Close
ThinkAdvisor

Life Health > Life Insurance

Why the insurance industry should embrace e-signatures

X
Your article was successfully shared with the contacts you provided.

If the insurance business is about anything, it’s about providing peace of mind. Life insurance companies in particular give their clients the comfort of knowing that their loved ones will be cared for should the worst happen. With this in mind, the industry is right to embrace the use of electronic signatures. E-signatures combine the ease-of-use of modern electronic commerce with the level of security and confidence the life insurance industry had traditionally represented.

Online automation for life insurance is essential as policies often have to integrate data to a single account and have the information approved by the client. Allowing customers to approve a deal online can increase the ease and comfort of policy holders and ultimately bring increased new business to insurance companies. There’s no better, nor more deserving, vehicle for this move than e-signatures.

Electronic signatures are safe, legally binding, and enable users to do business in a way they’ve shown they like: online and protected. The technology has been proven, tested, legally sanctioned and has been used safely and effectively for years. 

The reluctance to accept e-signatures has been getting in the way of seamless business between insurer and insured. When clients want their coverage to start as soon as possible, why hamper them with a back-and-forth paper trail?

We can’t get electronic signatures into the mix soon enough. Other important financial players, such as broker dealers, are already using e-signatures for their own proprietary and clearing form paperwork.

Many executives of insurance companies might not fundamentally understand how independent insurance sales agents operate. That may sound bizarre, but it’s true. These managers know how to create good policies, but they don’t know how things work out in the field and how business gets to them through sales forces that deal with people face-to-face.

We can understand that someone at a certain level of management, accustomed to not processing individual orders from clients, is afraid to be flooded with applications. But the bulk of insurance business is individuals placing orders. Clients have their insurance policies through their employers, but they still apply individually and they should be able to do that online.

Life insurance documents have to be precise, and if something’s wrong with the forms, the forms have to be sent back and forth again. Insurance companies using the post office or carrier services for documents is like mailing a birthday card using the Pony Express. In an age when money can move almost as fast as the speed of light over trading systems, mailing paper forms is woefully outdated.

Accepting e-signatures is a great move for any organization catching up with the times. Many industries have reached this phase of development and adapted to technology accordingly. It’s now time for more insurance companies to make the right moves. It’s a step that everybody in the industry knows needs to be taken but it’s been a challenge nudging them forward. We’re on our way though, and this movement is picking up steam.

Insurers need to be nimble if they want to stay current and appeal to a wider swath of customers. While many of today’s clients may tolerate slow-moving systems that approach technology with trepidation, tomorrow’s clients won’t. Electronic signatures are an important step for the life insurance industry and their acceptance of this technology is a great move forward.