits, death benefit, annuity and protection. Using these terms puts off consumers and makes them less likely to trust our industry.
As we continue to mark Life Insurance Awareness Month in the United States, it’s essential to revisit and rethink how industry professionals communicate with customers and prospects.
A recent LIMRA report called Translate From Insurance to English says many advisors are using analogies to make things clearer, likening the products and their benefits to concepts people are more familiar with and have experience with. For example, many financial professionals compare term insurance to renting a home and whole life insurance to owning a home.
Beyond analogies, financial professionals can raise awareness by asking questions to see where consumers are getting lost, drawing illustrations, and taking a look at what the future might hold. Whatever shape the translation takes, avoiding industry jargon and using commonplace language can help financial professionals show why life insurance is valuable and how it can protect consumers, their families, and their financial security.
For more facts about life insurance, please visit LIMRA’s Life Insurance Awareness Month page.