Aviva has also offered a similar product – Simplified Life Cover, launched in 2006 – to provide a faster and easier way to purchase level and decreasing term assurance.
Cover simplification
While the concept has been around for some time, AIG Life has recently reignited discussions with the launch of its Instant Life product. This is a level-term assurance product, which enables advisers to apply for cover and receive a decision in less than eight minutes without the need for medical evidence, thanks to its shortened set of questions.
The application process is online and can be completed by advisers or clients on a desktop or any mobile device. Once completed, the adviser will be notified of the outcome to enable them to arrange cover.
AIG has modified the product in a number of ways in order to offer this streamlined application process without exposing itself to additional risk and having to bump up the cost of cover. It is only available to clients up to age 55, and the maximum sum insured is £600,000 for applicants aged 17-45 and £350,000 for those aged 46-55.
In addition, it has also stripped out the waiver of premium and guaranteed insurability options. Respectively, these options pay for cover to remain in force if a client is unable to work due to long-term sickness or disability, or enable them to increase cover without further underwriting in the event of everything from marriage and birth to promotions and larger mortgages.
Nick Erskine, head of intermediary sales at AIG Life, says: “These additional options do add to the cost of life insurance, whether someone uses them or not. We also found that few people actually use the guaranteed insurability options anyway, so as long as advisers make it clear these options are not included, the removal is not a major issue.”
Data-driven decisions
Royal London is developing solutions for advisers looking for more time-efficient life insurance application processes.
Rather than simplify the product, its streamlined mortgage protection – which is available through London & Country – uses advanced machine learning algorithms to simplify the underwriting process. Royal London then uses data collected in the mortgage-advice process with the answers to just six additional questions – three medical and three lifestyle – to provide a quote.
All customers receive an immediate decision, with around 80 per cent accepted. Those who are not accepted at this point can be referred for full medical underwriting so the risk can be assessed more thoroughly.
