Are You Covered?

AuthorGreenberg, Brian
PositionDOLLARS & SENSE - Life insurance

THE SHOCKING life insurance coverage gap, as exemplified by a Foresters Financial study revealing that nearly half of all Americans do not have any form of life insurance whatsoever, begs the question: what can possibly turn the tide to ease and expedite a consumer's ability to secure this all-important protection?

Actually, the groundwork is being laid for big shifts in the life insurance landscape, and consumers can take advantage of some notable game changers:

Variable rates and fitness trackers. With the pervasiveness of fitness trackers and health apps, it only was a matter of time before the data they produce made its way into the underwriting process. Policies with variable rates based on fitness data were brought to the forefront of the industry in 2016 by a forward-thinking provider, using the data from insureds' fitness trackers to adjust rates and premiums. While the program started out as voluntary, it now is standard with all life insurance policies written by this particular provider.

The program even offers perks such as a "free" Apple Watch (subsidized by premiums and participation in the program), discounts on other fitness trackers, and deals for healthy lifestyle publications. On the downside, the program requires a lot of upkeep to submit data through the company's proprietary app, and premiums can increase for those people who do not realize improved health based on submitted data.

My company ran a 2018 survey finding that most insurance consumers were not receptive to sharing fitness data, even if it meant getting better premiums. Despite this, programs have reported successful results. This trend will continue to grow as new policy players put their hat into the ring.

Agentless solutions. While some life insurance purveyors use fitness information to try to offer better rates, others in the industry are looking for ways they can cut out the middlemen--even within their own companies.

Many are turning to agentless solutions, which utilize information available from other sources, such as financial, medical, and prescription history to accelerate the underwriting process. This move toward automated underwriting is great for insurance companies looking to streamline their workflows and trim the amount they are paying in commissions. This operational efficiency can factor into consumer-side savings.

The downside is that it makes life insurance much harder to get for unhealthy people. These agentless solutions are more...

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