Imagine you bought straight life cover, which of the following is easier to read and understand:
- 164 pages including cover and schedule. 19 directly relevant to life cover. In order to understand a clause you routinely need to refer to schedule, definitions, and the clause itself.
- 8 pages long, including the cover. 4 pages directly relevant to life cover. No schedule - the client name, cover amounts, and product choices are shown, where needed, in the document. Definitions are shown in the text as required. A copy of the client application is included.
Both of those are real documents for products on-sale in New Zealand today.
Of course, if you are an insurance adviser or professional working in the industry, you know how these things work and they may be invisible to you - its not that hard, you think. But recent testing shows that as many as 45% of people struggle to comprehend these documents.
Given that we know the problem, we know the effects on customers, and we know the solution, it is getting harder and harder to accept the idea that long, difficult, and confusing documents are an accident.