Life insurance has traditionally been anchored in predictable life events, but that foundation is weakening as those milestones become less reliable and less frequent. The industry is confronting slower growth and rising costs. The customer base expects a very different kind of interaction, particularly when it comes to payments.
Kevin Ostrander, chief revenue officer at One Inc, told PYMNTS in a recent interview that pressures are both broad and persistent. “It’s a tight margin within their industry, and they have increasing operational costs,” he said, pointing to inflation and slowing premium growth as added strain.
Fragmentation Constrains the Payments Experience
The payments infrastructure underpinning life insurance remains difficult to modernize. Ostrander described “highly fragmented, complex, siloed business processes,” where products sit on different systems and legacy platforms limit flexibility.
These constraints do more than slow innovation. They shape the policyholder experience in ways that are increasingly out of step with expectations formed in other industries. When billing and payment systems do not connect cleanly, insurers struggle to deliver consistency across onboarding, servicing and collections.
That disconnect has turned payments into a visible point of friction.
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Slow Growth and Rising Pressures
Growth remains subdued, and the composition of the customer base is changing. Ostrander said expectations around engagement and buying journeys are shifting alongside demographics, forcing carriers to rethink how they interact with policyholders.
At the same time, the traditional triggers for purchasing life insurance are no longer dependable. “Lower marriage rates, fewer children, reduced home ownership,” he said, “those milestones are no longer driving life insurance purchases.”
Carriers are responding by rethinking product design and engagement strategies, including bundling services and building more continuous relationships with customers. Those efforts, however, depend on a payments experience that can support ongoing interaction rather than one-time transactions.
Payments as a Driver of Loyalty and Persistency
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That shift has elevated the role of payments within the customer lifecycle.
“Billing is the most frequent policyholder interaction,” Ostrander said, and when it is not optimized, it “challenges growth.”
The consequences are operational and financial. Payment failures, insufficient funds and processing delays create additional servicing work while increasing the likelihood of policy lapses. Ostrander noted that many carriers are managing a steady volume of payment-related inquiries tied to unsuccessful transactions and reconciliation issues.
In that environment, improving the payments experience becomes directly tied to persistency rates and revenue stability.
What Modernization Looks Like in Practice
The contrast between legacy processes and modern approaches is clear in onboarding. Ostrander described a traditional workflow in which customers complete forms, provide account details and rely on manual submission. Errors or timing issues can take weeks to surface, triggering a chain of follow-ups across carriers and agents.
A modernized approach replaces that process with digital workflows that validate information in real time, marked by straight-through processing, he said, noting that this reduces errors and shortens the path from application to activation.
The broader goal is to support self-service, faster processing and flexible payment options that align with how customers already transact elsewhere.
Toward a Payments-Centric Model
Capabilities that are standard in other sectors are moving into the life insurance baseline, including digital-first engagement and seamless payment management across the policy lifecycle.
“The technology is there to offer that experience,” Ostrander said. “It’s on the carriers right now to adopt that technology and offer the experience that your customers are looking for.”
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