Marketing health insurance products: Sources and consequences of customers’ confusion

Background: With rapid increase in the marketplace information, falling inter-product differences, and growing complexity in products, confusion is becoming a major problem for the customers globally. Similar problems are also faced by customers in India where there has been a considerable increase in the marketing of private voluntary health insurance (PVHI) products. The study examines sources of customer confusion (similarity, over-choice, ambiguity, and others' opinion/thoughts) and their impact on customers' decision-making uncertainty and decision postponement for the PVHI products.Methodology: A conceptual model is developed to study the relationships between constructs of customer confusion (similarity, over-choice, ambiguity, and others' opinion/thoughts), decision-making uncertainty, and decision postponement. The scale comprising 21 statements is used to measure constructs of customers' confusion, customers' decision-making uncertainty, and customers' decision postponement. Using purposive and proportionate quota-based sampling procedure, 259 responses of patients visiting general practitioner clinics were collected from the urban town of Lucknow located in India. The reliability and validity of the model were examined using exploratory and confirmatory factor analysis. The hypothesized relationships were analyzed using structural equation modeling.Finding and conclusion: Results revealed that similarity confusion, ambiguity confusion, and confusion stemming from others opinion/thoughts to have direct positive effect on customer decision-making uncertainty. The results further confirmed similarity confusion, ambiguity confusion, and over-choice confusion lead to decision postponement for PVHI products. The results of the study may be helpful to insurers and healthcare practitioners in understanding the key sources of customer confusion in health insurance products and related consequences on customers' decision making.Originality/value: To the best of author's knowledge, in the health insurance setting, it is the first study which has synthesized stimuli-based (ambiguity, over-choice and similarity) and situational-based (presence of others' opinions/thoughts) dimensions of confusion into a single model to examine their effect on customers' decision making.