Some say technology is the perfect partner for life insurers, providing the data needed for more specialized coverage. Others feel it may be a step too far in deciding how policies are managed.

Technology is becoming part of the future of life insurance as much as it has in our everyday lives. Insurers have access to an unprecedented amount data on their policyholders—data which could determine how high or low premiums go. As with all technical advances, there are perceived positives and negatives. Let’s break down some of the key points in the discussion of life insurance tech.

Tech is poised to save lives in several ways

Passing away by a specific illness or accident is likely for everyone eventually, but just how likely (and by which things) looks set to become an ever-decreasing number. Some amazing technology such as a Star Trek-inspired portable diagnostic device is poised to make medical exams a painless and far more private process, thereby tackling one of the biggest reasons people have for not buying insurance. Self-driving cars have immense potential to significantly mitigate human error (if not remove it entirely), leading to fewer accidents and longer lives as a result.

The traditional life insurance policy will have to change its structure in a world where individuals are not only inherently safer externally but also empowered to take greater control of their personal health.  If the auto insurance market is anything to go by, tech’s huge impact on risk levels could cause a massive upset in the status quo.

While some may fear auto coverage will dwindle to practically free or non-existent (though others suggest insurance will simply change), technology certainly hasn’t made us immortal. How much will the cost of life insurance premiums drop in a future where certain risks are gradually becoming a thing of the past? It’s a question that’s ultimately in the hands of both the public and providers. If people use tech to improve their quality of life and providers leverage it to become increasingly efficient, that’s a combination that offers a win-win scenario.

AI will allow smarter, swifter life insurance claims

Artificial Intelligence (AI) may lead to more Americans being open to life insurance; a major positive since only 32 percent of them have it. A combined 58 percent either prefer AI to human contact or would be willing to look further into insurance by those means, making it a future player both in customer acquisition and in speeding up every stage of the insurance process.

AI has also been hailed as the tech that will democratize life insurance, making the process more beneficial for policyholders and providers alike. In one case, it helped an insurer provide policies for people with chronic illnesses in days rather than months. Elsewhere, it’s identifying those who are underinsured and netting providers a fortune.

AI will usher in commonplace “touchless claims”—cases where machine learning can absorb the data and decide without recourse to human processing. AI’s ability to gather data constantly could make it a real-time insurance agent, able to give advice and interact with life policy holders to gain further claims information.

The insurance community praises AI as a valuable tool in combatting fraud, strengthening cybersecurity, and offering more personalized and cost-effective coverage solutions, while guiding more efficient human behavior and faster and more effective claims processes. Conversely, constant data gathering and the digitized prodding of policy holders to act in certain ways may also have some downsides.

Technology may redefine the concept of human error

“Human error” being applied to a life insurance claim may seem absurd. After all, a human being isn’t a car crashed by a distracted driver or a home burned by a careless occupant…is it?

The answer to that question may be “Yes, actually,” as tech allows insurers to scrutinize the health of a claimant and just how much effort that person has/had made to maintain optimum wellbeing. The possible result? The dawn of more-incentivized behavior in life insurance policies and premiums.

Punishment by higher premiums for lack of self-care is inherent in a new model pioneered last year by one of America’s oldest insurers. Policy holders who meet pre-set fitness goals and log that data for transmission to their provider will receive policy discounts of up to 15 percent along with other perks.

In the long run, it’s a system that’s attractive to both policyholder and insurer; the former improves their health and lifestyle, pays less, and lives longer to pay the latter more over time.

However, these interactive policies greatly increase the role and influence of the insurer in the personal lives of their customers, which has raised privacy, ethical, and technology reliability concerns. Medical professionals have cited all three in their hesitance to utilize this type of lifestyle data to calculate any kind of insurance premium.

Human error may be further redefined by labeling some policy seekers as simply “wrong” by default. Life insurance may one day be granted or withheld based not just on family history (the health of our immediate relatives is a common calculating factor) but on our entire family trees. Far-reaching data from the human genome may qualify or dismiss a claim and make genetic testing a future pre-requisite. This type of scrutiny obviously has significant drawbacks and the potential for abuse.

The NICRIS promise is a constant against change

It’s certainly a brave new world where insurers and the public are deciding what’s an acceptable middle ground for the future of insurance. And whatever the future may hold, NICRIS won’t change our mission—to find you the most cost effective and personalized coverage solutions.

NICRIS Insurance focuses on providing clients with the appropriate suite of products to protect them, their interests and their loved ones. If you need insurance advice or would like a free, personalized insurance review, just drop us a line!