AI-Powered personalisation reshapes consumer expectations in life insurance, study shows

By Puja Sharma

New data highlights demand for AI-driven speed, simplicity, and tailored digital experiences in the life insurance market

iCover Direct, a consumer-facing life insurance platform powered by a proprietary AI underwriting engine, announced results from a nationwide consumer survey revealing a growing consumer demand for artificial intelligence (AI) to streamline and simplify the life insurance experience. The findings show that 65.3% of consumers say AI-driven personalisation would “greatly” or “moderately” increase their interest in purchasing life insurance. In comparison, 65.1% said they are “extremely” or “very interested” in faster, AI-enabled processes.

The survey, presented to more than 2,000 U.S. adults in July 2025, found that 65.1% of respondents would be “much” or “somewhat more likely” to buy life insurance if the application process were shorter and simpler — a strong indication that digital modernisation is not only welcome, but expected. Minimal concerns about AI were reported, with only 0.9% expressing hesitation over privacy and data usage.

Despite just over half of respondents (50.7%) already owning life insurance, many indicated ongoing frustrations with the traditional experience.  Among those without a policy, the most common barriers included a lack of perceived need (16.4%), limited understanding of policy benefits (16.9%), and the belief that the application process is too difficult (8.2%). Notably, only 16.7% of respondents with a policy found it “very easy” to understand, while nearly a third said the language ranged from “neutral” to “difficult.”

These findings paint a picture of an industry that continues to struggle with complexity and a lack of clarity. Policy jargon was cited as the top frustration by 32.5% of respondents, followed by high premiums (16.5%), poor customer service (16.5%), and the frustrating claims process itself (16%). Even among current policyholders, confidence in the claims process was mixed. While 62.1% said they had never filed a claim, among those who had, 32.7% received their payout in full, 3.8% reported that it was denied or partially paid, and 0.9% indicated that it was still pending. Key reasons for denied or delayed claims included administrative delays (8.3%), excluded causes of death (5.1%), and misrepresentation on the original application (3.6%).

“These findings serve as a wake-up call for an industry that has been slow to evolve,” said Hari Srinivasan, Founder and CEO of iCover Direct. “AI has the potential to eliminate the pain points consumers associate with buying life insurance, from confusing policy language to slow underwriting and claims. People want coverage that is simple, fast, and tailored to their lives. That’s exactly what iCover Direct can deliver with the power of AI.”

iCover Direct enables life insurers to accelerate decisions from weeks to minutes while reducing the friction that often deters consumers from completing the application process. These survey insights demonstrate that digital innovation, especially when powered by AI, is not a nice-to-have, but a necessity for meeting consumer expectations in today’s competitive market.