In my experience very smart people don't really know what all the components mean. 

  • I mean I feel like it does lead to confusion
  • So, I think if you can refer to the eventual illustration and just show the cash value.

-- Teresa Winer (GA)

2019 0917, NAIC LIIIWG, <Bonk>

  • He <Michael Lovendusky - ACLI> said consumers are mostly confused about options, guarantees and riders.
    • The ACLI work group was considering asking the Life Insurance and Annuities (A) Committee to narrow the charge to look at only products with options, guarantees and riders, but Ms. Cude said she thinks that it is important to consider how the disclosures for all products could be improved.
  • <Mr. Lovendusky - ACLI> said the ACLI work group thinks that most confusion for consumers involves complex products like Universal Life, and not Simple products like term life.

2016/4/3 - Life Insurance Illustrations Working Group (LIIIWG), NAIC Proceedings

Gary Sanders (NAIFA):

  • And that leads to my second concern which is that consumer confusion I think, and we fear, in large part is going to be translated into a lack of confidence or a lack of trust in their advisor.
  • And in some way or another, the consumer is going to end up with the feeling that the advisor did some form of misrepresentation initially to the consumer and now the truth is coming out.
  • And I think that is a very big concern and not only would it harm the consumer's confidence in the producer, but it could have a lot of reputational damage to producer's as well.

2019/11/15 - Indexed Universal Life Insurance Working Group (IULWG) - NAIC - Conference Call <Bonk>

Focus Groups / Consumer Testing

  • A great deal of the confusion seems to stem from a lack of understanding of how cash value insurance products work and a lack of understanding of insurance terminology.
  • Also, because most people presume that if you pay your premium continuously, your policy will remain in effect, quite a few people had a hard time understanding how or why the policy would terminate in policy year 31.
    • This was simply foreign to their way of thinking.
  • One person was so confused that he said that the maturity age and endowment benefit were moot points, since the policy was going to end at year 31 anyway.

1990-1A NAIC Proceedings - NAIC LIMRA - Universal Life Disclosure Form Test Market Results - 10p

  • After receiving these notices, John <Policyowner> contacted Glasgow <Agent> who had retired in 2000, to inquire why his policies would be terminating, even though he had timely paid the premiums on the policies for approximately 18 years. (p5)

2010 - Maloof v John Hancock - 60 So. 3d 263 - Ala: Supreme Court - Alabama Supreme Court Opinion - 39p

  • Complaints and inquiries related to life insurance and annuity products were less frequent, and generally concerned consumer dissatisfaction with, or confusion regarding Universal Life insurance policies.

2018 - Wisconsin Insurance Report, page 90