The insurance industry presents particular challenges for consumers, not least because of the complexity of its products. Life and health insurance, in particular disability and critical illness insurance, is particularly complex, and the products offered as protection are not as well understood by consumers as other insurance products.
Policies are also complex, since they are often written in legal and insurance language. The terms used pose a challenge for consumers to understand, especially as they may be familiar words with different meanings in insurance and everyday language. Sometimes the terms appear simple, but their variations are not.
Sometimes, too, the definition of the same term varies from one contract to another. There is also the issue of giving consumers access to all the information they need, without falling into the trap of information overload, which can hamper comprehension. As part of this study, we conducted a readability and comprehensibility analysis of disability and critical illness insurance policies, at both individual and group levels.
This analysis revealed a number of problems that can make fonts difficult to read and understand. For example, the appearance of the font can make it off-putting to read. The organization of information can make it difficult for consumers to quickly find what they're looking for. There are also problems with sentence and clause construction. This reduces consumer comprehension.
We also held focus groups with 33 consumers; some poor readers, some very good. We wanted to find out what they knew about the language used in the insurance industry, as well as their perceptions and understanding of various expressions and clauses.
Our focus group participants, even the most highly educated, found the expressions and writing complex. They said they had to put a lot of effort into trying to understand the expressions used in insurance policies. For weak readers, these challenges are even more difficult, if not insurmountable.
