How AI Is Revolutionizing the Life Insurance Industry

Any individual with dependents in their life should buy a life insurance policy. It ensures their dependents are financially secure even in their absence. With advancements in digital technology, the number of people buying life insurance plans online is increasing rapidly in comparison to the past few years. 

The use case of artificial intelligence (AI) in the life insurance sector is a game changer for the life insurance industry. In today’s era, AI is beneficial not only for customers but also for insurance companies to streamline their systems and processes.

Let’s decode how AI is beneficial for customers as well as insurance companies.

Use Cases of AI for Customers

Wondering how AI is beneficial for customers willing to buy a life insurance policy? Let’s understand in detail:

(i) Understanding Policy Documents

The life insurance companies use various jargon and terms, such as free-look period, incontestable clause, accelerated payment of cover, etc, that are difficult for a common man to understand. Artificial intelligence platforms explain these terms in layman's language. Moreover, it can answer your questions in multiple languages, making it simple to understand.

(ii) Comparison of Life Insurance Plans

There is a variety of life insurance plans available in the market. Choosing the right plan can be a difficult task. AI platforms help you compare various life insurance plans based on the chosen criteria. Moreover, it also recommends plans that you can consider buying.

(iii) Analysis of Requirements

Every individual, such as a young professional, a retired individual, businessman, has different requirements and future goals. AI analyses your financial situation and future goals to recommend life insurance products that best align with your requirements.  

(iv) Insurance Education and Financial Literacy

There is a massive financial literacy gap in India, which is the most common reason for low insurance penetration. AI platforms educate people regarding insurance and financial tools available in the market using various media, including blogs, videos, etc. It helps people make an informed buying decision. 

(v) Assistance in Claim Settlement

A major reason for low insurance penetration is that people are sceptical about whether the insurance company will settle their claims or not. To get the claim settled, one has to contact insurance companies multiple times and visit their branch office. AI platforms assist in making the claim settlement process easier.

Use Cases of AI for Life Insurance Companies

AI-powered solutions have made the tasks of life insurance companies easier and streamlined. Let’s understand the use cases of AI for life insurance companies:

(i) Underwriting and Risk Assessment

Underwriting is an integral process for a life insurance company that assesses whether an individual is eligible for a particular policy or not based on provided information. Moreover, AI models also help to analyse the cost of their premiums.

(ii) Fraud Detection

The cases of insurance fraud are rising in India. According to a report, nearly 15% of claims made are fraudulent. The most common insurance frauds include representing fake medical documents, faking death, misrepresentation, etc. Artificial intelligence and large language models (LLMs) help in identifying fraud claims.  

(iii) Enhances Operational Efficiency

Artificial intelligence models help to enhance operational efficiency by reducing manual tasks, eliminating errors, and optimising costs.

(iv) Customer Service

AI chatbots and agents can help insurance companies in handling customer queries. They can provide 24*7 customer support and personalised recommendations to the customers.

(v) Policy Issuance and Maintaining Records

AI-powered tools make the process of policy issuance faster, ensuring accuracy. Moreover, they also help to manage and record existing policy records and customer data.

Conclusion

Artificial intelligence is a game changer in the life insurance industry by making the systems and processes more efficient and simple. It is making life insurance simpler, accessible, and more customer-friendly while helping the insurance companies in reducing risks, cutting costs, and identifying fraud. The mass-scale adoption of AI technologies and LLMs is revolutionising the entire life insurance industry.

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