Fit for purpose products to please clients

The life insurance industry has been facing a number of changes over the past few years, such as the implementation of Treating Customers Fairly (TCF) guidelines, which has led to a shift towards product and services that are suitable for a specific targeted client market.

Some life insurers may equip their products with bells and whistles, where the policyholder ends up buying into the added extras rather than the policy itself. This is a concern as these products should be positioned in transparent and simple ways so that the consumer understands exactly what they are buying, and whether it truly suits their needs. The core elements of a product should never be overshadowed by all the added extra features as it is this that will ultimately protect the client should the unfortunate happen.

Appropriate improvements

When life insurers consider product innovations, it is important that these developments are appropriate to their designed target market rather than simply enhancing a product without proper consideration as to whether the new enhancements will actually benefit the policyholder.

For example, it is not appropriate to add purely generic functional impairment benefits to a product that is mainly targeted at professionals who are in administrative positions or occupations where even the smallest of impact could have devastating consequences on the client’s financial future. While it is imperative that insurers remain competitive in the market, companies must endeavour to offer products and innovations that are relevant to their clients.

In addition, product innovations or enhancements should not be difficult for the client to understand, as the more complex a product is, the less likely the chance of the client truly knowing and understanding their policy.

Imagine the following enhancement: the client qualifies for A but it can only be used if he comply with term B, have benefit C, fall within the parameters of D and E, without product F and finally a G below limit H. No client can be expected to understand and remember this type of benefit, especially not in a time of emergency. Furthermore, it complicates the life of the adviser who has to explain all of this to the policyholder.

The advisors role

The adviser’s role is imperative when it comes to attaining a competitive advantage. When the insurance provider has solid relationships with its advisers, it ensures that the insurer is top of mind and that the adviser is provided with the necessary support to best understand the company’s offerings, which will in turn filter through to the adviser’s service and advice to clients.

Due to advisers being involved with clients on the ground, they deal closely with the needs and glitches that clients and prospective clients experience. From the insurer’s point of view, the adviser’s feedback on these aspects are extremely valuable as it aids in improving products and processes to ensure that the insurer remains relevant and in line with its target market’s specific needs and requirements.

The vital link

An adviser is the key player to position and present an insurer’s product correctly, and highlight the various differentiating features of the product that is relevant to the client. This includes aspects such as the insurer’s philosophy, values and unique benefits.

From the client’s point of view, an informed client is a client for life, who will learn to trust their adviser and insurer, which underpins the principles of various regulations within the financial services industry. In an industry riddled with choice, a financial adviser plays one of the most important roles in ensuring that the right products from the right insurer are proposed to the right clients.