AI-Powered Personalisation Reshapes Consumer Expectations in Life Insurance
New data from a nationwide survey reveals growing consumer demand for AI-driven speed, simplicity, and personalised digital experiences in the life insurance market. iCover Direct, a life insurance platform using a proprietary AI underwriting engine, shared these insights based on feedback from over 2,000 U.S. adults surveyed in July 2025.
Consumers Want Faster, Simpler Processes
According to the survey, 65.3% of consumers said AI-driven personalisation would significantly increase their interest in purchasing life insurance. Almost the same percentage (65.1%) expressed strong interest in faster, AI-enabled application processes. Additionally, 65.1% said they would be more likely to buy life insurance if the process were shorter and easier.
This clearly signals that digital modernisation in life insurance isn’t optional — it’s expected.
Low Concern Over AI Privacy Issues
Privacy concerns around AI remain minimal, with only 0.9% of respondents expressing hesitation about data usage. Despite over half (50.7%) already owning life insurance, many continue to find the traditional experience frustrating.
Barriers for Those Without Coverage
Among consumers without a policy, the most common barriers were:
- Lack of perceived need (16.4%)
- Limited understanding of policy benefits (16.9%)
- Belief that the application process is too difficult (8.2%)
Only 16.7% of those with a policy found their coverage “very easy” to understand, while nearly a third rated policy language from neutral to difficult.
Industry Frustrations Persist
The survey highlights ongoing pain points in life insurance:
- Policy jargon was the top frustration for 32.5% of respondents
- High premiums and poor customer service each affected 16.5%
- Frustrating claims processes were cited by 16%
Confidence in claims processing is mixed. While 62.1% had never filed a claim, among those who did:
- 32.7% received full payout
- 3.8% reported denied or partial payment
- 0.9% had claims still pending
Reasons for denied or delayed claims included administrative delays (8.3%), excluded causes of death (5.1%), and misrepresentation on the original application (3.6%).
What This Means for Insurance Professionals
The data sends a clear message: consumers want life insurance that is simple, fast, and personalised. AI can reduce friction by speeding up underwriting decisions from weeks to minutes and clarifying complex policy language.
For those working in insurance, embracing AI-driven tools isn’t just about innovation — it’s about meeting the straightforward expectations of today's customers.
Learn more about AI applications in insurance and related skills at Complete AI Training.
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