To start off, let us understand what life insurance is. It is basically a contract between an insurer/assurer and the policyholder, where the former makes a vow to pay the beneficiary who holds the policy a particular amount of money, in exchange for a premium, when and if the beneficiary passes away. Know more about the basics of insurance by joining the NSE Academy Certified Financial Planning & Wealth Management course on Elearnmarkets.
In some cases, there are contracts where payment can also be made in case of terminal or critical illness. Sometimes, expenses like that of a funeral can also be included in the contract. Under normal conditions, the policyholder either pays a premium on a regular basis or as a lump sum.
History of Life Insurance
The earliest form of life insurance dates back to ancient Rome, where ‘burial clubs’ took care of members’ funeral expenses, while also financially helping out their survivors. The first-ever life insurance establishment was the Amicable Society for an Assurance Perpetual Office, which was created by Sir Thomas Allen and William Talbot in London in 1706. This society also called the Amicable Society, started off with 2000 members.
The Society for Equitable Assurances on Lives and Survivorship, established in 1762 by Edward Rowe Mores, became the world’s first mutual insurer, thus bringing about the first kind of age-based premium that depended on mortality rate. It is credited with pioneering the usage of the modern mode of life insurance contracts. In the United States, the sale of life insurance began in the 1760s, and in the timeframe of 1787 and 1837, more than two dozen such companies started. However, barely a handful was able to survive.
Both the post-World War phases saw a rapid rise in stocks for this kind of an arrangement. With the middle-class boom occurring a few years later, in the US alone, by the mid-1970s, 72 percent of all adult population and 90+ percent of married couples had some form of a life insurance.
Current Trends Suggest Change Is Needed
Just as with every other product and service that is going digital in today’s fast-paced and impatient world where breakfast and lunch are more commonly eaten out of take away joints, life insurance companies also must have realized that going digital is the next step and that the future of this arrangement is at a crossroads.
Most insurance companies are known to be rigid in their beliefs and workings, following the tried and tested methods that have served the insurance sector so well over the last seven decades. Change does not come easily to such organizations, but if they are to survive and be counted upon by the new generation, then embracing their love for anything relating to the internet is a key ingredient.
The future customer is not going to be in a mood to talk with customer executives or policy agents, be it face-to-face or on call. They are what we can call the ‘Google generation’, each with their own idea of what is suitable for them and what they want. Most of the current generation is very aware of things around them, with the internet and Google playing a big part in this development.
Future customers will have already researched their way past life insurance companies online, what with so many comparing agencies helping them. They will only want the facts and products that they have already determined are useful for them, only the promise of the organization as per their wants will be left to vet out.
Also Read: How To Choose A Best Health Insurance Plan?
Customer Experience Key
The future is already now, so to speak! The way insurers treat their customers and deal with their demands, could well shape the future of life insurance. Greater transparency, easier access and being flexible with their solutions must be some changes that they have to incorporate when interacting and behaving with people. Modern customers prefer things that are to their preferences and lifestyle, and working around these aspects will also gain more importance in the future.
Perhaps, most importantly, the various insurance agencies will have to also work alongside the powers that be, without eroding their sense of importance or entitlement. They will have to be flexible with the laws and regulations so that an efficient chain of services can be provided to future customers, who may well be the most demanding and knowledgeable ever.
How To Track Benefits Of Life Insurance
It isn’t that difficult in today’s world to keep track of the benefits of a life insurance policy. One can always visit the home office of the policy provider, or call their toll-free number/customer care number to find out the same. Many other organizations provide online facilities so that a customer can track their status from the comforts of their homes. However, some of the things required when checking for the same are:
1. Full name of the insurance company
2. Policy number
3. Policyholder name
4. Date of policy issue
5. Address of the company
6. Address of the policyholder
7. Amount being paid for policy agreement
8. Final amount of death benefit
9. Type of policy
10. If employer has provided policy, then name, address and contact details of the employer/person/group providing the same
This article has been written by Finance Gab team. Who are the personal finance blogger cum Personal finance writer in India.