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Tuesday, May 24, 2022

Study: Life insurance information is not always understandable

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Frankfurt am Main (dpa) – Better, but still not good enough: According to a study, the comprehensibility of the annual customer information on the value of their life insurance still leaves much to be desired.

It is true that most life insurers have implemented the regulations in force since July 2018 and now provide the required information in their letters to clients, as can be seen in an evaluation by Police Direct. “The scope of the documents is now mostly completely sufficient,” explained Henning Kühl, chief actuary at Policen Direkt.

“However, the required values ​​must not only be available, but also transparent and understandable.” The information is important so that savers can estimate what they will get in old age. “Only those who know what their contract is worth today, what they can certainly achieve now and later with it, and who know the alternatives available to them, can make a conscious decision about their life insurance,” Kühl said.

The information is not sufficiently transparent and understandable

In some cases, presentation is at the discretion of the insurer. According to the information, this applies, for example, to the amount of valuation reserves, which are part of the total interest, or to the presentation of additional insurance surpluses in the contract. In these cases, in the opinion of Policen Direkt, the information is often not sufficiently transparent and understandable.

Policen Direkt buys existing contracts from insured persons and continues them. The company has around 12,000 policies in stock, for which information letters, so-called status reports, were evaluated. Overall, 70 of the 74 insurance companies examined fully met the minimum legal requirements for all contracts examined. Customer information was evaluated for classic endowment insurance policies.

Details of the death benefit and the amount to be paid if the contract remains unchanged and at maturity are mandatory. The amount that the insured would receive if no more contributions were paid, as well as the current surrender value of the contract, must also be indicated. In addition, 56 insurance companies have implemented all the reporting requirements of financial supervisory authority Bafin on valuation reserves. In addition to the mandatory information, 20 life insurers provided all other information necessary for transparency.

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