On-Demand Life Insurance

Last week I took a break from doing the weekly article as we wanted to update you about ISLEY, the Blockchain powered insurance buddy that gives you a 360-degree view of your insurance portfolio. ISLEY also lets the users access the articles published in past and has a glossary section which simplifies life insurance jargons. In case you missed the announcement or are interred in more details, here is the link!

The break also gave me an opportunity to consolidate my research on on-demand life insurance — one of the recent trends in the world of life insurance. If you thought buying life insurance is a cumbersome process and is a long-term contract, you are in for a surprise. The world is changing and so is life insurance industry. One of the recent trends is to offer on-demand life insurance, which one can turn on and off at the click of the button! Sounds interesting? Read on as this article focusses on on-demand life insurance.

While there is no formal definition of on-demand life insurance, it, as the name suggests, is a contract that lets you buy life insurance cover for the duration you want. The policy duration for most on-demand life insurance products ranges from a few hours to about a month. Since the duration of the cover is short, the overall premium in the long-run is also much smaller. You only pay for the duration you need cover and can turn it off when you no longer need it.

Sounds cool — but what do these products cover me against? The on-demand life insurance typically focuses on accidental injury and accidental death. The product is usually bought by adventure junkies who are attempting scuba diving, bungee jumping or exploring the world through road trips. The sums assured could be as high as USD 100,000 and the best part is that there is typically no underwriting!

No underwriting is great but does that not mean that insurer would make the proposal form long? Absolutely not! The insurer is most interested in knowing that the prospective customer is alive and verifies with the help of a selfie. While some of the insurers do ask a few questions, the questions can be answered in a couple of minutes!

So, the next time you go for bungee jumping and the thought of buying life insurance strikes you, buy on-demand life insurance and take that plunge with the much-deserved peace of mind!

I hope that this article has contributed towards broadening the understanding of life insurance and possibly raised a few questions. In case you have any questions, do write to us or reach out to me on Twitter when you can #AskTheActuary directly! Our next session will take place on 3rd September 2018!

Disclaimer: The article has been written with an aim to broadly explain an otherwise complicated and technical topic for readers with little or no insurance background. Hence, it doesn’t have finer details but is still broadly correct. The readers are recommended to take advise from their respective financial advisers before taking any financial decision.


About the writer: Mr Sumit Ramani is the Chief Actuary of fidentiaX. He is a qualified Life actuary and a computer science engineer with over a decade of experience in (re)insurance business with focus on modelling of life and health products, peer review and business analysis.