Those looking for greater financial protection for the family should always consider adding a life insurance policy to their portfolios. The popularity of several types of life insurance has grown exponentially over the last few years, with more people looking to gain not only greater peace of mind but also more confidence in planning for the future. Yet, what about the winds of change that swept the life insurance industry throughout 2022?
This article takes a look at some of these trends that have radically transformed the sector this year.
Various types of life insurance – A handy checklist
Table of Contents
Before delving deeper into the major life insurance industry trends for 2022, here is a little guide that will help you understand the multiple types of life insurance plans.
- Term Plans- Long-term coverage with reasonable premiums. Payout of a sum assured to the nominee in case of the policyholder’s death within the policy period. It may come with a return of premium option as well.
- Whole Life Insurance- Insurance coverage that secures the policyholder for an entire lifetime.
- ULIPs (Unit Linked Insurance Plans)- A combination of life coverage and investments in debt, equity, or balanced funds for future returns. They come with 5-year lock-in periods.
- Endowment Plans- These are insurance plans with guaranteed maturity benefits.
- Money Back Plans- Enable future planning for long-term objectives like your children’s education and home down payments.
- Retirement Plans- These help build future corpora for a smooth retirement.
- Child Insurance- This helps accumulate wealth to cover the costs of higher education for your children or any other significant events in their lives, like their wedding, etc.
- Group Insurance- This is a plan type which covers multiple employees or members in a group and is usually paid for by the employer or the group head.
Are you curious about the future of the life insurance industry? Here are five trends that we saw in 2022:
Five trends that influenced the insurance industry in 2022
- Protection as a critical objective: The unpredictable nature of life and the sudden economic downturns in recent years have made people cautious about future financial security. Insurers are going deeper with initiatives and awareness programs that tap into the need for future well-being and mental peace. Protection as the key goal for insurance has been the major trend in 2022.
- Onboarding simplification: Digitization has completely changed the landscape. You now have Chatbots driven by AI for onboarding, more accessible policy terms and information online, and simplified onboarding processes backed by advanced technologies. There is still scope for improvements, although customer requests, applications, and claims settlements are happening more efficiently due to technological adoption.
- Analytics and Data Science to be game changers: 2022 has already witnessed the insurance industry making sizable investments in data science and analytics. This covers the entire spectrum, from security and analysis to the collection of data. AI (artificial intelligence) and ML (machine learning) could be game changers, enabling companies to offer personalized solutions based on customer profiles while enhancing parameters like the prevention of risks and retention of customers.
- Easier access to insurance plans: Multi-channel platforms for life insurers will be the norm, as seen in 2022 already. Customers can engage, browse, and pay across multiple channels and platforms. This naturally simplifies overall insurance access in myriad ways. At the same time, companies are also going in for digital tie-ups to remove several entries or access barriers for customers, especially in under-served or un-served markets.
- Advisory approaches to dominate: Insurers are steadily adopting an advisory approach, offering solutions for their policyholders. This will help them personalize offerings accordingly. They may also adapt to this consultation-based model for better engagement, higher conversions, and retention.
What lies ahead?
As these predominant market trends clearly indicate, the way forward is exciting for consumers and insurance companies. The former will have more options easily accessible at their fingertips, along with advice, guidance, and easy onboarding and payment processes. The latter will benefit from more personalized engagement with the customer, higher retention figures, and more efficient operational procedures that ultimately save time and costs.
