Life Insurance Applications: A Better Way

By Yunus Burhani, Senior Software Architect, X by 2

Toronto, ON (May 11, 2017) – Like the rest of the insurance industry, life insurers are racing to become more innovative as a way to improve the overall customer experience. While it’s fair to say that life insurers are lagging behind the health and property and casualty verticals when it comes to innovation and customer engagement, there still are inroads being made. That said, there’s room for a lot more improvement. One example of this, and one that touches a potential customer directly, is the initial application process for life insurance.

Over the years life insurers have tried many approaches to enhance the buying experience for customers, but with little success. However, life insurance is still unique enough in terms of underwriting information that it requires potential customers to engage with an agent in order to find the right product for them. For better or worse, it is not as easy as buying auto insurance online – a process that is for the most part automated across the personal lines space and is widely accepted by consumers as the process for acquiring that insurance. However, a typical life insurance company sells a number of complex products, each with its own pros and cons that need to be carefully evaluated on an individual customer basis. In many respects it is more akin to investing money in financial sector products, which often requires engaging a broker, a certified financial planner, or some other financial expert.

That’s why the life insurance application process – and transitioning that to the underwriting process – continues to be an issue for most life insurance companies. Some of the issues that typically arise during the process are:

  • The application is not fully filled in by an agent.
  • The insurer’s web application is too strictly edited for required information so agents often try to avoid filling them out online and submits paper application.
  • Not all the necessary underwriting requirements could be fulfilled because some application forms are not completely filled out.
  • The scheduling of evidence vendors are not set at the time of the application, so it becomes difficult to reach out to a potential customer afterward.
  • Applications are not signed electronically so insurers and consumers have to wait for wet signatures to occur.

These seem like relatively simple problems to overcome, but despite the perception they persist in the life insurance industry. So in a world growing increasingly accustomed to instant information and response gratification, life insurers run the risk of being perceived as backwards from a customer service and technology perspective, and with some justification.

For example, while the quoting process for life insurance is pretty straightforward and does not require much data entry from a potential customer, once the potential customer agrees to the quote, the application process typically takes a long time and requires an extensive amount of data entry. Depending on the number of potentially insured’s seeking coverage, the list of questions could easily go for an hour or two. This requires the customer(s) to take time out of their busy schedules in order to visit an agent’s office, often for an extended period of time. Further, some of the questions on the application require the agent to physically see potential insured’s, thus eliminating the option to have the conversation over the phone. A further complication can occur when some of the questions asked are HIPAA sensitive in nature, sometimes leading to awkward situations for potential insured’s when they are required to answer such questions in front of others.

Given all of that, the question is what can be done about this cumbersome application process? One possible approach would be a hybrid one that would allow the agent and the potential customer to each complete a part of the application. In this approach, an agent can initiate the quoting process over the phone, since it does not require lot of data to be entered. Once the customer agrees with the quote the agent can schedule a thirty-minute office interview with the customer to narrow down the possibility of life, health and annuity insurance products and better explain the best options for customer. During that same visit agent would initiate the application process electronically, and once they completed their portion send it electronically to the customer to complete the rest.

As part of this self-serve approach, an evidence vendor scheduling system can be integrated allowing customers to schedule their exams appointments online. In the case where the insurer and/or local regulation requires the agent to be present when the customer signs, this suggested approach still makes it easier as the agent does not have to spend the time asking all the involved parties medical questions individually. The parties could be given tablets or use their cell phone to answer those questions in a lobby just like what occurs in a doctors office today. Once the signature is executed – either in person or electronically – the executed application can be forwarded to the insurer to initiate the underwriting process.

Such an approach would significantly streamline the application and underwriting processes for the life industry by providing customers a convenient way to apply for a policy without having to sit in front of an agent for a long time answering questions about their medical and financial histories. This application process also has the potential to speed up the new business and underwriting process for insurers, since they do not have to deal with incomplete applications, or applications coming in without a signature. They would also know that all the underwriting requirements have been ordered during the application process, and as a result would not have to bother with calling customers to schedule an appointment, or sending application information to evidence vendors so they can call the potential customers. Finally, since this streamlined application process does not allow agents to fill in all of the customer information (almost always erroneously), it will reduce the amount of paper applications received by insurers greatly, which will eliminate the burden on the New Business department to key in paper applications before any underwriting starts.

There’s an old saying that first impressions – good or bad ones – tend to stick with people. In today’s rapidly changing insurance environment, life insurers should be motivated to put their best customer service foot forward by making it as easy and simple as possible for potential customers to navigate the application and underwriting process. Any life insurer who fails to do so could find themselves losing potential new customers to their competitors.

About the Author

Yunus Burhani is a senior software architect with X by 2, a technology consulting firm in Farmington Hills, Mich., that specializes in IT transformation projects for the insurance industry. His expertise includes enterprise architecture, service-oriented architecture, agile methodologies, web services, application architecture, integration and data. He is a graduate of Wayne State University.

About X by 2

Established in 1998 and based in Metro Detroit Michigan, X by 2 is a technology consultancy focused on the practice of architecture in the insurance and healthcare industries. Whether P&C, Life, or Health, X by 2 knows the insurance business and has proven experience planning and delivering core insurance systems, business applications, and enterprise integrations. For more information, visit

Source: X by 2