In today's time, digitalization has taken over almost every aspect of our lives. From groceries to transportation, everything has become highly smooth with digitalization. So, why not insurance policies?
The question is straight and the answer to this question is more straight- for your convenience. Today, digitalization is a very important feature in life as well as health insurance. Some numerous apps and wearables are available and provide great online offers and many automated solutions as well.
Although most of the procedures in insurance operations are paper-based and still handled manually, that’s why there still is a long run for insurance policies toward digitalization. Life insurance plans faced tons of challenges in digital processing.
Especially in times of global pandemic, digitalization has gained massive progress and many sectors have completely transformed their operations through tech options.
Benefits of Digitalization in Life Insurance Policies
Usually, insurance policies always fall under the threat of security risk, similar to any investments. This causes major inconvenience and trust issues for the insurance buyers. To deal with this, the digitalization of Life Insurance Policies is very important. We have discussed the importance and benefits of the digitalization of Life Insurance Policies down below:
1. The easy portability of Documents: The portability of Documents is considered the biggest advantage of digitization in Life Insurance policies. You can easily keep the e-copy of the digital policy documents. Usually, managing the documents becomes pretty hectic, especially for the policyholders. And because of such hassle, they end up losing important documents such as premium receipts, cards or any other.
The period range of Insurance policies is always more than 5 years and managing the documents for such a long period does sound tough, yet very important.
But with digital policies, you can easily preserve the documents in the form of e-copies as they are stored in cloud-based data servers.
2.No KYC needed for policies: Another great benefit of digitalization in life insurance policies is that, for new policies from the same company, you do not need to provide the KYC documents. The reason behind this is customers’ KYC data is stored in the company’s repository. So, for opting for a new insurance policy from the same company, they need to overwrite the digital application form by caching the data stored in the company’s repository.
3. Improve customers' experience: Usually, in offline insurance policies, when customers come with any queries, they are sent away by giving a later date and time. Because of this, their queries are not resolved immediately and customers face issues with the insurance company or policy. The reason they give for such delay is, that they are connecting with the back-office team for discussing the query.
But none of such delays and issues occurs with digital management. As they provide the customers with essential information right away just by tapping on a button. With digitalization in life insurance policies, customer queries, tracking customer requests, generating premium calendars, claims, and online payment of premiums are processed at a faster rate and handled very smoothly.
4. Financial Efficiency: With digitalization in life insurance policies, along with the insurance providers, the buyers as well experience convenience with the transactions. Also, it can benefit the buyers by saving up to 35-40% of the marginal difference. Now the question is, how is this possible? The answer is simple: when a buyer purchases term insurance, they prefer a broker or an agent for this and because of this, the agent or the broker benefits by around 30% profit from the insurance amount. But with the digital processing of insurance policies, you do not need an agent or broker to facilitate the process and because of this only, you can save the commission amount.
Difference between Life Insurance and General Insurance
Speaking of insurance policies, it's very essential to understand the difference between life insurance and general insurance.
We have presented this table for better understanding:
Terms
Life Insurance
General Insurance
Coverage
Covers life
Covers all the assets, except life
Payment of assertion
Paid in case of death to the nominee given by the policyholder
Can be compensated during any eventuality
Components of savings
Present
Absent
Term of contract
Premium payments for several years as the duration of the contract is usually long
Annual contract available, and have to renew every year
On a broader note, the difference between life insurance and general insurance policies is that life insurance covers all your life plans and provides savings and investment avenues. These savings act as a benefit on maturity. But in the case of general insurance, all the Non-life assets are covered but do not provide provisions for savings or investment avenues. The difference between life insurance and general insurance is very precise and clear. And these two when combined covers all aspects of life.
Marketing approach
In order to survive in the hurdles of today's market, it's essential for Insurance Companies to build a strong digital presence. The market has become intensely competitive with industries opting for different tactics to win over more customers.
For any customer's focus, your business operations and functionings need to be quick, transparent and more improvised.
Speaking on a larger scale, digitalization has brought enormous opportunities for insurance companies to reach and approach the audience. It builds up potential, improves efficiency, innovates products, and truly improves the falling costs and findings driven by data analytics.
Conclusion
Digitalization has truly changed the perspective of today's customers and the profitable market. And because of this only, the insurance industry has opted for numerous tactics and strategies to survive in the market. Although the industry still needs these significant changes and moderations as most of its work is done is paper-based. Still, insurance companies have achieved great profit through such changes and own a very strong market presence.
Stay tuned for more updates!
Payrup offers a 100% secure environment for Life Insurance Plan.
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