What's Wrong With Life Policy Claims

Recently, I assisted a relative after the passing of her spouse. There were four life insurance policies from three different companies — all with claims to file and distribution options to evaluate. Understanding the terms of the policies and the possible distribution choices were challenging and required advice from a financial advisor, but that’s what I expected. There were tax implications to consider and occasionally the complexities of estate planning to take into account, but I expected that, too. What I did not expect was how difficult it was to connect with the insurers to ask questions on how to submit the claim and get clarification about the options. It seems that the industry still has lots room for improvement when it comes to the customer experience.

When a beneficiary calls to ask policy questions regarding a spouse who has recently died, it is an emotional and extremely important touch point. I was surprised — no, shocked, really — at the responses we got. First, an email with specific questions for one of the agents was answered two days later, and the response was that we should call the insurer’s customer service number. Then, we spent an afternoon calling insurers — only to be sent to voicemail or put on hold for long periods of time. We finally got to a live person, only to be transferred to another person and put on another long hold. From the customer’s perspective, they have been paying premiums for decades, and rarely, if ever, have asked anything of the insurer — at most making a loan request or changing a beneficiary. Now, in their time of need, they are finding it difficult to get to a human who will assist them in a timely, compassionate manner.

Granted, this is a sample size of one, but my sense, after working with several companies, is that this is not uncommon in the industry. Also, I do understand that most of the emphasis and funding for projects goes into customer acquisition. But, remember, this is the true time of need for life insurance. And there are solutions available to help provide a better experience. There are three suggestions I offer to improve the situation. The first is simply to have the staffing levels to support call volumes so that a customer always gets to a real person when they need it. This is not the place to cut costs. Second, leverage more self-service capabilities that allow claimants to easily get answers to the basic questions. These self-service capabilities should have click-to-chat and click-to-call options so the individual can get more help if needed. Finally, move toward a more omni-channel environment so that information and conversations can be easily transferred between channels, eliminating the need for people to repeat information or start the process all over again every time they talk to someone new.

It’s terrible to make a person who is grieving the death of a loved one have to go through more difficulties or make them wish they had never done business with a company in the first place. In our case, we dealt with three different companies, and all of them gave us an experience that left a lot to be desired.

Life insurers, take notice. Remember that we are in a new era — one in which customer expectations are higher. Failing to deliver a good customer experience after the loss of a loved one may not seem like one that will ultimately affect financial results, but the ones left behind will share their experiences with others. You may find that you have a lot to lose, too.