What is a key reason for the requirement of an outline of coverage prior to policy issuance?

The requirement for an outline of coverage prior to policy issuance is primarily aimed at ensuring consumer awareness of the benefits provided by the insurance policy. This outline serves as a crucial document that summarizes the specific features, benefits, and limitations of the policy, allowing consumers to make informed decisions regarding their coverage.

By providing this information upfront, consumers can better understand what they are purchasing, including the scope of coverage, any exclusions, and the overall terms of the policy. This transparency is essential in helping policyholders evaluate their options and select a plan that best meets their needs.

In addition, this requirement is part of regulatory measures designed to protect consumers, preventing situations where individuals might purchase a policy without fully understanding what is included or excluded. Such awareness not only aids in consumer satisfaction but also promotes responsible financial planning regarding insurance needs.