Dynamic NFT-Based Health Insurance with AI Risk Profiling

Abstract

Traditional health insurance models depend on fixed policy structures that often lack personalization and transparency. These static systems are slow to respond to individual health behaviors, which leads to inefficient premium calculations and rigid coverage terms. In this paper, we propose a decentralized and smart framework that allows real-time negotiation of health insurance coverage using dynamic non-fungible tokens (dNFTs) and AI-powered risk profiling. Our system uses Ethereum smart contracts to represent health insurance policies as dNFTs that change based on individual health metrics collected from wearable devices or electronic health records. A builtin machine learning engine evaluates user risk profiles in realtime, updating the dNFT metadata as needed. Insurers interact with the system through a decentralized marketplace, where they bid to provide personalized coverage terms based on the live health profile encoded in the token. The negotiation process is trustless, transparent, and automatic using smart contracts, which removes intermediaries and cuts down processing time. We show a working prototype deployed on the Ethereum testnet and assess it using simulated user data. The results indicate a noticeable improvement in policy adaptability, personalization, and claim settlement time. This approach has the potential to transform health insurance by making it dynamic, data-driven, and fully decentralized.