The Risks of Relying on AI for Final Expense Insurance

Agents often work by phone, email, and even text message. While artificial intelligence (AI) seems to be incorporated into just about everything these days, I worry about the implications of AI in selling life insurance, especially final expense insurance. On the surface, it seems simple. With just under 40 final expense carriers, there's likely to already be at least one with an AI chatbot on their website that can guide someone through an application and help them fill it out.

However, the proposed insured often has one thing in mind: acquiring a policy, typically a classic $10,000 face value whole life policy that they pay for monthly, believing this will cover their funeral. What’s not taken into consideration are critical factors such as the contestability period, waiting periods, and the nuances of maintaining a policy.

People don’t just call to inquire about coverage, get a policy, pay for it their entire life, and have it cover everything when they die. Many have had coverage in the past. If they no longer have it, there’s usually a reason: Did it lapse? Did they take a loan? Was it a term policy that ended unexpectedly after 15 or 20 years? Will their income change in the future? Do the premiums go up? Is it a whole life policy or a final expense plan? What happens if they go to a nursing home at the end of their life cycle? Does it have non-forfeiture benefits, a waiver of premium, an accelerated benefit, or an automatic premium loan?

Are we adding to existing coverage or replacing it? Is it worth replacing the existing coverage to put a new policy in place, or is it better to add additional coverage? Does the client believe they can have more than one policy, or were they misled by an inexperienced agent into thinking they could only have one?

These considerations are crucial when making an insurance purchase. Do clients ask the right questions? Do they even know what questions to ask? Does anyone buy life insurance with the intention of canceling it one day and starting a new one? Replacements happen often, but does the client know they’re starting over a contestability period and that if they die in the first two years, the claim will be scrutinized?

To ensure you make the right decision and get the best coverage for your needs, it's essential to speak with an experienced agent. Contact me today for a personalized consultation and peace of mind.