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3 Top Trends in Life Insurance 2023

Americans want to learn more about life insurance. Last couple of years the interest in life insurance has greatly increased, mainly driven by Covid-19. 60% of millennials say they need more education on life and health insurance.

updated last on February 28, 2023

Life insurance trends 2023

Indeed, a good life insurance industry overview, it’s one of the last to embrace digital technology, but it is better late than never. The good news is that different insurance providers are now bringing their policies online to reach more consumers, especially the new generations of insureds. With the use of digital trends, it can streamline the old and time-consuming process and cut the cost.

The call for a new usual way of living without the need to do a face-to-face transaction is a necessity nowadays. Today, more and more insurers are now selling directly to their customers online. This change is a huge advantage for them because they can save a considerable amount of money from paying commissions to agents.

Insurance technology trends 2023

This new technology is called AI or artificial intelligence. This specialized program can pull out vital information, both private and public, like credit reports and other important documents to quickly issue a policy without time-consuming medical examinations. However, it is not suitable for applicants with bad credit records, as it can primarily affect the rates that they need to pay for a monthly premium.

One of the newest life insurance industry trends 2023 is the introduction of accelerated benefit riders. It is living benefits that insureds can enjoy while they are still alive. Insureds can now withdraw their funds from the policy with a diagnosed terminal illness and get this insurance coverage at a competitive price.

Three new amazing trends in insurance

1. Life Insurance Online Selling, Application, and Approval

Insurance providers are now using modern technology known as Artificial Intelligence to offer insurance policies online and speed up the approval process. The entire process can happen without the need for a middleman or agents. Companies can save a tremendous amount of money from cutting off the cost of paying agents and pass the job to an AI technology. Companies are now targeting the new generation applicant or the millennial that are now spending most of their time online. Two of the industry newcomers are Assurity Life and the Savings Bank Life Insurance that are very aggressive in selling policies online.

Assurity Life is becoming the leader in providing online applications for no medical life insurance coverage. One can access their products through the website at coachbinsurance.com. This year, there is a tremendous increase in insurance applications online because people are forced to stay in their homes. The only drawback for insurance providers is that they need more cash reserves. Companies are facing a higher risk when it comes to an online application and no medical exam application.

2. Credit Report as Part of the Risk Assessment

It is good to know that insurance providers can now take advantage of the service of companies offering digital data like the LexisNexis Risk Classifier. The company collates information and data from credit records, driving records, public records, medical records, etc. into one database. All information that insurers can get from LexisNexis can aid in assessing an applicant’s risk level. Applicants should now build a good credit history by avoiding bankruptcy, tax liens, foreclosure, and low credit rating if they want a competitive rate for their future life insurance policy.

One of the leading providers, the Savings Bank Life Company, is now using LexisNexis’s technology to offer faster application and approval when it comes to the life insurance application process and reduces the overall cost of underwriting. This technology is a new data gathering method, and not all insurers are open to this type of online application process. If you are eyeing a particular provider, but they are not available online, you can contact an independent insurance agent who will direct you to your choice.

3. Latest Trend for Accelerated Benefit Riders

Traditional life insurance is losing when it comes to sales because more and more people are discovering the benefits of getting living benefits that they can enjoy while still alive. If you own traditional life insurance, you can choose to add the benefit rider. With this type of life insurance coverage, the insurer will give all or part of the policy proceeds to the insured base on a specific set of guidelines.

Most of the common event that can qualify an insured to acquire money from their policy is in case of a terminal illness, an accident that requires long term care, or an incapacitating medical condition. The insurer will take away the amount from the death benefit.

Today, hundreds of insurance providers are now offering their version of accelerated benefits. Most companies are offering it in addition to the current life insurance policy. There is a low chance of usage, and the payout is limited to the amount of coverage. This benefit rider is the latest trend for new age applicants because of the selling point that one no longer needs to die to reap life insurance benefits.

Life insurance ownership

According to the latest life insurance statistics limra has to offer, life insurance ownership is rising. Nearly 90% of Americans now have life insurance coverage in place. This rise in ownership is partly due to more Millennials entering the market and a renewed interest in the importance of having a financial safety net for one’s family and loved ones. With this increased demand comes an array of new life insurance products that offer specialized coverage and customization options.

Life insurance companies

As the life insurance market continues to expand, so too is the ability of carriers to leverage new technology. This includes AI and data aggregators, which can generate more accurate risk assessments and make speedier underwriting decisions. In addition, many companies now offer digital customer support systems that make it easier for individuals to find solutions tailored to their needs at lower costs. These innovations have extended the reach of life insurers, enabling them to serve more customers and offer more excellent protection for families.

Insurance reports

Best’s Insurance Reports is an indispensable resource for understanding the creditworthiness and financial strength of life insurance facts and statistics at insurance companies. It offers the details and analysis behind Best’s Credit Ratings, the latest financial data and company information, along with tools and features to enhance your research.

Top trends in life insurance research

The Center for Insurance Policy and Research provides data and education to drive discussion and advance understanding of insurance issues among policymakers, insurance commissioners and other regulators, industry leaders, and academia. It conducts research and provides analysis on important insurance issues. Through this work, the Center drives dialogue and action on today’s insurance issues.

Future of Insurance Industry

Artificial Intelligence and its related technologies will have a seismic impact on the insurance industry. Everything from distribution to underwriting and pricing to claims. Advanced technologies and data affect the way distribution and underwriting take place. With insurance policies being priced, bought, and placed in near real-time.

The customer will see the experience of purchasing insurance is faster, with the insurer and the customer having less involvement. There is enough information known about individual behavior that AI algorithms create risk profiles so that it will shorten cycle times for completing the purchase of an auto, commercial, or life policy.

Insurance carriers will reduce it to minutes or even seconds. Several carriers have enabled instant quotes for some time. Still, they will refine their capability to immediately issue policies to a wider range of customers as telematics, and in-home Internet of Things (IoT) devices proliferate and pricing algorithms mature.

Many life insurance carriers are experimenting with simplified issue life products. Still, at this time, they are restricted to only healthier applicants and are priced higher than a comparable, fully underwritten product. As AI permeates life underwriting and carriers can identify risk much more granular and sophisticated, you will see a new way of mass-marketing instant issue products available online.

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Frequently Asked Questions

What is the most significant trend affecting the insurance industry?

The most significant trend affecting the insurance industry is the growing need for digitalization and technology advancements. Automation and digitization have become increasingly important due to new customer demands for products and services and increasingly complex regulations. Companies are investing more in data science and analysis to improve customer service and developing innovative AI-based technologies and tools to provide quick, accurate, and personalized services.

What is the life insurance outlook for 2023?

The life insurance outlook for 2023 is expected to be positive as the industry continues to grow, driven by technological advances and increasing consumer demand. Life insurers will focus on modernizing products and services, introducing new offerings tailored to customer needs, offering accessible digital platforms, and leveraging data analytics to improve decision-making. Innovations in financial technology (fintech) will also shape the industry's direction, potentially transforming distribution models and providing more personalized products.

Which type of life insurance policy is growing in popularity?

Universal life insurance policies have become increasingly popular due to their flexibility and cost savings. These policies are designed to provide permanent coverage with an adjustable death benefit and the possibility to save funds on a tax-deferred basis. Premium payments can be set as fixed amounts or flexible, allowing policyholders to adjust their coverage as their needs change over time.