Insurance and pensions products are important for protecting and helping consumers in their daily life, notably to cope with serious difficulties (e.g. floods, fire, car accident etc.).
Before buying an insurance or a pension product, it is advisable to obtain more information. Please find below some tips to have in mind on how to buy a product, how to keep track of it, how to handle a claim or a complaint, and how to cancel an insurance or pension product.
Watch our video to learn more about buying and using insurance and pensions products >
Insurance and pensions a complex. It is essential that you do some research.
There are specific websites dedicated to helping you understand your needs and the choices you have.
EIOPA has gathered a list of websites with financial education information for each country. In the map below you can find informative websites and portals in your country aimed precisely to help consumers find their way in the insurance and pensions sectors.
Ask yourself what type of risk you want to cover. Do you want to cover risk in relation to a property or a personal risk, such as death or disability? Do you want basic coverage or an optimum coverage with additional guarantees?
If you want to save for the future, you should also ask yourself the following questions:
- What is your ability to bear losses?
- What are your investment objectives, including environmental, social and governance preferences?
- What is your risk tolerance?
- What is your time horizon?
Consider making an online search to have an idea of the products that are available in the market. Online comparison websites can help, but they may not always show you all the products, and they may prioritise products that not meeting your needs.
Where you are buying through a local insurance or financial intermediary, you should check this table with links to national registers to check whether your intermediary is registered.
Consumer trends report
Once a year, EIOPA publishes a report which outlines consumer trends. Consumer trends are the changes in consumer behaviour in insurance and pension topics – including the types of products and services being bought and changes in how well these are working in practice for consumers. Trends include potential new risks for consumer as well as positive developments.
Over the last few years, One observed trend is the increasing usage of telematics across different insurance products. This can have both positive and negative aspects. For example, Big Data analytics in health insurance may reduce costs and help insurers in identifying, assessing, and insuring new types of risks. However, the usage of telematics in health insurance may lead to the potential exclusion of some consumers’ segments, price-discrimination, and switching and competition issues.
Find out where you can purchase insurance and pension products and what documentation you should receive before you purchase it.
There are different intermediaries in the market taking different roles and responsibilities. Intermediaries might be brokers, who compare different offers available on the market for you, or tied agents, who only offer the products of certain (or a small number of) companies. Whereas tied agents are paid by the company with whom they have a contractual relationship, brokers are compensated either on the basis of a fee arrangement between yourself and the broker or on the basis of a commission.
Apart from intermediaries, it is also possible to go directly to the company selling insurance and pension products. Going directly does not necessarily lead to lower prices. Consumers can also have the possibility to underwrite insurance products through the compagnies’ website.
Buying an insurance or a pension product through internet could mainly happen through 3 distribution channels :
- Companies’ website
- Intermediaries operating internet platforms
Internet sites which list the offers of several companies are increasingly prevalent. These comparison websites (also called price comparison websites or aggregator websites) are increasingly prevalent and can serve both as sources of information and in some cases can directly allow you to buy products
Insurance and pension products are also sold by banks, often selling products from a linked insurer. For that reason, banks may only offer a selected and limited choice of insurance and pension products, and the insurance and pension products to be sold are not independently selected.
You should receive the following documentation before you purchase an insurance or pension product in the European Union:
Terms and conditions of the product
You must be provided with a document that sets the rights and duties of you and the insurance/pension company or insurance intermediary. This document is not standardised and may look different from case to case.
Insurance Product Information Document (IPID) for non-life insurance products
The standardised IPID provides you with the most relevant information about non-life insurance products prior to the conclusion of a contract.
Key Information Document (KID) for insurance and pension products with an investment element
The KID helps you to understand the key features and risks of insurance and pension products with an investment element. With the help of KIDs, you should be able to compare such products Europe-wide.
Suitability statement in case of advice
When an insurance intermediary//insurance undertaking advises you regarding an insurance or pension product with an investment element, the intermediary must provide you with a suitability statement that includes information on why the recommended insurance product is suitable for you, in particular how it meets your investment objectives, financial situation and knowledge and experience.
Information to be given to prospective members of a pension scheme
If you are a prospective member who is not automatically enrolled in a pension scheme you should receive information on the investment options, kind of benefits and whether sustainability factors are considered.
After purchasing an insurance or a pension product, don't let the contract in your drawer. It is important to monitor how your insurance and pension product with an investment element is evolving so that you can make the right adjustments.
You will receive information at least annually about how your investment is performing.
If you would like further information to understand the performance, the insurance company or your financial advisor should be able to provide this to you. Many insurance companies publish information or reports explaining the annual performance of different products, for example in relation to the performance of the stock market.
For some products you can monitor the performance of your investment online on an ongoing basis.
The insurance company or your financial advisor may also offer you advice during the lifetime of your investment. This could cover whether the product remains suitable for you depending on how it performs or if your circumstances change. In this case, you should receive information on the services that they provide to you and any costs.
When considering information on how your product is performing, you should take into account the level of risk. Riskier products naturally can have positive and negative years.
If you are disappointed about how your product is performing you could consider making a change to your product or ending the contract. However, before making a change you should make sure you are aware about the consequences:
The investment objectives of the product and its recommended holding period
Whether there is a guaranteed investment return and whether this only applies if you hold the product until it ends
If you receive any additional bonuses or investment returns if you hold the product until its ends
Whether you are able to exercise different options and if there are costs associated with this. For example, you may be able to move your money into a different type of investment or fund without having to cancel your existing contract
Whether there are additional costs to ending your contract early. In many cases, you will not simply receive the value of your investment at the time that you exit, but will also have to pay a penalty fee
Similar to the situation of buying a new insurance product, you should get the following documents before taking any decision of modifying your insurance or pension product with an investment element:
The terms and conditions of your insurance product which may even include information on possible options to modify your insurance contract and on how to apply for the modifications
Key Information Document for insurance and pension products with an investment element
Suitability statement in case of advice
In case you are involved in an accident, theft or other unfortunate event which is covered by your insurance, you may want to make a claim with your insurer. Find out what you need to do when filing a claim.
Follow these three steps when filing a claim:
Contact the police
If you became a victim of a theft or any other malicious act, you should first report the incident to the police.
Check your insurance policy
Review the terms and conditions of your insurance to check whether the loss is covered. In particular, you should review if there are any restrictions or exclusions on cover that would prevent you from making a successful claim.
Notify your insurer
Inform your insurer about the loss you suffered and that you want to make a claim as soon as possible. If you bought your insurance through an agent or broker, you may consider contacting the intermediary to receive support in relation to your claim.
Lack of documentation: it is important to submit to your insurer a copy of all supporting documents required by your policy to ensure a quick processing of your claim.
Omit information or exaggerate your claim: you should not hide facts or make your loss bigger than it is. Insurers will likely detect any attempted fraud, which may result in a denial of your claim.
File your claim too late: your insurance may have a time limit for making claims – so you should report your claim to the insurer as soon as feasible.
Failure to read your policy documents: your loss may be included in the list of inclusions or you may have to pay a deductible – so make sure you read your policy documents to ensure it is worth making a claim.
While EIOPA has no competence with regard to complaints against insurers, reinsurers, insurance intermediaries or occupational pension funds, we would like to ensure that you find a resolution to your complaint
You may complain against an insurance or reinsurance company, insurance intermediary or occupational pension scheme or against a national competent authority.
If you no longer need an insurance policy or a pension product, or if you are not happy with your current policies, you can always cancel your insurance or pension contract. Find out how to do that and you need to keep in mind in case of cancellation.
You may cancel your insurance or pension product for any reason within the statutory cooling-off period (see "What is the cooling-off period of my insurance or pension product?").
Please refer to your policy if you want to cancel your insurance or pension product after the cooling-off period. You may have to pay a penalty if you cancel your insurance or pension product after the cooling-off period.
Before you notify your insurance or pension company of the cancellation, you should review the terms and conditions of your policy as there may be instructions on how to cancel it.
Your insurer may give you a refund of the premium paid after you have cancelled the insurance or pension product.
Under EU rules, if you bought your insurance or pension product online or by telephone, you have the right to cancel it within 14 days, for any reason and without a justification.
In addition, if you bought an individual life insurance online or by telephone, you may cancel your insurance within 30 days.
You should review the terms and conditions of your policy for further information on the cooling-off period of your insurance or pension product.