Artificial intelligence (AI) is transforming the life insurance industry, bringing efficiency and automation to processes like claims evaluation and fraud detection. However, this reliance on AI is raising concerns about fairness, transparency, and accountability, particularly when so many valid life insurance claims are denied.
Many large life insurance companies use AI to evaluate claims such as: Allianz; Prudential; AXA; MetLife; Liberty Mutual; Cigna; Manulife; and more.
AI will analyze the following to deny claims
- Criminal records: to see if convictions disclosed
- Employment history: to see if employed
- Income history: to see if stated income matches actual
- Medical records; to see if an illness wasn’t reported
- Prescription history: a clue as to whether a medical issue wasn’t reported
- Health apps and wearable devices: to see if any health issues
- Financial history: to see if person got insurance due to financial problems
- Social media accounts: to find out if person engaging in risky activities
- Claim history: to see if person abused claims
- Travel and geolocation: to see if person traveled to high-risk areas
- Document assessment: to see if fraudulent records
AI’s role in fraud detection is the biggest problem. While algorithms can flag potentially fraudulent claims, they are far from infallible. False positives, where legitimate claims are wrongly flagged, can result in valid life insurance claims being denied. For example, a claim filed shortly after a policy’s initiation might be flagged as suspicious. For affected claimants, overturning these decisions often requires a stressful and long appeals process. Remember, AI’s decisions are only as reliable as the data they’re trained on, and biases in that data can lead to unfair life insurance claim denials. For instance, if historical data reflects discrimination against certain demographics, AI systems may perpetuate those biases, denying claims based on arbitrary or unjust criteria. A significant issue with AI in life insurance is the lack of transparency. When a life insurance claim is denied, policyholders are often given little to no concrete explanation. Insurers frequently cite proprietary algorithms or trade secrets, leaving claimants feeling powerless and distrustful of the system.
The regulatory landscape for AI in life insurance remains underdeveloped. Many jurisdictions lack oversight, allowing insurers to deploy AI with minimal accountability. This increases the risk of abuses, as profit-driven decisions may take precedence over fairness and consumer protection. Policyholders whose claims are denied should have access to a fair and straightforward system for challenging those decisions. The top life insurance lawyers at LifeInsuranceAttorney.com fight denied claims and win.