Term Insurance and the Rise of Insurtech Startups in India

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In recent years, the Indian insurance industry has witnessed the emergence of numerous technology-driven insurance startups. These insurance firms are revolutionising the market by offering innovative solutions through seamless customer experiences and data-based underwriting. One key insurance segment seeing massive insurtech impact is term insurance.

We also look at ACKO Insurance, a leading startup transforming term insurance in India.

Evolution of Term Insurance in India

Term insurance is still relatively new in India compared to conventional endowment plans or ULIPs, which have existed for decades. Term life insurance provides pure risk coverage in case of the policyholder’s demise during the policy term. Despite the high cost-effectiveness of term plans in securing families’ finances, their uptake and adoption in India saw slow growth for many years. Term insurance penalises people with health issues by charging higher premiums or denying coverage. Limited product options, lack of awareness, and unmanageable offline purchase and claim processes further hindered term insurance penetration in India. This presented a considerable market opportunity for insurtech startups to disrupt the space by innovating and improving every aspect of term insurance.

Critical Drivers for Insurtech in Term Life Segment

Some key factors have spurred the rise of insurtech innovation targeted specifically at term insurance:

Limited awareness and understanding among buyers

Hassles with offline purchases and renewals

Medical tests add costs and delays

Lengthy and tedious claims processes

Lack of transparency and tracking

Insurtech firms have leveraged technology, data, AI and automation to address these pain points and improve efficiency across the term insurance value chain.

Areas of Term Insurance Seeing Insurtech Impact

Insurtech solutions have brought about significant enhancements across the end-to-end term insurance as well as life insurance  journey:

Product Innovation

Insurtech firms have introduced many first-of-their-kind term insurance products like:

Customisable sum assured and riders

Increasing life cover to changing lifestyle and counter inflation

Single premium term plans

Easy online renewals

Underwriting Using Technology

Traditionally, underwriting relied on exhaustive medical tests. Insurtech firms are leveraging data, AI and IoT like:

Predictive analytics to assess mortality risk

Online medical questionnaires instead of physical tests

Wearable data for real-time health monitoring

This makes the process quicker, cheaper and more convenient for buyers.

Digital Distribution

Insurtech has enabled online sales of term plans through:

End-to-end paperless e-purchase

DIY premium calculators

Telemedical exams and instant e-issuance

Chatbots for sales assistance

This brings ease, speed, and cost savings compared to offline purchases.

Enhancing Customer Experience

New age insurers deploy technology to offer superior customer service like:

Online policy management and claims tracking

AI-enabled chat support

Intuitive self-help tools and dashboards

Hassle-free onboarding and renewal

Streamlining Claims Processes

Insurtech firms simplify traditionally lengthy claims procedures through:

Click photos of documents and submit them online

Digital document locker to store proofs easily

Automated claim tracking and settlement

AI fraud analytics engine to settle genuine claims faster

Case Study: How ACKO is Transforming Term Insurance

ACKO is one of India’s leading insurtech startups, spearheading innovation in term insurance. It follows a digital-first model that combines proprietary technology, intelligent automation, and data science to make term insurance seamless and hassle-free for consumers. Here is how ACKO is driving change across the term insurance lifecycle:

Easy Online Purchase

ACKO has made buying term insurance entirely online through their website or app in minutes. The entire sales journey is digital, from getting quotes to selecting plans, onboarding, underwriting, and issuance.

Innovative Term Products

ACKO has launched a unique life plan that welcomes change. Its innovative life plan with unmatched flexibility allows customers to personalise their policy coverage and terms to suit their changing needs, responsibilities, and more.

Robust Underwriting

ACKO leverages hundreds of real-time data points, predictive analytics, and machine learning for accelerated underwriting. This minimises delays and ensures more buyers are covered.

Superior Experience

ACKO policyholders enjoy features like online claims tracking, reminders for renewals, instant support, automated policy servicing and more.

Quick Claims Settlement

ACKO has simplified the claims process by allowing easy document upload via the app and speed up review and settlement. This ensures families get support quicker under challenging times.

Conclusion

Insurtech is fast transforming the entire term insurance value chain, from product conceptualisation, underwriting, and distribution to post-purchase servicing and claims settlement. ACKO is at the forefront of leveraging technology and innovation to make term insurance seamless for Indian consumers to purchase and use. With a keen emphasis on technological advancements, insurtech firms are preparing for exponential growth in term insurance adoption.

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