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The future of insurance: more ways to pay

By: Pam Handmaker, Senior Director, Product & Innovation

As we’ve discussed in recent articles, one of the greatest challenges the insurance industry faces is that consumers fear they won’t use their policy. There’s the sense of “it won’t happen to me” or “I won’t ever use it” that can turn people away from purchasing insurance. If they don’t use the policy, they’ll have security and a safety net, but they end up seeing the policy as “wasted money” if there’s no tangible payoff.

Education about the risks and likelihood of an illness or accident certainly plays a role in overcoming this challenge, but more and more, it’s up to carriers to not just refute this fear, but to embrace it and find ways to address it with the policies they provide. That’s why many carriers are looking at features that provide more ways to pay policyholders. Using this approach, a policyholder gets more value from the policy while still getting the important protection they need.

More ways to pay

Below are a couple tactics that carriers should be looking to build off of and that policyholders should be looking for when considering an insurance policy.
  • Alignment with medical practices - We discussed this topic in great detail in a blog series last year, but it’s worth mentioning again. Carriers can make sure that policyholders get the payment they need more often by aligning to today’s medical practices. If a policy was created years ago, the medical world may no longer match the way the policy looks at a condition, leading to claim denials. For example, some policies may require an enzyme test to pay a benefit for a heart attack, but doctors don’t always perform these tests if they already know the patient has had a heart attack.
  • Accounting for stages – Carriers can help make sure consumers get benefits by taking into account the stages or severity of a condition. Maybe a person didn’t have a heart attack, but they might still require treatment. Maybe they didn’t break a bone, but they have a severe sprain. Carriers can help consumers by finding more options for payment even if the condition wouldn’t traditionally be covered.
  • Features that get lots of use – Insurance is often associated with protection for when “something bad happens”. But, insurers can add more value to their policies by including benefits for standard tests and routine procedures.
  • Rewarding “good behavior” – This has been a trend in the auto industry that has crossed over into the health insurance world. Either offering a discount or returning premium to consumers who haven’t used their policy is a great way to make sure they get something out of the policy even when they believe it “won’t happen to them”.
  • Quick payments – Expediting the claims process can go a long way to making a policyholder happy. When a policyholder has filed a claim, it can be incredibly frustrating waiting for that claim to go through. The sooner it goes through, the sooner they get paid. It may not mean paying more but it certainly negates a sense that the carrier doesn’t want to pay the policyholder.
  • Bundling benefits – A bundled product offers more ways to pay because it’s combining two policies into one. It’s pretty straightforward, having two potential benefits increases the likelihood that a policyholder will end up using the policy.
The more payments a policyholder receives from the policy, the more value they see in the policy. And, the greater the value, the more likely a consumer is to purchase the product. It’s a win for everyone involved and it’s the reason that the future of insurance is in finding more ways to pay policyholders.

About the author
Pam joined Trustmark in July 2015. As senior director of product and innovation for Trustmark's disability income and universal life insurance products, she is responsible for researching marketplace trends and assessing the voice of the customer in order to create new product solutions for our customers. Pam has 12 years of product development experience in the financial industry at Northern Trust and JPMorgan Chase, and worked at Hewitt Associates earlier in her career managing a variety of client benefit implementations. Pam graduated from the University of Virginia with a bachelor of arts in psychology.

Posted on July 19, 2018 in Marketing Sales

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