AI Driven Personalized Life Insurance Premiums; Aye Or Nay ?

wealthymttersThe mortality risk is not the same across different sections of the population.So one of the ways in which life insurance companies have traditionally competed is by restricting their offerings to people who have lower risks of dying early and thus keeping premiums lower and/or bonuses higher.The classic example is the Postal Life Insurance plans of the past that were offered exclusively to government servants vs similar plans of the LIC that were open to all. In moreĀ  recent times,insurance companies target the more educated, affluent, urban ,financially successful professional/managerial class with better living standards and access to world-class healthcare.

Insurtech powered by AI can increase the ability of lifeĀ insurance companies to make fine distinctions in mortality risks, resulting in more risk classes .So one of the merging trends in life insurance is the increasing number of risk classes as insurers seek to better match risk with premiums.Thus in theory, rather than dozens of risk classes, thousands of risk classes or even lakhs of risk classes are possible. In fact if the AI is astute at risk classification, its possible that each policyholder would be in his/her own risk class. In other words, we would have personalized premiums,designed and calculated on a custom basis for each insured person. Read more of this post

Online Term Plans

Online Term PlansIf wealth building,wealth protection,estate planning,legacy planning,cash management etc. are not priorities,then an online term plan is probably the best life insurance product you can purchase.

At long last,the LIC has come up with its own online term insurance plan.The premium as you can see is on the higher side.

Obviously lower premiums are the way to go.But before you decide anyway,go over the exclusion clauses to ensure that all situations that can possibly apply to you are covered,else you will be purchasing an umbrella with holes.Also be certain that if your insurer has been around for more than 10 years,the company has a settlement ratio above 90%,else you are likely entering into a vital contract with a less than reliable partner.


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