Flexible, clear and responsive communication can make all the difference to customers taking out one of the most complained about protection policies, the FInancial Ombudsman Service (FOS) has said.
Illustrating her point, Sian Brightey, ombudsman leader at the FOS, highlighted that “flexible, agile and responsive” communication could maintain consumer confidence in the whole of life reviewable policy they took out.
She told the Protection Review Conference 2024 that FOS received around 8,000 protection complaints last year, upholding around 25%.
She added she had deliberately chosen to tell a story about a case where the uphold rate was around 50%.
Jean and Donald
Brightey gave the example of a fictional case of ‘Jean and Donald’ who bought a whole of life reviewable policy in the 1980s.
“Everything was going really, really well,” Brightey told delegates.
“It met their needs. The premium was affordable. And so they continued.
“Over time they increased the value and also increased the premium to make sure the policy was still suitable for their longer term needs.
“And in the following few years, regular communication really reassured them that the policy was fit for their purposes, they trusted it and they felt it had value.”
Doubling of premium
But Brightey added that subsequently the couple received a review letter which projected that their premium would more than double in the next few years.
It would then increase again to the point they would be paying multiple thousands of pounds each month – at a point when their income was reducing because they were heading into retirement.
“That shock led to a massive drop in their sense of confidence and in the value they saw in their policy,” Brightey continued.
“They felt that they had no alternative but to surrender the policy and give up the protection that they had worked so hard for.”
Main challenge
According to Brightey, the main challenge with these policies is the time from inception through to the time when the big changes happen.
“The information and the level of detail that consumers receive plays a big part in how they feel over time,” Brightey noted.
“For Jean and Donald more information, better clarity, helping them to make an informed decision about the future would have gone a long way to ensuring they remained confident about what decisions they needed to make.
“Average life expectancy in this country has increased by more than 10 years since the 1970s and that’s for both men and women.”
Think about the real Jean and Donald
Consequently Brightey challenged delegates to think about the real Jean and Donalds of this world.
“Are they going to be confident in the protection that they have bought?” she continued.
“Will they continue to believe it adds value?
“Or will they be bringing complaints to the Financial Ombudsman Service in the years and months ahead?”
