Financial jargon puts customers off buying insurance
Customers are put off buying insurance because they find financial jargon too confusing, according to new research.
Insurance documents were rated as the hardest to understand – and many confirmed they decided not to buy because they found the paperwork too complicated.
The findings come from a survey by the Plain English Campaign for insurance company Unum.
Around 2,000 people were asked to give a ‘difficulty rating’ to consumer product information.
Insurance scored 46% – almost double second-placed banking’s rating of 29%. Food product information was voted the easiest to understand – with a difficulty rating of just 8%.
Two out of three customers (64%) requested simpler financial product information, while three out of 10 wanted more images and graphics (28%) to better explain financial products.
The survey has resulted in Unum urging insurance firms and partners, like advisers, and brokers to review documents given to customers and to remove complicated legal terms and jargon.
Marie Clair, of the Plain English Campaign, agreed and felt more customers would buy insurance and financial products if they better understood how they worked.
“Complex information and small print give people difficulties in really understanding information about the products they are buying,” she said.
“From this research, it is clear the insurance industry needs to ditch small print, jargon and gobbledegook in their information. Product information should make complex products more accessible to consumers, not more confusing.
“We’re backing Unum’s plea to the insurance industry to update product information so that it is crystal clear because better understanding brings greater confidence in the choices we make.”
Unum has already looked at in-house financial documentation and produced a glossary of terms to explain some insurance jargon for customers.
Jack McGarry, chief executive officer of Unum UK, said: “It’s not surprising that many people find insurance confusing – there are thousands of products on the market to choose from.
“The results show that, as an industry, we need to make our products more comprehensible to the consumer. I want people to easily understand, that if you can’t work because of illness or injury, you need to have a back-up plan in place to support yourself financially.”