The complexity of life insurance products has long been an obstacle for consumers. If they can't understand how the product works or recognize its benefits, they are much more unlikely to purchase a policy. In fact, the proportion of households with life insurance dropped from 63% in 2011 to 51% in 2024, according to the
Fortunately, behavioral science offers several solutions to aid in
What is behavioral science?
Behavioral science covers a number of fields, including psychology, sociology and anthropology, and it also focuses on the behavioral aspects of others, like biology and economics. The overall goal of behavioral science is to gain a better understanding of human cognition and behavior.
What has behavioral science discovered about people's thought processes?
Behavioral science research has determined there are two systems of thinking that people use on a day-to-day basis to make decisions. For some cognitive tasks, people use fast, automatic, maybe even unconscious thought processes that psychologists call "System 1" thinking.
Imagine a young parent named Jane shopping for life insurance. She finds herself skipping an online ad that lists pros and cons of purchasing life insurance and, instead, clicks an ad that shows an image of happy children. This could be because the image appeals to her emotionally and would serve as an example of System 1 thinking. When Jane scans a bulleted list on a website, while bypassing big blocks of text that would take more effort to understand, she displays another example of System 1 thinking.
More complex, deliberative cognition is "System 2" thinking. When Jane begins to contemplate how life insurance might protect her family or takes the time to understand new vocabulary and concepts, she is employing this type of thinking.
How do we know behavioral science techniques are effective in improving comprehension?
The Society of Actuaries (SOA) Research Institute collaborated with Reinsurance Group of America (RGA), a leading global life and health reinsurer, to test several behavioral science techniques in aiding comprehension of life insurance products. About 2,000 people participated in the experiment, which took them on fictional online customer journeys. The first prototype journey served as the control and did not use any comprehension techniques. The control prototype used technical language and blocks of text.
Four other customer journey prototypes used different levels of techniques known to enhance learning via System 1 thinking or encourage System 2 deliberation. After participants finished the various customer journeys their comprehension was measured against the control.
Based on research, which behavioral science techniques are most effective in improving comprehension via system 1 thinking?
Behavioral scientists have discovered a number of approaches that can aid comprehension in System 1 thinking. Some of those approaches and how well they performed in the SOA/RGA experiments are listed below.
Make it easy:
- Simple language
- Bullet points instead of text blocks
Findings from the SOA Research Institute/RGA experiments revealed that make it easy techniques increased comprehension, but by only 3% compared to the control.
Make it timely:
- Presenting key information at relevant points within the customer journey
Adding to make it easy techniques by offering definitions and explanations at pertinent points in the customer journey increased comprehension by only 0.2% compared to the control.
Make it salient:
- Layering key information at the top of a webpage and details farther down
- Summarizing complex information
