Blockchain Smart Contract for Automated Life Insurance Claims
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Solution Overview
Problem
The existing process for life insurance claims is inefficient, as it often involves delays in notification to beneficiaries, lengthy processing times by insurance companies, and utilization of significant computing resources, ultimately leading to delayed payments to beneficiaries.
Innovation Solution
A smart contract on a blockchain is used to automatically execute a life insurance policy transfer upon receipt of a death notice from a death record repository, facilitating immediate and automated fund transfers from a designated source to a designated destination.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Speed
If a smart contract on blockchain is used to automatically execute life insurance policy transfer upon receipt of death notice, then the payment speed to beneficiaries is improved, but the device complexity increases
Solution Approach 1:
The smart contract automatically executes the life insurance policy transfer when triggered by a death notice from a death record repository, eliminating the need for manual claims submission and processing by insurance companies. The system serves itself by automatically detecting the triggering event and executing the fund transfer without human intervention.
Solution Approach 2:
The patent replaces the traditional mechanical processing system (manual claims handling, human review, and bank payment processing) with an automated blockchain-based smart contract system. The smart contract automatically executes the fund transfer upon receiving the death notice, substituting the complex mechanical processes with a decentralized automated system.
2Loss of time
If manual claims processing by insurance companies is eliminated, then the time required for claim processing is reduced, but the extent of automation increases
Solution Approach 1:
The smart contract is pre-configured with the transfer source (insurance company funds) and transfer destination (beneficiary account) information before the death event occurs. When the death notice is received, the contract automatically executes the transfer without requiring any preliminary manual processing, claims submission, or verification steps.
Solution Approach 2:
The system automatically detects the death notice from the death record repository and triggers the smart contract execution without requiring manual intervention from beneficiaries or insurance company employees. The entire claims processing function is automated and self-executing.
3Productivity
If traditional insurance claim processing systems are used, then system reliability is maintained through manual review, but the productivity of claim processing decreases
Solution Approach 1:
The smart contract on the blockchain provides a transparent and immutable record of the life insurance policy transfer. The automatic execution and permanent recording on the blockchain ensure reliability and accuracy of claims processing while dramatically increasing throughput by eliminating manual review steps.
Solution Approach 2:
The patent replaces the manual review and processing system with an automated smart contract execution system on the blockchain. This substitution increases productivity by eliminating human processing bottlenecks while maintaining reliability through the cryptographic security and immutability of the blockchain system.
Data Source
AI summary
A smart contract on a blockchain represents a life insurance policy for a policyholder. The smart contract can automatically execute on the blockchain based on a notice, from a death record repository, indicating that the policyholder has died. Automatic execution of the smart contract causes an automatic transfer of funds from a transfer source identified in the smart contract to a transfer destination identified in the smart contract.