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New term market entrants target younger consumers with easy online applications and no exams

Brian Anderson

A new wave of insuretech startups is converging on the term life insurance market, looking to woo uninsured and underinsured millennials with quick, simple online applications using big data to generate quotes and approvals in minutes without medical exams. And they’re saying they can do it at prices competitive with fully underwritten term policies, which has previously been a hurdle that simplified issue policies have not been able to clear. This isn’t only for small amounts of coverage, either. One of the new products just unveiled this week offers policies with death benefits up to $1 million.

Some of these well-funded startups are partnering with established carriers such as MassMutual and Protective or reinsurance giants like Hannover Re. What’s missing? What these disruptors would call the middleman – otherwise known as the independent life insurance agent.

With multiple new online-only term products hitting (or about to hit) the market, aiming squarely at millennials, this seems like a good time to take a closer look at some of these startups and their products. Beyond SoFi on this page, click through to following pages for info about Haven Life, Ladder, and a new simplified issue product for credit union members from CUNA Mutual Group.

And to share thoughts or comments about this influx of new term offerings, please visit this discussion thread: Startups target online term market


SoFi partners with Protective for term life product aimed at Millennials

SAN FRANCISCO and BIRMINGHAM, Ala. – Fast-growing online lender Social Finance Inc. (SoFi) and Protective Life together this week announced a new term life insurance offering that provides up to $1 million in coverage through a simple, online application with “competitive pricing” and no medical exam for a majority of people under 40 – available today.

“This is a first in the industry: coverage in minutes without a medical exam in many cases, and at incredibly competitive prices,” said Andrea Blankmeyer, SoFi’s VP of Finance. “Protective has more than 100 years of experience providing valuable protection to nearly 8 million customers, and we’re happy to work together with them to deliver what we think is the easiest experience for buying term life insurance.”

SoFi, a fintech startup launched in 2011 that made its name by helping top-tier college graduates refinance student loans at low interest rates, has been expanding with the addition of personal loans, mortgages, wealth management and other financial services.

A Bloomberg article earlier this year noted that CEO, Chairman and Co-Founder Mike Cagney has a goal of eventually rendering banks obsolete. Turning millennials into lifelong customers by making them feel like they’re a part of an elite community is part of that strategy. SoFi refers to its customers as “members” and “HENRYs” (High Earners Not Rich Yet).

In 2015, the company issued $5 billion in loans and is on pace to double that this year, the Bloomberg article said. SoFi uses a variety of criteria to underwrite its loans, which allows it to maintain a low default rate, including an applicant’s free cash flow, history of paying bills, education and résumé.

The company was known to be looking to add life insurance earlier this year, as the millennials which comprise a large portion of SoFi’s member base are especially in need of adequate life insurance coverage as they hit major financial and personal milestones, like home ownership and starting families. SoFi may be well positioned to capitalize on that demographic thanks to its already sizable base of young customers. According to 2016 LIMRA Ownership Study data:

• Millennials are least likely of all generations to have existing life insurance coverage

• 1 in 3 households would have immediate trouble paying living expenses if they were to lose their primary wage earner, with millennial households most at risk

• Millennials overestimate the cost of life insurance premiums by 213%, causing them to delay getting coverage

“Protective is pleased to work with the talented team at SoFi on this innovative new product which is designed to meet the rapidly evolving expectations of younger consumers,” said Aaron Seurkamp, Chief Sales Officer at Protective. “We have specifically designed the product to make it easy and convenient for SoFi members to get the financial protection they need.”

The policies will be issued by Protective Life Insurance Company, which offers full customer support. Applicants who prefer to speak to someone in person will have the option of talking with a licensed Protective insurance advisor over the phone.

About SoFi: SoFi is a new kind of finance company taking a radical approach to lending, wealth management and insurance. From unprecedented products and tools to faster service and open conversations, SoFi all about helping members get ahead and find success. Whether they’re looking to buy a home, save money on student loans, ascend in their careers, or invest in the future, the SoFi community works to empower members to accomplish the goals they set and achieve financial greatness as a result. For more information, visit SoFi.com.

About Protective: Protective Life Corporation provides financial services through the production, distribution and administration of insurance and investment products throughout the U.S. Protective Life Corporation has its home office in Birmingham, Ala., and is a wholly owned subsidiary of Dai-ichi Life Holdings, Inc. As of Sept. 30, 2016 the Company had assets of approximately $76.2 billion. The flagship subsidiary, Protective Life Insurance Company, was founded in 1907. For more information visit www.Protective.com.

• Are these types of new online, no med term products that strive to compete on price with fully underwritten term policies and aimed at millennials of concern to independent agents? Please comment on this thread: New term products target millennials, miss agents

Haven Life introduces InstantTerm for up to $1 million in coverage

NEW YORK – Haven Life in late September introduced InstantTerm: a “ridiculously easy solution for buying fully underwritten term life insurance entirely online without a medical exam – and all at the same affordable rate,” according to a release announcing the product.

Haven Life, backed by MassMutual, says it has continually developed an easier way for customers to protect their family’s financial future. Last year, Haven Life transformed the “confusing, several-week process” of buying life insurance into one that can be accomplished online in 20 minutes. But, a medical exam was still required for all applicants to finalize coverage.

The introduction of InstantTerm allows for qualified, healthy applicants to purchase up to $1 million in coverage without a medical exam and “without overpaying for the convenience.”

Haven Life is now available in 43 states, including the recent addition of its home state of New York.

“Life insurance ownership rates are at an all-time low, and despite knowing that, the industry has done little to innovate,” said Yaron Ben-Zvi, Co-Founder and CEO of Haven Life. “From Day one, we set out to drastically change the life insurance buying process which included pretty ambitious goals: to provide an instant decision on coverage and to remove the need for a medical exam for as many of our customers as possible. As of [Sept. 21], we’ve accomplished both, and we’re not done improving.”

In its product release announcement, Haven Life noted that up until now, “no exam” life insurance has been very expensive when compared to fully underwritten policies and didn’t provide the ample coverage most families need. As a rule of thumb, experts recommend between five and 10 times annual salary, yet many insurers limit “no exam” coverage to under $250,000. And many of these simplified issue policies cost at least twice as much as fully underwritten coverage, the Haven Life release said.

Haven Life says it has completely changed this. Qualified, healthy applicants can apply for and, upon approval, start Haven Term coverage immediately – no medical exam required and no increase in cost for the convenience. Instead of needing a medical exam to finalize coverage, Haven Life says its sophisticated technology analyzes the health information that customers have already provided in the application and taps third party data sources to make a decision in real time. All of this made possible by Haven Life’s proprietary underwriting platform.

“InstantTerm is powered by our own real-time underwriting platform, which enables us to process applications and come to a confident decision immediately – something no one else in the industry can do for a fully underwritten policy,” said Ben-Zvi. “The underwriting platform’s high level of accuracy in developing rate profiles for our customers enables MassMutual, which issues the Haven Term policy, to keep risk within acceptable levels while also allowing us to innovate our process further and maintain the same, affordable pricing. It’s life insurance coverage that the modern customer expects.”

This announcement immediately follows Haven Life’s recent expansion into New York.

For more information visit havenlife.com.

About Haven Life: Haven Life, launched in May 2015,is a tech-focused life insurance agency that offers a simple, affordable solution for buying fully medically underwritten term life insurance entirely online. We’re transforming the typically time-consuming and confusing process of buying life insurance into one that’s easier, faster and just plain better.

Haven Term is a Term Life Insurance Policy (DTC, ICC14DTC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111 and offered exclusively through Haven Life Insurance Agency, LLC.

Ladder raises $14 million Series A to ‘re-engineer’ life insurance

MENLO PARK, Calif. – Digital term life insurance product startup Ladder announced in late October it has closed a $14 million Series A led by Canaan Partners with participation from Lightspeed Venture Partners, NYCA, and 8VC.

From a release announcing the funding round:

Life insurance has traditionally been sold through the analog agent channel. Insurance carriers rely on commissioned agents, and the resulting consumer experience is not what today’s financially savvy, modern consumer expects. Traditional insurance products can be murky, with expensive investment solutions baked in. Ladder offers pure, term insurance, which is generally the best, most cost-effective option for consumers.

“We started Ladder because it’s time for better life insurance,” says Jamie Hale, CEO of Ladder. “We are taking a holistic approach and using cutting-edge technology to redesign life insurance entirely around the end user.”

“Insurance technology is a ripe market for disruption because the current process is completely antiquated,” said Brendan Dickinson of Canaan Partners. “Ladder is addressing a $20 trillion coverage gap with a fundamentally new customer experience predicated on the ability to fully underwrite in real time.”

Ladder began by streamlining the core insurance product and architecting a way to manage risk in real time. With that foundation in place, it is re-engineering the process of buying life insurance to bring it in line with today’s consumer expectations.

“To be successful in the fintech space, and in particular insurance tech, you need a blend of industry, product, and marketing expertise, as well as the ability to reimagine how data and distribution coexist,” said Will Kohler of Lightspeed Venture Partners, who led Ladder’s initial financing. “Ladder has world class talent across each of these areas, and they are clearly dedicated to building something that matters.”

The company also recently announced a joint partnership that will couple Ladder’s technology-driven, smart life insurance offering with Hannover Re’s risk management and automated underwriting solutions. The result, according to a release announcing it, is “a seamless, transparent life insurance experience that consumers not only feel confident in, but is also efficient and beautifully designed.” The benefits of this partnership will be available immediately upon Ladder’s consumer launch in the coming months.

“Ladder is making a huge advancement in the InsurTech space,” said Peter Schaefer, president and CEO of Hannover Re US. “As the industry continues to move toward tech-savvy consumers, we will continue to develop market-leading solutions to support agile underwriting, improved risk selection, and a better consumer experience.”

Today, users can visitwww.ladderlife.comto explore insightful content, obtain a quote, and sign up for early access to be one of the first to receive coverage in minutes.

About Ladder: Ladder is the smart, modern way to insure your life. Founded in 2015, Ladder’s first-of-its-kind, digital life insurance product is designed around serving today’s financially savvy consumer, and architecting a way to structure the risk securely and in real time. Ladder is headquartered in Menlo Park, CA. For more information, visit:www.ladderlife.com/about.

• Are these types of new online, no med term products that strive to compete on price with fully underwritten term policies and aimed at millennials of concern to independent agents? Please comment on this thread: New term products target millennials, miss agents

• EDITOR’S NOTE: Due to a linking error, some newsletter visitors were inadvertantly directed to this 4th page of the article instead of the first page. Go to 1st page of this article by clicking HERE

CUNA Mutual Group debuts simplified issue term life

MADISON, Wis. — CUNA Mutual Group’s new TruStage simplified-issue term life insurance product is quickly catching the attention of credit union members due to its entirely online consumer purchase experience, according to a release announcing its debut on Nov. 16.

After answering just two health questions, a completely automated underwriting platform delivers a decision in minutes.

Designed using direct consumer feedback, retail best practices and particularly appealing to the needs of younger consumers, coverage face amounts range from $5,000 to $100,000 to provide protection for home mortgages, children’s education, income replacement and final expenses.

TruStage, CUNA Mutual Group’s consumer brand, is one of the first to market with a term life insurance product that consumers can purchase entirely online. With this capability, members can purchase and service the entire suite of TruStage products, including: accidental death and dismemberment, whole life, term life, auto, home and health insurance, entirely online.

“We are changing how life insurance is purchased by starting with the overall experience first,” said Susan Sachatello, senior vice president, TruStage. “Life insurance is an emotional purchase, and we understand it must be simple and easy for the consumer to secure a coverage amount they know they can afford and feel comfortable with.”

With protection of a loved one often being the buyer’s motivating factor, the online application asks for the name of the beneficiary at the beginning of the process. The application displays the beneficiary’s name at every step of the process to remind the buyer who they are protecting.

The product targets a younger demographic, with a starting issue age of 25 and rates starting at $3.65 a month* through an online channel that’s been traditionally unavailable for life insurance purchases. The product provides coverage options based on the buyer’s budget rather than forcing them to select a specific coverage amount. Since the launch in late June, an estimated $20 million has been issued to policyholders online.

The product, currently available in 30 states, was developed using the iterative “Agile” process and took only six months from concept to market launch. This new term life product is an example of CUNA Mutual Group’s emphasis on investing in technology, mobile and new digital channels to support credit unions and consumers for the future.

“It is important that we continue to identify and invest in new ideas and solutions that address consumers’ evolving needs to protect their financial future. That protection starts with easily accessible and affordable life insurance coverage,” said Sachatello.

About CUNA Mutual Group: CUNA Mutual Group helps people plan, protect and invest for their future – regardless of their financial standing. The company was founded more than 80 years ago by credit union leaders who were looking for an insurance partner they could trust. Today, CUNA Mutual Group helps credit unions and hardworking people build financial security through commercial and personal insurance products; lending and payment security solutions; and risk management, retirement, investment and marketing services. Additional information about the company can be found at www.cunamutual.com.

• Are these types of new online, no med term products that strive to compete on price with fully underwritten term policies and aimed at millennials of concern to independent agents? Please comment on this thread: New term products target millennials, miss agents



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