In the digital age we’re used to instant gratification, but the life insurance insurance industry has been slow to adapt. Most policies still require people to fill out long and complicated forms – often on paper – before providing cover up to 90 days later. However, the recent invention of “instant life insurance” makes use of the vast swathes of personal data available on people to provide immediate cover.
What is instant life insurance?
Instant life insurance is a form of cover offered by insuretech startups and some leading life insurance firms that uses a process called “accelerated underwriting” to estimate rates and provide a quote within seconds instead of weeks To create a quote the insurance firm gathers data around the applicant from a variety of sources and runs that against an algorithm to calculate the risk of dying early.
Do instant cover providers require a medical?
Most instant cover life insurance plans do not require a medical exam. However, some firms reserve the right to request a medical exam if required. In these cases, you might be approved instantly for cover, but still need to complete a few additional steps, such as taking a medical exam, to buy the cover.
How instant life insurance works
Buying an instant life insurance policy is an online process, with applicants generally required to fill out a short form with their personal information and some questions about their health and lifestyle.
With the applicant’s permission, the insurance firm then retrieves information about the applicant from a broad array of databases, such as those which show prescriptions or driving violations. The applicants information is checked against this information, and then the application is run through an algorithm to provide an “instant” quote for coverage.
Those who apply for an instant quote will either be instantly approved for cover, instantly denied, or sometimes referred to an underwriter if there was not sufficient information about them in the databases to provide an accurate quote.
What are your chances of being approved?
Every life insurance firm uses a slightly different algorithm to decide whether cover can be provided and how much it might cost, so there is no hard and fast rule. However, in general, instant life insurance cover healthy applicants that lead healthy lifestyle and have safe jobs. If you have a pre-existing condition, a dangerous job, or a poor driving record, then a more traditional and bespoke life insurance policy may be a better fit.
Similarly, as with any insurance product it is always worth shopping around for the best rates. Some firms may deny an application, whilst others approve the very same coverage, and the rates can vary significantly between providers.
Why are all life insurance policies not “instant”?
The reason the life insurance industry has been slow to adapt to instant coverage is that people are all unique. We have different medical histories, different jobs, live in different areas, and have different futures. Technology and data mining can help insurance firms to make educated guesses about many of these elements, but truly bespoke cover can never be instant as too much personal information will be required.