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By
John McFarland
The life insurance industry is experiencing a technological revolution. Advanced insurtech tools are reshaping traditional underwriting processes, creating efficiencies for carriers and advisors while improving client experiences across both primary and secondary markets. Financial professionals who understand and leverage these innovations gain significant competitive advantages in an increasingly digital marketplace.
Primary Market Evolution: From Application to Policy Issue
The primary life insurance market has historically been burdened by lengthy underwriting processes that “involve multiple layers of review, including medical exams, lab tests, blood draws and detailed documentation,” writes Matthew Stull, director of data science at LexisNexis.
Modern insurtech solutions are streamlining this journey through several key innovations:
- Algorithmic Risk Assessment
Advanced algorithms now analyze thousands of data points to evaluate risk profiles with remarkable accuracy. These systems incorporate traditional medical factors alongside non-traditional indicators like prescription histories, fitness tracking data, and lifestyle indicators. This comprehensive approach often yields more nuanced risk assessments than conventional methods alone. - Accelerated Underwriting Platforms
New accelerated underwriting programs leverage data analytics to fast-track applicants. These platforms can qualify suitable candidates for coverage without invasive medical testing, reducing the application-to-issue timeline from weeks to days or even hours in some cases. For advisors, this means faster commissions and higher client satisfaction. - Real-Time Health Data Integration
Wearable devices and health monitoring systems provide continuous streams of client health data that, with proper consent, can be integrated into underwriting decisions. This shift toward dynamic risk assessment allows for more personalized pricing and potentially rewards clients who maintain healthy lifestyles with preferred rates. - Predictive Analytics in Mortality Forecasting
Machine learning models have dramatically improved mortality predictions by identifying subtle patterns in vast datasets. These tools help underwriters detect early indicators of health concerns that might otherwise be missed in traditional evaluations, leading to more accurate pricing and reduced carrier risk.
Secondary Market Transformation
The secondary market for life insurance is also in the process of being transformed by insurtech innovations. These tools are creating more transparent, efficient workflow and transaction processes.
First, we are now able to obtain more advanced life expectancy calculations. Sophisticated algorithms now evaluate longevity with unprecedented precision by combining medical records with socioeconomic factors, lifestyle considerations, and treatment advances. For settlement providers and advisors working with senior clients, these improved calculations lead to more accurate policy valuations and fair offers.
Second, we are achieving important efficiency gains through the use of automated policy management systems. Digital platforms now track premium payments, policy changes, and carrier communications for in-force policies held by settlement providers. These systems alert stakeholders to critical deadlines and changes that might affect policy value, preventing costly lapses through automation.
Third, insurtech innovation is leading to the development of true market intelligence platforms. New data analytics tools provide real-time insights into secondary market trends, helping advisors identify optimal timing for settlement considerations. These platforms aggregate transaction data across the industry, giving professionals crucial benchmark information for client discussions about policy monetization options.
Strategic Implications for Financial Advisors
Several strategic considerations emerge from this impact of insurtech on life insurance underwriting for financial advisors:
- Client Education Is Essential
Many clients remain unaware of how insurtech has transformed both insurance applications and policy valuations. Advisors who clearly explain how these tools simplify processes and potentially improve outcomes build stronger client relationships anchored in technological expertise, as well as educate these clients about new insights that can now be surfaced regarding the value of their life insurance policy in the secondary market. - Value of Personal Guidance
The emergence of new technology aids further illustrates that the most effective strategy typically combines technological efficiency with personal guidance. Automated underwriting platforms excel at processing routine cases, while advisors provide crucial support for complex scenarios that benefit from professional judgment.
- Continuous Learning Is Non-Negotiable
The insurtech landscape evolves rapidly. Advisors who commit to ongoing education about technological developments position themselves as valuable resources in an increasingly complex marketplace. For example, we can expect further integration of insurtech throughout the insurance lifecycle: Artificial intelligence will likely play an expanded role in claims processing, policy service and premium optimization; and genetic information, while currently restricted in underwriting, may eventually become more prominent with appropriate regulatory frameworks.
Find Experienced Partners
The message for financial advisors is clear: Embracing insurtech tools is no longer optional but now essential for continued success. Those who leverage these innovations thoughtfully will find themselves well-positioned to deliver superior outcomes for clients while operating more efficiently in both primary and secondary markets.
The only way to obtain these insights is to partner with a provider of insurtech services that are custom-designed for life insurance policy management.
NSurTech Solutions revolutionizes life insurance management with a software platform that was developed with cutting-edge technology and industry-leading security. The platform transforms life insurance planning by empowering financial advisors with data-driven insights to hep mitigate risks, identify opportunities to maximize policy value, and explore liquidity options with their clients. For more information, visit www.nsurtech.com.