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Watch the ads for life insurance and it is easy to believe that underwriting is a thing of the past. Policies promise no medical exams and rapid acceptance, creating the impression that assessing risk no longer plays a significant role in life insurance. The truth is it does. Underwriting remains at the heart of life insurance, but it has evolved and still is evolving dramatically. Today, technology, automation and AI are helping insurers assess risk faster and more accurately than ever before, making the process quicker and easier for advisers and their clients.
Life underwriting is not less, just different
Key adviser take-out: there are life cover policies offering limited cover with limited or even no underwriting. For the rest, it’s business as usual with underwriting completed at application stage.
Underwriting used to be a manual process, today it is tech-empowered, automated and fast. That is good news for advisers and their clients because it is quicker, easier and less stressful to take out a policy. For insurers, the process is faster too, as well as more efficient, but still accurate.
In 2019, RGA wrote: “Today, humans make the underwriting decisions with some help from machines. Tomorrow, machines will make the underwriting decisions with some help from humans.” It was an accurate forecast.
Automated underwriting was introduced to the country by 1Life Insurance in 2006, 20 years ago. Questions are asked on application and based on those answers, risk is assessed and terms and conditions are offered. Today, underwriting is starting to use advanced tech and looking into AI such as Agentic AI, for even more accurate assessment and quicker selection.
Beating the human underwriter on speed hasn’t replaced them. Human underwriters with their skills, experience and industry knowledge form a crucial part of the process from development to review and verification. They oversee the operations and make sure that risks are identified and quantified properly.
When limited or no underwriting is promised, the policy will probably have limited cover. We have seen an increasing number of these policies, and they offer many families the protection they need. But when an applicant supplies more information than just their name and ID, there is underwriting. Sales take around 30 minutes and cover is issued seamlessly, giving customers the security they need at a fraction of the time it takes to issue a policy with traditional underwriting.
Accurately assessing risk
Key adviser take-out: questions on digital application forms need to be answered in full, comprehensively and truthfully. When they are, risk is accurately assessed. When they are not, it could lead to issues at claims stage.
Accuracy has been one of the most questioned parts of the automated process. Is the machine or system an accurate underwriter and good at assessing risk? The answer is yes, and it is getting better. But it does rely on input. The old system adage of bad input equals bad output applies.
Automated underwriting uses the answers to a series of questions to assess risk and offer the best policy terms, conditions and price or premium. When those questions are answered in full and honestly, with no gaps or misinformation, risk is accurately assessed.
It is critical that advisers and clients take time with these questions to ensure the answers are truthful. If an answer is not “the whole truth” or there is missing information, the result could be devastating for the beneficiaries.
To help clients answer these questions, they have to be clear, simple and easy to understand and respond to. At 1Life we review our questions all the time, looking at them from a system, underwriting, adviser and client point of view to ensure that we stay abreast of change.
Medical tests can and do play a role in assessing risk, but these are minimal and non-intrusive. For example, 1Life Insurance asks for an HIV test that can be done using a cheek swab at a pharmacy.
It is unlikely that a client would be impressed with an adviser or insurer today if a policy asked lengthy and complicated medical questions and the insurance company took two or more weeks to offer policy terms and conditions. It wasn’t too long ago that this was the standard. The process had to change so that insurers could offer better customer service.
Going forward, there are some even more interesting and groundbreaking developments in assessing risk such as using facial scans where biomarkers can show age, BMI, blood pressure and more. With one 30-second scan of a client’s face it could be possible to eliminate many medical questions and underwrite to determine risk even faster than we do today.
The system does the heavy lifting
Our systems do around 97% of the work involved in assessing risk and offering terms. This has freed up our skilled underwriters to focus on improving and streamlining our processes and products. We can also offer more relevant cover to customers and free up advisers’ time so they have more time with their clients. With advisers using platforms like 1Life Vantage, they can ensure their clients have the cover they need and include all the vital information in their applications.
Change means more client time
Overall, the winners from speedier underwriting are advisers. They can now have more time to spend getting to know clients and less time on complicated questions and follow-ups on when policies will be in force. There is a responsibility to ensure clients answer all the application questions, but there is also the knowledge that risk is accurately assessed, and clients have quick policy decisions.
2026’s underwriting myths and facts
It is impossible to underwrite accurately using tech, platforms, AI and automation
Myth: it is possible and we are doing it. Our experience, and the industry's experience, shows why: policies are being taken out and claims are being paid.
Clients don’t answer questions honestly
Myth: most clients do, in our experience. They, and advisers, are aware of non-disclosure risks. Of course, there are the exceptions to the rule and material non-disclosure remains a reason why claims are declined. But in 2024, the amount ASISA members lost for fraudulent and dishonest claims for all reasons amounted to a very small 0,02% of honest claims paid.
When a policy advertises no underwriting and immediate acceptance there is underwriting at claims stage
Myth: It is a myth that direct insurers underwrite at claims stage. What does happen at claims stage is that application details may be verified including details of the claimed event. 1Life Insurance will never underwrite any policy at claims stage.
Premiums are higher because underwriting is less
Myth: underwriting is not less and premiums offered are the best possible rates we can give based on risk assessment. However, where there is absolutely no underwriting, premiums are standard for all policyholders and could be higher than where there is an individual assessment of risk.