Cryptocurrency-Integrated Life Insurance: A Decentralized Alternative via Blockchain

Traditional life insurance faces challenges of high costs, opacity, and limited inclusivity. This paper proposes a blockchain-based model for life insurance that leverages a dedicated cryptocurrency and smart contracts to create a decentralized alternative. Policyholders deposit savings in the form of a cryptocurrency token locked in smart contracts for a fixed term (e.g., one year). These deposits earn yield through decentralized finance (DeFi) protocols, and smart contracts automatically release funds either back to the policyholder at term or to designated beneficiaries in the event of the policyholder’s death. We outline the limitations of traditional life insurance and examine how the proposed model addresses them by improving transparency, trust, and potentially offering better returns. We also discuss challenges inherent to this decentralized approach, including regulatory hurdles, cryptocurrency volatility, oracle-reliant death verification, and user trust. The model is situated within D-Block ۲۰۲۵ themes of FinTech and DeFi innovation, illustrating how decentralized governance and blockchain could transform financial services. A hypothetical case study and qualitative analysis are presented to evaluate the model’s feasibility and benefits. The results suggest that a crypto-integrated life insurance system could enhance transparency and efficiency, though careful consideration of risk management and compliance is required. The paper concludes with insights on future research, emphasizing that while a decentralized life insurance framework shows promise in aligning with financial inclusion and innovation goals, it must overcome significant technical and regulatory challenges to achieve real-world adoption.

کلیدواژه ها:

Blockchain ، Life Insurance ، Decentralized Finance (DeFi) ، Smart Contracts ، Cryptocurrency ، FinTech ، Insurance Innovation ، Governance