An older applicant needs a second day, not a second person

Japanese insurers have spent a decade building safeguards for older applicants, and the most familiar is asking a family member to be present when a policy is explained. The industry's guidance on older customers describes several measures, among them a relative's attendance, more than one meeting and confirmation by a second member of staff, and each insurer chooses its own combination. My position is that for direct sales by telephone and online, the default should be a second conversation on a different day, with the applicant heard alone first, and that a relative's presence should be offered rather than required.

I hold this view with some caution, because the people affected are exposed to errors in both directions. An insurer can sell an unsuitable policy to an older person, and it can also deny a capable adult a decision about their own money. Every safeguard trades one risk against the other. I want to explain why, in our experience, the second day protects better than the second person.

What a relative in the room protects

A relative's presence guards well against one serious risk: that an applicant whose memory or judgement is declining agrees to something they do not understand, under pressure from a skilled seller. In a living room with an agent it is a sensible safeguard, and in face-to-face sales it may still be the best available.

On the telephone it works differently. Until 2024 our contact centre asked applicants aged 75 and over to have a relative on the call, and three things happened that we had not foreseen. Many relatives were sons and daughters in their fifties calling from work, so calls were arranged around their diaries rather than the applicant's. In a meaningful share of calls the relative did most of the talking, and our advisers found themselves explaining the policy to someone who would not pay for it. And some applicants declined to proceed because they did not want their children involved in their finances; a few called back later and applied without mentioning their circumstances at all. When we reviewed 300 recorded calls in 2023, the applicant spoke fewer than ten sentences about the cover itself in 41% of the calls a relative attended.

None of this means relatives behaved badly. Most were helpful and kind. It means the safeguard was confirming the relative's understanding and recording it as the applicant's.

Two calls, the first one heard alone

Since April 2024, an applicant aged 75 or over who telephones Tomoshibi Life or starts an online application is offered a two-call process. In the first call, with the applicant alone unless they ask otherwise, an adviser explains the policy, the premium and what it would and would not pay in two or three common situations. No application is taken. The adviser arranges a second call at least two days later and posts a one-page summary in large type.

In the second call a different adviser asks the applicant to explain back, in their own words, what the policy would pay for a ten-day hospital stay and what it would cost each month for life. If the answer is accurate, the application proceeds. If it is not, the adviser explains again and the application waits for a third conversation, or stops. A relative may join either call at the applicant's request, and at the start of the second call the adviser asks whether the applicant would like anyone else to hear the summary.

Two features matter more than the rest. The interval gives the applicant time to think, to talk to whomever they choose and to change their mind with nobody on the line. And the explain-back measures understanding directly, instead of inferring it from who else was present. Since 2016 the law has required insurers to ascertain what a customer wants and to give them what they need to decide. Our process is one way to show we have done both, in the customer's own words, on a recording.

Advisers on the second call are not paid on whether the application completes. Inside our direct sales department that was the most contested part of the design, because it created a group of advisers whose work could not be counted as sales. We accepted that.

The sales we stopped making

Conversion for applicants aged 75 and over fell from 38% of enquiries to 24% in the first year. About a third of the fall came from applicants who did not take the second call; the rest came from applicants who could not explain the cover back, or who could and then decided it was not worth the price. On our figures we wrote about 2,600 fewer policies a year in that group. Our head of direct sales argued, fairly, that some of those customers bought from competitors with simpler processes, and that we cannot show they are better protected by buying nothing from us. That remains the strongest objection to what we do.

The evidence on the other side is improving but not conclusive. Cancellations within the cooling-off period, and complaints from older customers and their families, both fell sharply. Our claimant follow-up, which asks whether a payment matched expectations, shows that customers aged 75 and over who bought under the two-call process were less often surprised. I treat these figures cautiously, because the group is small and the period is short.

There are cases where the process is wrong. An applicant with significant cognitive decline may pass an explain-back on a good day. Some applicants want a relative involved from the outset, and we arrange that. Hearing loss makes a telephone explain-back harder, and we are testing a text-based version. The process is a default, not a rule that overrides an adviser's judgement, and advisers escalate calls that worry them to a supervisor.

I would not ask an agency-based insurer to copy our design; its sales happen in rooms ours do not. I would ask any insurer selling to older people at a distance to review a sample of recorded calls with one question in mind: in how many did the applicant, rather than someone else, show that they understood what they were buying? If the answer is uncomfortable, adding another person to the call may not be the remedy. Adding another day may be.