What does one do to fulfil their insurance needs? The majority would go to their nearest insurance agent as it would be more convenient for them, not to mention the hands-on service they could expect. However, many people have started to purchase life insurance plans directly from the website of insurance companies. With an increasing influx of online consumers, insurance companies have started investing more in technology that would assist consumers in giving recommendations for products that would exactly suit their needs. One such technology is artificial intelligence. AI has been on the rise in many different avenues and its impact in the insurance industry isn’t small.

So how does AI benefit the life insurance industry? Read on to find out. 

What is life insurance?

A life insurance policy is a type of policy in which the insurer pays a compensation amount to the family of the insured. This compensation is offered in the event of the policyholder’s sudden demise. Based on the type of life insurance the insured purchased, the amount will be provided accordingly. There are different types of life insurance plans that you as a client can purchase to provide the financial security your family deserves from life risks in your absence.

What is Artificial Intelligence?

Artificial intelligence is one of the fields in computer science and information technology which has been gaining a lot of importance in the last 2-3 decades. Artificial intelligence is a self-learning program. It keeps developing and evolving as it keeps interacting with the user on websites and applications. Based on this exposure, the program keeps giving better options and preferences that are tailor-suited to the user. Many websites even have AI chatbots that make user experience simpler and more accessible.

How does AI work in insurance?

There are a lot of factors that go into deciding the cost of a life insurance policy. Mainly, the age, health, and occupation of the customer decide how much they will pay for the policy. With the help of AI, this calculation can be made easier and more efficient. If a person is a non-smoker and non-alcoholic and works a desk job, the AI will recommend the lower premiums and a medium life cover. This is because the insurer will have to shell out less money in compensation due to the simple lifestyle of the policyholder.

On the other hand, if the person is a heavy smoker or drinker, the cost could increase due to the increased health risks in the future. AI takes all of these factors into account and gives a near accurate estimation of how long the policyholder would live considering their lifestyle and which policy they should opt for. AI also helps in estimating how much should be paid when claims are filed by the beneficiaries of the policyholder.

In claims, information related to the death of the insured has to be mentioned so that the insurer can provide the compensation amount accordingly. However, insurers do have to verify this information. If the information is found to be false, the AI calculates what could be the ideal pay-out and this amount would be presented to the beneficiaries.

Websites have a feature known as AI chatbot. This chatbot can be used to assist the customers for any queries and to provide immediate customer support to customers and people looking for more information. For example, if you are looking to get more information about life insurance premium for a specific plan, the chatbot will lead you directly to that section. If you want to check out a different type of life insurance, you will be led to that option.

Can AI make buying insurance easier?

While AI is still at the early stages in the insurance industry, its usage can change the whole landscape of the industry from top to bottom. Especially in terms of how much savings insurance companies would make from rejecting fraudulent claims and wrong policies being sold.

If you want to purchase life insurance policy on your own, you can use the life insurance premium calculator from the insurer’s website to get an estimate about the premium for your policy.