How to communicate insurance benefits effectively

In the world of insurance, the benefits customers receive are more than just financial coverage—they represent peace of mind, security, and support during challenging times. However, the challenge lies not just in providing these benefits but in effectively communicating them. Failing to do so can lead to significant downsides, including misunderstandings, underutilization of coverage, and overall dissatisfaction.

Downsides of Inadequate Communication

You put a lot of research and resources into making sure you’re giving customers what they need. But that all goes to waste if they don’t know about it. If you aren’t communicating your benefits properly with customers, you are risking:

1. Misinterpretation and Underappreciation: When customer coverage isn’t clearly communicated, policyholders might misunderstand the extent or scope of their coverage. This can lead to frustration or disappointment when they attempt to claim benefits they thought were included but aren’t. In fact, 1 in 4 health plan members are “often” or “always” confused by health plan communications. Also, in a study conducted by Harris Poll, 54% of employed Americans do not know the full scope of what their current health insurance offers them.

2. Underutilization of Benefits: Are customers aware of all the benefits available to them? They may not be. As a result, they might underuse or completely overlook certain features that could significantly benefit them in times of need.

3. Decreased Customer Satisfaction: Lack of clear communication about benefits can lead to dissatisfaction. A customer that could have ended up satisfied with your products and customer service might end up walking away before they have even had a chance to experience everything your company has to offer.

Communication Strategies Employed by Insurance Companies

Communicating in the right way matters. Being on the right platforms where your customers are spending their time is crucial for reaching them. Once you’re there, make sure you’re speaking their language to aid in understanding!

Insurance companies employ various strategies to effectively convey insurance coverage.

First, providing policy documents that are easy to understand is important. Simplify the insurance jargon. Use plain language to ensure customers comprehend their coverage—and any new offerings you may have that fit their needs. For example, a phrase like “mitigate damages” could be “protect from further damage.”

Second, make sure the communication is personalized. Tailor communication to individual customer needs. This could involve sending personalized emails or direct mail, using data to determine what customers are most likely to buy, personalizing URLs for each individual customer, or even having dedicated customer service representatives to explain benefits based on specific situations.

Lastly, help educate your customers. Insurance companies often create educational materials such as FAQs, videos, and articles to clarify complex coverage areas, making it easier for customers to grasp the benefits available to them.

Personalized Approaches for Benefit Information

Personalized marketing is the new door-to-door sales.  What was once a face-to-face visit to individualize sales to each home is now done digitally or via mail—albeit with offerings that are still just as personal. These personalized approaches extend to communicating with customers about new benefits too.

The personalized communication methods require data first and foremost. Quality data lets you know your customers better. This way you can decide what customer benefits they want and which specific individual customers want the benefits you’re offering. Once you have determined this, data also helps in tracking progress of campaigns, collecting information to consistently improve marketing ROI, and better serving your customers.

Proper communication about the customer’s policy is an important part of effective communication. However, that is just the beginning. When you launch a new product or opportunity for your customers, you want to make sure they are aware of that too.

Some guidelines that may help with communicating effectively are:

1. Go where your customers are. Use the behavior and demographic data you collected to find out where your customers spend their time. If you’re offering a product that is a good fit for customers of a younger generation, you might find that they want you to communicate with them via mail as well as digitally. Make sure you’re showing up in the right places so they can see your messages.
2. Use simple messaging. The less work it takes for customers to understand what you’re offering, the more likely they are to take part in that offer.
3. Try a survey. Use a customer survey to determine what offerings your customers are aware of and which may need more light shed on them.
4. Provide resources like online portals and apps to help customers easily access policy information, including new offers or upsells that may be relevant for them.
5. Create a smooth customer experience. While communication is only a portion of the overall customer experience, it must be a smooth one. By ensuring consumers are moved through a process that is both automated and manual, they will end up feeling more understood, less confused, and will have fewer questions and concerns about the experience and products as a whole.

Better Communication = More Customer Satisfaction

Clear, personalized, and consistent communication plays a pivotal role in enhancing customer satisfaction and fostering a positive relationship between insurance providers and their clients. The more your customers know about what you’re offering them, the happier they will be—which leads to higher retention and more revenue.

FM Engage helps insurance companies communicate more effectively with customers. Using over 50 years of industry experience and proprietary data, we can improve your marketing ROI and revenue by reaching customers where they are with messaging they understand.