Life insurance is an integral component of financial planning. Life insurance policies replace lost incomes associated with untimely deaths. Technology serves to standardize the insurance process between applications and claims.
Identification
Life insurance collects premiums in exchange for making payouts to beneficiaries upon the insured’s death. Insurers profit by investing collected premiums at higher returns than future death benefit outlays.
Features
Technology is first used during the application process for life insurance. Computer algorithms calculate the risks associated with insuring your life by mining personal health and financial data. From there, the insurance company establishes premium rates. After collecting premiums, insurers may execute program trades to invest the money. Program trading relies upon computers to buy and sell investments.
Considerations
Life insurance companies do not pay claims in cases of suicide. However, insurers may attach accidental death riders that add compensation for deaths that do not result from natural causes. Medical technology facilitates autopsies that determine reasons for death, prior to life insurance claims being paid out.
Benefits
Technology improves the profitability of the insurance industry. Clients can trust that technology is being used to evaluate their cases objectively.
Financial Risks
Technology minimizes, but can never eliminate all risks. Natural disasters that expose insurers to losses are impossible to predict.
Technology and the Life Insurance Industry, Sources:
Bureau of Labor Statistics: Insurance
Bureau of Labor Statistics: Insurance Underwriters
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