by Russell Hutchinson
Most consumers desperately need you to explain how their policies work. Because you are much more familiar with the policies than they are, and because people are quite good at hiding how difficult they find reading legal documents, you probably overestimate their ability to cope. You should plan to provide a simple explanation of any feature of a policy that you sell. If you don’t some of your clients will be grumpy come claim time, and others may be grumpy enough to get litigious.
Here’s why:
I’ve been involved in a tug-o-war recently between a marketing team and a legal team over how to communicate the terms of an insurance policy to potential clients. Everyone has the same shared values: it’s the goal of both teams to ensure that clients understand what is being sold to them, so no problem there.
What was a problem is deciding whether there is a legal difference between saying whether a company “administered” a policy or “runs” it. Or whether a client has “understood and accepts the terms” or if we ask them “Is those terms clear? Are you happy with them?”
The first problem is that the legal people – all seriously well educated, of course – can’t quite believe how well most people out there can actually read. Or rather, perhaps, how difficult it is for them.
There are those cheesy old statistics of “the average reading age is nine” or “eleven” – which is the range quoted for the UK, for example. These have the same problems that all averages have for a kick off. There is a big difference between, for example, the ‘prose’ literacy level, the ‘document’ literacy level, and the ‘quantitative’ literacy level. Kiwi readers find each of those progressively harder.
New Zealand formed part of a survey of OECD countries which found that although we had – relatively high levels of prose literacy we also have much lower levels of document literacy levels. We must all know clients that are flummoxed by documents – they seem to have a special ability to confuse some people. In fact 40% of kiwis read at IALS levels 1 or 2. I read an example of an exercise, and one example consisted of knowing that “maximum” in the context of a medicine label means “not longer than”. That’s similar to knowing what ‘administered’ means.
Knowing what the word ‘maximum’ means or ‘administered’ is good deal simpler than deciphering the formula used to determine what will be paid in the event of partial disability in the typical income protection policy. At least half of your clients won’t be able to do it. So you’d better be prepared to act as translator.
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