Let’s say you’re in the market to buy a new washing machine. You want one that will get your clothes clean, be energy efficient and be within your budget. Now, imagine you go to the washing machine store down the street and meet with a very knowledgeable washing machine salesperson. You tell them about your family’s laundry needs and then they tell you about the different models available. You hear all about the BPL cycles, the cost per load amortized and rationalized, the FTRS and KLPT (optional, but definitely recommended!). Not wanting to sound uninformed, you murmur something about “thinking it over” and leave.
At home you frantically research all these terms to figure out what features you actually need. After your head stops spinning, you realize that your old washing machine is just fine for a few more years. That is too often the experience of customers looking to purchase life insurance. In fact, according to LIMRA, 72% of people found that understanding the details of a policy is either very difficult or somewhat difficult.[1]
In this series of articles, we will break down insurance jargon using plain language to help you understand how to communicate more clearly and more effectively with your customers.
A language all our own
Like most industries, life insurance has a language all its own made up of a lot of complicated sounding terms, acronyms, and jargon. And that’s OK when you’re talking amongst your colleagues. But when you are speaking with potential customers, plain, easy-to-understand language is going to be the most effective at helping them to understand their needs as well as the products and features available to help them meet those needs.
Acronyms
These can be very confusing for anyone not familiar with the terms. To help communicate more effectively, a good place to start is to write down all the acronyms that you use when talking about life insurance. These can include terms like UL, CI, JFTD, CSV. Next, make sure that you fully understand what all the acronyms you use mean and that you can explain them in clear, concise language for your customers. And finally…stop using them! Of course, an acronym or two will spill out every once in a while but try to catch them when you can, especially when talking with customers.
Jargon
Jargon refers to special words or expressions that are used by a particular profession or group and are difficult for those outside the group to understand. You may think these terms are everyday language because you are so used to them but think back to what you understood when you first entered the life insurance industry. In our industry some of the more common jargon includes: advisor, beneficiary, death benefit, rider, cash value and premium. Again, make sure that you fully understand these terms so that you can explain them to your customers.
Products
Even the names of our products can be confusing to a customer who is not familiar with the world of life insurance. Make sure that you can explain the difference between universal life, term and critical illness products in plain language – that is without using any acronyms or jargon.
With a little bit of practice, you can learn to speak in plain language when it comes to life insurance and be a better source of information for your customers.
[1] Source: Life Insurance Ownership in Canada, Life Insurance Marketing and Research Association (LIMRA), 2019
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