Life Insurance Questionnaire — How to Manage Complexity

on March 7, 2024
life insurance questionnaire

Compliance in Life Insurance

A life insurance questionnaire is used by insurance companies to gather pertinent information from applicants. Insurance companies use this information to assess risk, determine eligibility, and generate quotes. A questionnaire typically includes questions about the applicant’s occupation, finances, health, family medical history, and lifestyle. While this may seem straightforward, life insurance questionnaires can be quite complex. Almost all life insurance regulations are state laws with each state having their own rules. For example, different states have different requirements on how to word certain questions. A life insurance company must comply to the regulations of each state it operates in.

Reflexive Nature of Questions

In addition to compliance, the reflexive nature of the questions in the questionnaire adds greater complexity. For example, a question asks whether an applicant has been diagnosed with any medical conditions in the past few years. If an applicant responds “yes,” the applicant would need to indicate which medical condition(s). And for each condition indicated, the applicant would need to provide even further information (ex. medications taken). However, if the application responds “no” to the first question, the subsequent questions would be skipped because they’re irrelevant. Therefore, a life insurance questionnaire can contain thousands of unique questions even though only a hundred or so would be relevant to any given applicant.

Managing Complexity with SMARTS™

A leading digital insurance company needed a better way to manage the life insurance questionnaire for their life insurance products. The insurance company leveraged SMARTS™ Data-Powered Decision Manager to modernize their process because of their ability to manage the questions, the front-end experience, and any decisions derived from the application data in one place.

Dynamic Questionnaire, a SMARTS™ tool, enables business analysts and other users to create and manage dynamic interactions (user interfaces) through a series of pages and decision logic. With each page, business analysts can define a set of questions and responses, apply any validation logic (ex. required fields), and specify any data-overrides or dynamic content (ex. rephrase a question based on state of residency). Users can also define the interactions among the pages (the front-end experience) through decision logic. SMARTS™ will automatically create the executable code and the data structure to support the questionnaire.

Through Dynamic Questionnaires, the insurance company was able to radically simplify how they manage their application form. In addition, with the data structure already in SMARTS™, the insurance company used SMARTS™ to manage their decisions for eligibility, quotes, and underwriting. Because of the significant operational efficiency gains the insurance company realized from leveraging SMARTS™, they have since expanded usage to their non-life insurance products.

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