Part 4: Policy Owner Bill of Rights – The Right to Reliable Information [SERIES]

A man speaking on a cell phone

Imagine calling your bank and asking the customer service representative what your current balance and three most recent transactions were. You write down the responses. Then, later in the day, you can’t find the note, so you call back and ask the same questions. This time the answers you hear sound different from those you were given earlier, but you write down the responses again. Then, you find your first note, compare the two and the answers are different. You call the bank a third time and ask the third customer service representative the same questions and some of their answers match the first note, while others match the second. What is the truth? More importantly, how can you rely on this information to make decisions?

We’ve discussed several of the proposed rights for policy owners in previous posts in our series: 

Today, we want to highlight the right to reliable information. 

The Need for Reliable Information 

This experience has become commonplace in the life insurance industry, and the unreliability of the information policy owners are given has, in many cases, become so untrustworthy that policy owners can become paralyzed and unable to make critical decisions about their life insurance assets. There is no excuse for these conditions or the risks they impose on policy owners of all kinds. Most of the information policy owners request does not change without the policy owner’s involvement. There is no reason why a carrier cannot have it in their systems and convey it to the policy owner or their authorized representative upon request.

Related: The Pernicious Fiction of Accurate Medical Information

Furthermore, policy owners should be able to rely on the information they receive, and they should not be responsible for, or suffer the consequences of, errors made by insurance companies or their employees, contractors, or vendors. Information given in writing should be considered defensible and should protect the policy owner from the risk of carrier mistakes. It should not be acceptable for a carrier to claim later on that what they told a policy owner on a recorded phone call or in writing wasn’t true or correct. Carriers need to be responsible for the accuracy of the information they provide to policy owners, period.

Understanding Why Inaccurate Information Occurs 

All sorts of “reasons” are discussed in the industry as to why carrier information is unreliable, inaccurate or unavailable. One of the underlying reasons cited is that carriers are not investing in their “systems,” particularly for products issued in the past and products issued by carriers that were acquired by the current insurer. In this case, ”systems” include personnel, training, and technology, and the fact that some of the largest household names in the life insurance industry have chosen to ignore the needs of their customers is a disgrace. As we’ve mentioned before, in the digital age, with imaging systems, offshoring and outsourcing, there is no valid reason why the information that supports and describes any life insurance policies shouldn’t be at any CSR’s fingertips in seconds. To say that weeks’ worth of “business days” are needed to “research” basic information, or with respect to our point today, detailed information, is simply embarrassing. 

The other issue here is this — most of what policy owners want to know is historical information that carriers should have recorded in their systems long ago and have easy access to. We’re talking about forms that had to be reviewed and signed, confirmations that were issued and should have been saved in digital form, and all of this information is material to the policy contract. In other words, it becomes part of the legal contract between the policy owner and the carrier. So, when insurance carriers ask the public for their trust, they should be willing to support their desire to be trusted with complete, correct, and clear information upon request. The best way to do that is to honor their commitments, and their word, as opposed to giving policy owners unreliable, unenforceable, inaccurate and incomplete information and then litigating over their mistakes to the detriment of beneficiaries. This week’s policy owner right is: Policy owners have a right to expect their life insurance company to provide complete, accurate, timely, and reliable information about their policy upon request.  To learn more about the right to accurate, reliable information, contact ISC Services.

Proposed Rights For All Life Insurance Policy Owners

  1. All policy owners have the right to be treated as valued customers without regard to their type or purpose as a policy owner. 
  2. All policy owners have the right to expect their life insurance company to maintain complete, accurate, and accessible information pertaining to a policy via an online platform.
  3. Policy owners have a right to expect their life insurance company to provide complete, accurate, timely, and reliable information about their policy upon request.