How Is Technology Used in Life Insurance?
Life insurance provides for beneficiaries as part of your estate plan. Technology streamlines the life insurance-buying process. Of course, technology that aids overall insurance industry health is necessary for consumer protection.
Other People Are Reading
-
Identification
-
Consumers pay premiums to life insurance companies, in exchange for death benefit payouts made to beneficiaries. Insurers profit by growing premiums over their associated death benefits by managing risks and making investments.
Features
-
Life insurers initially employ technology to approve applicants during the underwriting process. Medical technology, alongside actuarial software, sets premiums for clientele according to life expectancy. Insurers then use information technology and financial market infrastructure to invest premium money at a profit.
-
Considerations
-
Credit rating agencies, such as Standard and Poor's, use computer algorithms to analyze specific life insurers' ability to make good on promises and claims. Consumers take these ratings into account while comparison-shopping for insurance.
Benefits
-
Technology reduces the costs of insurance for consumers. Insurance companies can use technology to protect themselves against fraud and losses. For example, medical technology can expose terminally ill patients that apply for life insurance---with the sole intent of delivering large payouts to beneficiaries in the near future.
Risks
-
Natural disasters are difficult to predict with technology, and may cause insurers to fail and reject claims.
-
References
Resources
- Photo Credit cash image by Tom Oliveira from Fotolia.com
