Digital Life Insurance Has Disruptive Power

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By Andrea Heger

3 minutes

Here’s why, and how you can harness it.

Sponsored by Franklin Madison

The financial industry might have been late to the digital transformation party, but it’s catching up quickly. From mobile payments to digital currencies, the industry is betting billions on transformation efforts (and winning). Soon, adding digital life insurance to your product portfolio won’t just be a novelty, it will be a necessity. But, with some smart investments and the right partner, your credit union will be on the cutting edge of this emerging product. 

What It Is: A New Use for Established Tech 

Digital life insurance is built on the same concept as digital auto, which companies like Geico have built provider empires around. It combines technologies like machine learning and algorithm-based database scrubbing to assign risk factors based on a variety of automated factors, then offers consumers an underwritten product based on their risk factors. This ability to forego a traditional, lengthy medical assessment means a process that used to take weeks now takes minutes for the majority of consumers.  

Because this process uses a model that has already proven successful in other insurance niches, companies that embrace it get to forego the risk factors that usually come with new tech-based products, while still harnessing the power of an emerging technology. That’s a big win-win. 

There’s Opportunity in Early Adoption 

As customers’ lives grow more and more digital, they expect to interact with their most trusted brands online. That makes the potential consumer reach of digital insurance huge, as it reaches individuals who may never set foot in brick-and-mortar institutions. This combination of meeting consumers where they are, and giving them a quicker route to conversion, allows early digital insurance adopters to profit, because interacting with consumers through their preferred channels drives higher conversion rates.  

As if you needed stats to back up the idea that consumers are moving online, in one 2018 study, 50% of adults said they had searched for life insurance in the past year, with a third attempting to make purchases online. That proves there’s not going to be a market, there is a market. 

An Immediate Route to Customer Loyalty 

There’s no doubt that when a consumer purchases more products from you, their loyalty goes up. That’s why providing a variety of insurance products is a keystone of our blueprint for smarter marketing.  

Digital insurance is the perfect component of a smarter marketing platform for two reasons. First, it’s immediate. With Franklin Madison’s solution, customers can have an offer for an underwritten policy in less than 10 minutes. Second, life insurance is a product with inherent stability. Individuals who buy life insurance aren’t likely to jump ship anytime soon. And that consumer stability drives long-term loyalty.

A Better User Experience 

Digital insurance isn’t just a win for financial institutions. It’s also a huge win for the consumers, who are able to avoid a highly personal medical history conversation followed by an in-person exam. That would then traditionally be followed by several weeks of waiting for coverage to go into effect. Conversely, for most potential customers who use Franklin Madison’s solution, the process is completed entirely online, and results in prices that are comparative, if not cheaper, than those of traditional competitors. What used to take anywhere from five to 15 weeks can now be accomplished in 10 minutes.

If you haven’t added digital insurance to your product portfolio yet, now’s the time, as consumers are adopting it faster than ever. 

Andrea Heger serves as Franklin Madison’s SVP/sales & client services. Heger joined the organization in 2014 and is committed to the company vision of bringing best-in-class insurance solutions to credit unions through compliant and effective marketing campaigns and customer servicing. Before joining Franklin Madison, she spent 13 years at Wells Fargo, where she held various roles of increasing leadership and responsibility related to marketing, insurance, advertising, and business development.  

To learn more about our digital insurance product, download our e-book, "Transformation Next: Digital Life Insurance." Or, if you’re ready to start building your own customer security, email us today.

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