The Effect of Information Technology on Life Insurance
A Insurance Article Contributed by Kiran
The Size of the Life Insurance Market
Everyone knows that the world's population has grown exponentially over the last two decades. It is with this huge and sudden growth in population that the business of life insurance has grown tremendously as well. What was just a figure of three billion back in 1970s is now nearing six billion. This represents a gold mine for life insurance firms - their aim being one policy for every individual, no matter what the age.
Now, imagine filling up a form for each and every person and filing it, only to be retrieved later to update its contents. It would certainly be a Herculean task. Not to mention the fact that in today's world, we are always on the go and could be transferred anywhere, anytime. To update this info into our life insurance policy would be an even more larger task.
The Advent of Computers in Aiding Life Insurance Firms
With the advent of the internet and exponential growth of the computer technology, it is now possible for a person who holds a life insurance policy to make changes to it at the press of a button on the computer.
Not to mention the ease at which premium calculations and payback can be arrived at instantly. Also, the magnitude of the choices available can be easily arrived at and presentable graphs and pie charts can be handed over to the prospective client, taking into consideration his age, health, etc.
The computers and internet have been a back bone to the insurance sector who require plenty of permutations and combinations in their policies to arrive at their profit level. This is not to say that it could be done manually, but as shown earlier, the sheer quantum and size of work has increased tremendously that sitting manually and working on it would have lost an agent the time required to get probably two more sales in that day.
The Role of IT in Life Insurance
The role of IT has penetrated more than just the office works that go into the sales and marketing of the life insurance policies. You can see its effect in the realm of your medical checkups, that use sophisticated machinery to check your health. This usually means that what would not have been detected by the naked eye before, would now be detected and put your life insurance policy into jeopardy. (Remember, an insurance policy would not be effective if it's shown that you are suffering from a certain disease/disability)
Having said this, and with the advance of IT in all fields of life and office, life insurance firms are now on the war path to improve its own infrastructure. This would mean that past records of a prospective client can be retrieved easily from the data banks available at its disposal, such as the hospital records, office records, etc. By doing so, the life insurance firm is safe guarding itself from clients who knowingly submit false documents to make a fast buck, resulting in the insurance firms having to make huge financial pay-outs.
