Today I saw the beginning of the next evolution of insurance, and it was missing a few things. It didn’t involve insurance agents taking a 50% cut of the premiums. It didn’t include a human asking embarrassing questions about someone’s health and history. It didn’t include a confusing web of investment options and valuations to calculate benefits. And it didn’t include any risk of a company going bankrupt and not meeting their obligations.

What it did include was the Blockchain. A simple “2 of 3” (m of n) smart contract was created between 3 separate parties: An insured person, an insurance policy owner, and a third party escrow agent. Value was locked in this smart contract in the form of Bitcoin, only to be released upon the death of the insured, lapse of premium payments to the policy owner, or expiration of the term of the contract. In simple language, if the insured person dies during the term of the contract, then their estate gets all the value currently locked up on the Blockchain. In return, they pay a monthly premium to the party that put up the money.

Lately there has been a lot of negative noise about using blockchain for anything but value transfer, but I think this absolutely proves that it isn’t the case. There will be many small steps to make towards a future where insurance contracts are “smart”, but make no mistake, it is coming. One day we will have the ability to instantly be covered for any type of risk we choose, with any terms we choose, and companies or individuals will be able to take on that risk and be compensated for doing so… all on the Blockchain.