Has insurtech made the life insurance claims process better?

Unsurprisingly, the filing experience is now a lot smoother due to digital and tech advances.

There are certain inevitable things a lot of us have to face: going to the DMV, serving jury duty, and understanding how to file a life insurance claim. Luckily, 21st-century advances in technology have made the process a lot more streamlined and easy for a policy-holder and beneficiary to understand. Let’s discuss how the use of A.I. and automation can make this journey easier for both the customer and their family.

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The traditional way of filing a life insurance claim

When someone buys a life insurance policy, they usually designate a beneficiary – someone nominated to receive the proceeds of their policy (usually a lump sum payout). 

Traditionally, the beneficiary would contact the insurance company where they’d be instructed to fill out a claims form. After submitting the form, the death certificate and possibly the original policy paperwork, a claims specialist would carry out a standard investigation to rule out fraud. If the claim were to be approved, a life insurance payout would be sent between 30-60 days (though different companies’ payout dates may vary).

This conventional and long-standing way to process a claim could be frustrating to the beneficiary. Not only is filling out and submitting paperwork time-consuming, there’s also the possibility of having to wait one or two months for a payout.

How has tech made the claims process quicker?

Life insurance companies understand this grievance. They realize that using technology, aka insurtech, could provide a quicker, more efficient way to file and approve claims. They use automated systems that “read” or extract info that’s pertinent to a claim. There are a couple of specific ways they do this. Get ready for some techie jargon.

Robots speed things up

RPA (robotics process automation) systems are literally robots that emulate human intelligence and actions that interact with digital software. Insurance companies have been able to decrease the time it takes to process a claim by using automated intelligence. They can do anything from validating the death certificate on a government website to submitting the claim for approval. Because it reduces the need for human labor, it speeds up the process. 

AI analyzes data

Similarly, AI (artificial intelligence) can analyze data at groundbreaking speeds in minutes versus days or weeks. They are also used in communication systems like chatbots, which are available 24/7 and can give responses to basic questions about your claim. And if the paperwork is submitted, they can even process and approve a claim within minutes. AI can also be helpful in detecting life insurance fraud and scams.

The role of multi-channel communication and claims

Both the policyholder and the beneficiary want to feel as if they have a trusted relationship with the life insurance company. When having to interact with a claims specialist or the company in general, having a variety of ways to communicate is key. 

In case the definition of multi-channels isn’t self-explanatory, it refers to having a variety of ways a customer and company communicate. Whether it be through online chat, email, text, or social media, a customer or beneficiary can ask questions about their claim and talk about their concerns. In turn, the claims specialist can get in touch with the customer or beneficiary to update them on the status of their claim. Having an on-the-go digital experience, will enhance and make the process that much easier and quicker.

Using blockchain technology

Blockchain technology is basically a huge database that stores a lot of detailed information. Similar to AI, the use of blockchain technology for insurance claims will help detect fraud on a larger scale. It was initially used as a means to distribute cryptocurrency for Bitcoin, but its secure database is now a valuable source for life insurance companies, specifically in verifying information on a claim.

The benefits of blockchain in insurtech and life insurance can be significant in terms of ease and security.

Because the blockchain database is more extensive than the typical database a claims agent might have, it’s able to dig up previous data and discover if there’s been scam-like activity in the past. Third-party documents can be found quickly, instead of a human having to do research on a policyholder. Once there is no fraudulent behavior detected, the claim can go through the approval process.

An easy path to a payout

RPA, AI, and multi-channel communication all work together to make the claims process and communication as smooth as possible for the beneficiary. The use of blockchain databases allows the policyholder and life insurance company access to a vast amount of info, including info that leads to fraud detection. In addition, traditional customer service reps also incorporate tech when they work with people to be able to provide a human connection to the customer and the beneficiary.  

Both the customer and beneficiary want to make sure that the path to receiving a life insurance payout is as uncomplicated as possible. While the death of a loved one is difficult, the use of technology makes the claim process much more seamless.

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