We’re consistently bombarded by life insurance advertisements on TV. They dominate the media. Each one paints a rosy picture of how great the company is and how easy it is to apply for insurance. The advert typically includes a testimonial from someone who has had a positive experience with the company.

Insurers use marketing to make it seem like getting insurance and making a claim are easy, painless and quick. Sometimes, that couldn’t be further from the truth.

Here are a few factors to consider:

• While the insurer might claim that the person giving the testimonial is a client, they can’t prove it. Most advertisers hire actors to appear in their adverts.
• Just because one person has a pleasant experience doesn’t mean everyone will.
• Look at the screen for that tiny phrase, “T’s and C’s apply.” Don’t assume that the process is as easy as the advert makes it look. There is a lot of fine print in an insurance policy. It is your responsibility to read it and make sure you understand it.

Insurance companies differ, and experience with the organisation may vary. Each year, the South African Customers Satisfaction Index (SAcsi) completes a survey in several industries. One of those is the life insurance sector.

There are three main criteria applied to the survey:

• Customer expectations
• Perceived quality
• Perceived value

The insurer’s final rating is calculated based on whether customers feel their needs were met. Some will feel the insurance company fell short of their expectations while others think it exceeded them. An overall score is calculated, and insurers are ranked.

Competition in the insurance industry is fierce. Aggressive marketing is how these companies strive to distinguish themselves from their competitors. Another competitive edge is an established reputation. Older insurance companies tend to fare better because of their track records. South Africans tend to be quite sceptical of newcomers in the market. Instead, they prefer to stick with the names and brands they know.

For that reason, well-known companies tend to dominate the upper ranks of the SAcsi survey results. These include Metropolitan, Old Mutual, Sanlam, Momentum and Liberty. A relative newcomer is Discovery. However, it is a well-established brand due to its medical aid arm.

This doesn’t mean that these top insurance companies don’t have their share of problems. According to the Long-term insurance ombudsman’s records, some of our best companies are also on the receiving end of a lot of cases lodged with it.

These include Liberty, Old Mutual, and Metropolitan. Other insurers with a high volume of disputes brought before the ombudsman include Hollard and Assupol.

Before you go ahead and decide which company to select for a life insurance policy, consider the following factors:

• Other people’s past experiences are a fairly good predictor of your future experience. If a lot of people have had problems with their claims, it’s possible you might as well.
• Make sure you understand the terms and conditions of the life insurance policy to avoid nasty surprises.
• Shop around and see which company can offer you the best premium. Use the available online tools to compare quotes or ask a broker for help.
• Ensure that the premium is affordable. Most premiums go up on an annual basis. You need to be sure you can manage the increased cost within the constraints of your budget. Missed premiums can result in the lapse of your policy, and any claims will be declined.