Artificial intelligence is one of the most sought-after technological advancements in recent history. It is the concept of creating software and machines that can think independently and evolve based on their experiences. The idea is to combine digital infrastructure with human-like instincts. Due to the novelty of the idea, there are endless applications for this technology. Some of them include improving communication through better smartphones, improving, and creating medical procedures. The overall reason that people want artificial intelligence is that it offers them convenience.
One example of applying artificial intelligence to life insurance. It can make life insurance companies better at analyzing different parts of life coverage. This, in turn, means that customers could get better insurance products and a higher level of service.
How AI can help with life insurance premiums
The place in life insurance that artificial intelligence can do most in is deciding the premium. It can help insurance companies assess the mortality risk of a customer better. This is because the premiums that insurance providers offer you is highly dependent on your mortality risk. But insurance providers often have a hard time matching the right amount of risk with the right amount of premium. On the other hand, AI is very smart at measuring and classifying risk. Hence, with AI, you may end up in a risk class of your own. This means that the premium calculations for you would have to be unique. This, in turn, means that you would have a personalized premium to pay for the right amount of coverage.
Should you buy life insurance with personalized premiums?
There is no straight answer to whether you should buy life insurance that has personalized premiums. The right thing to do here depends on what your insurance needs are. Whether AI is involved or not, you have to focus on the features of life insurance, which remain the same. The only thing that may change is the amount you are getting your coverage for.
The base purpose of life insurance is to make sure people feel at ease and prepared for two possibilities. The first is their sudden death. If you are the breadwinner of your family, your death has more than just an emotional impact on your family. There is also the huge worry of how they will fare financially in your absence. The second possibility is not having dignity and financial independence in your retirement. As an added goal, many people wish to leave something for the next generation. The benefits that life insurance offers make sure that all of these goals are met. Hence, the only thing you need to check is whether the AI personalized premiums affect your path to these goals. If they don’t, it is better to have a premium that matches your risk profile.
Would AI personalized premiums be lower?
While there is all this talk of how AI would be a great way of setting premiums for life insurance, the question that concerns many customers is would they get lowers premiums. Well, until the use of AI to determine premiums is a common practice, there is no way of answering that question in a definite manner. However, many insurance experts believe that premiums determined through AI will be lower. This might be especially true for some types of life insurance policies like term insurance. With plans like term insurance already having lower premiums, using AI to determine premiums for them could be the best thing that prospective life insurance buyers could hope for.
Life insurance is a product that is constantly evolving. The idea of having AI-driven life insurance premiums is the perfect example of that. However, there may still be time for the idea to become a reality. Meanwhile, you need to make sure that your family is protected against any unfortunate event. So, look for an insurance policy that offers you good protection at an affordable price and buy it.
