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The Life Insurance Market
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Getting more customers to buy protection products seems to be a never-ending challenge. The public still generally believes the state will support them and until the Government openly says otherwise and we do more to promote what we do, many will prefer to pay for Sky TV and Buster’s pet insurance than for critical-illness cover.
There are of course many who do think about protecting themselves and their families, but who never take out cover. Some abandon the idea after getting quotes and others apply but do not go ahead. Not taken up (NTU) rates are too high across our industry, with some insurers reporting 25 per cent NTU rates. Some of this can be attributed to poor selling practices but often it is simply a case of the customer changing their mind.
Those who only get quotes are perhaps put off by price but more likely were never committed to the idea. It is those who apply but never take out cover who interest me most because they have embraced the need but do not proceed. Why?
Processes have improved, using tele-underwriting and technology to speed up underwriting but there is more that could be done. The process for some is simply too cumbersome, at best, customers lose interest and at worst, they complain about the hassle.
When some insurers only request general practitioner reports because of medical disclosures, why do others still insist upon them due to the client’s age and the sum assured? GPRs are perhaps the biggest frustration because of the delays, yet they are often requested just to check if the client has been truthful.
It is a shame too that even though tele-underwriting is used, it can often only be used to gather information on specific risks. So if the underwriters need information on something not on the permissible list, a paper questionnaire is required. This is not an efficient or customer-friendly process.
NTUs still occur even when terms are offered but again, some insurers have better approaches with premium reductions for exclusions, which treats customers fairly and helps us to sell the terms, reducing NTU rates.
Another reason for customers to reject terms is if their premium increases, they often do not understand why and feel aggrieved. Some insurers are happy to discuss decisions directly with customers over the phone. Others insist on writing to the GP which often results in the customer losing interest.
We must continue to reach out to those who are not aware of protection products but it is a simpler short-term aim to focus on getting more of the people who start the application process to go the distance. It has to be easier to make underwriting more customer-focused than to get Mr Cameron to be honest about the welfare state’s limitations, surely?
Emma Prescott, Head of life office relations at Lifesearch
(This article was published in a recent edition of Money Marketing)
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At LifeSearch we don't just set up your policy and walk away. We're there to help when you or your dependants need to claim too.
As far as we're aware we're the only advisory company to offer you a dedicated claims desk to speed up the process of receiving a payout and, if necessary, fight your cause against the insurers in the unlikely event there is a problem.
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Remember that when you buy a life insurance policy, it is important to consider writing it into trust. The most important benefit is that it ensures that the money that is paid out goes straight to your nominated beneficiaries and does not get held up by the Inland Revenue. It is quick and simple to do. LifeSearch will help you do this for free via our specialist trust team if you are a client of ours. Give us a call and let us help you.
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