Insurance contracts are too complex for eight out of 10 policyholders in the UK and require at least an A-level education to be understood, a new study has found.

Linguistic experts at the University of Nottingham (UON) analysed a number of policies before using eye-tracking technology and other tests to determine how difficult they were for participants.
They concluded that some policy wording would not be readily understood by 87% of the population, with most only comprehensible to those that have graduated at doctorate level.
However, it was found that re-drafting the most complex policies could make them coherent to the majority of Year 8 pupils, boosting the percentage of people that understand them from 13% to 89%.
"Each finding shows that with a little alteration, over time, the overall readability and understanding of these documents can be improved," UON business development manager, Kay Snowley, said.
"Drafting a perfectly worded policy document is virtually impossible, but what our research proves is there clearly is a lot that can be done to improve how they are currently written."
The study was carried out by experts at the UON's Linguistic Profiling for Professionals unit in partnership with insurance law firm Browne Jacobson, and involved 27 participants.
The researchers analysing policies aimed at small businesses, and used advanced imaging software to track every movement of the participants' eyes as they moved across each contract.
It was found that the extensive use of uncommon or low frequency words and phrases was a common barrier that prevented policies being understood, as was complex sentences and paragraph structures.
The use of unfamiliar pronouns, extensive use of defined terms, and overly-long sentences were also barriers, with the researchers finding that re-wording the policies could make them coherent to 40 million more people.
"The insurance industry has a regulatory duty to ensure the information in policies and contracts is clear and expressed in plain and intelligible language," Browne Jacobson insurance partner, Tim Johnson, said.
"Failure to do so could not only make them harder to sell, but leaves the industry vulnerable to legal challenge from policyholders and the real possibility of further regulatory intervention."