With the New Year already in full swing, it is important to be aware of several significant trends and changes in the life insurance industry. Many of these additions and trends are beneficial to both parties.
The biggest reason for the change in direction for the life insurance industry has been technological advancements, which has altered the way consumers shop for insurance needs. Insurance companies had to quickly adapt their business practices to meet these needs.
While some consumers may still prefer the traditional approach to shopping for life insurance, many consumers are seeking new methods that fit into their fast-paced life.
Below are some examples of trends and industry changes that you may see in the life insurance industry in 2017:
Quick, Easy Policy Process
Nowadays, people want immediate results and typically avoid situations that require a substantial amount of time to accomplish. This mindset can be applied to the life insurance industry, as potential customers want to avoid lengthy underwriting periods.
This year, insurance companies are hoping to satisfy this need by gearing away from the traditional paper application that is mailed to and from the client.
Many of the top carriers are moving towards more digital options, which includes delivering the policy electronically. A shift in this direction means policies will be issued to the client at a fast rate and will drastically cut down on the underwriting time.
However, with the use of technology becoming a prominent method for an insurance company, make sure your computer is free of any viruses and all of your personal information is properly stored.
No Need to Meet Face-to-Face
As mentioned above, insurance companies are shifting away from the traditional in-person, paper application to a faster approach that allows customers to complete the entire process from their home. In the past, customers were required to sign applications in-person, but now companies are allowing individuals to sign the application electronically.
According to a recent LIMRA report, about 50 percent of consumers prefer to buy life insurance without a face-to-face meeting. This is a win-win solution for insurance companies and their clients, especially among young, tech-savvy individuals.
No-Medical Exam Policy
In order to confirm the health status of an applicant, insurance companies will require a medical examination to get a full health history. Information uncovered in the medical exam will be used to determine the premium rate class of the prospective client.
Unfortunately, this method is not too popular among some individuals. Some have difficulty fitting it into their work schedule, some are afraid of examinations, some do not want to bother with the process or some have health conditions that may warrant them uninsurable.
The good news for those individuals is that they can still apply for coverage with a “no medical exam” policy that completely skips over this process. Generally speaking, the maximum benefits amounts are often under $400,000 and are considerably more expensive than the traditional medical exam policy. Read more about non-medical life insurance here.
Price Drops Due to Technology
According to LIMRA and the Life Foundation, about 80 percent of consumers will research online before purchasing a life insurance policy, as many websites offer price comparison search engines. This is especially true for individuals shopping for term life insurance because there are fewer elements to these policies than whole life.
Price declines are due to a number of factors – including direct competition among insurance companies, lower administrative costs, longer longevity and decreased amounts of life insurance claims. All of these factors – in conjunction with price comparison search engines – means lower life insurance rates for consumers.
However, be cautious when you are searching online for life insurance rates, as often times the Preferred Plus health class is displayed. It is important to note that not everyone qualifies for this low rate class.