According to LIMRA research, there are about 19 million “stuck shoppers” – potential life insurance buyers who start the process but never finish. To help combat this issue, many companies are implementing simplified underwriting processes to lower costs and improve customers’ buying experience.
LIMRA finds only 15% of all U.S. households shop for life insurance in a 24-month period. Of those, just two-thirds actually get a quote for a life insurance policy. A possible deterrent can be the time consuming and complicated nature of the full underwriting process. Fifty-two percent of potential life insurance buyers said they would be more likely to purchase life insurance if they didn’t have to go through a physical exam, according to the 2018 Insurance Barometer Study by LIMRA and Life Happens.
While life insurance sales are stable, life insurers are looking for ways to better engage the 60 million households that are uninsured or underinsured. Prior LIMRA research finds 9 in 10 companies either have or are in the planning stages to develop automated underwriting programs. Additionally, three quarters of those who have implemented automated underwriting say their companies have achieved their goal of reducing the time it takes to issue a policy.
Milliman survey reveals 33 of 40 companies use or plan to use accelerated underwriting
To further emphasize how carriers are implementing automated underwriting, a broad-based survey of 40 term life insurance companies released earlier this year by global consulting and actuarial firm Milliman, Inc., found 17 of the 40 companies surveyed already use accelerated underwriting programs for term life insurance, with an additional 16 survey participants saying they plan to implement such programs.
“Carriers are currently dealing with major regulatory actions, and emerging innovations in life underwriting. These recent changes are disrupting the term life insurance market in ways that haven’t been seen for some time,” said Sue Saip, a consultant in Milliman’s Chicago office.
Oxford Life’s new InstaWrite process provides an example
Though not term life-focused, a current example of a carrier bringing a simplified underwriting solution to market would be the new, simpler and speedier life insurance qualification process introduced in April by Phoenix-based Oxford Life Insurance Company. Oxford Life InstaWriteSM is, according to the company, “a streamlined and better experience for both agents and clients. InstaWrite improves upon the traditional life insurance sales process by featuring an almost instant health assessment.”
Agents can now use the new process for all Final Expense and Single Premium Life insurance sales through Oxford Life.
“I’m proud to introduce InstaWrite to our agents,” said Mark Haydukovich, president and CEO of Oxford Life. “We understand that agents value every minute of the day, and the speed of our new life insurance sales process allows them to make more appointments and close more business.”
InstaWrite is a two-step process. First, an agent chooses to complete either an electronic or paper application. Second, the agent calls to speak with one of the dedicated InstaWrite processors any weekday for a quick health assessment. The health assessment generates a “qualified” or “not qualified” decision in a matter of minutes.
Agents will soon have the option to bypass the phone health assessment and determine qualification status for their clients online. The electronic health assessment will be available via Oxford Life’s agent portal 24-7 (to learn more visit www.oxfordlife.com).
In the latest episode of LIMRA Unplugged, LIMRA Research Director Alison Salka talks with Jim Scanlon, LIMRA life insurance research director, about the impact of simplified and underwriting. To watch the video podcast visit: The Impact of Simplified Underwriting on Life Insurance.