What is an Insurtech D2C Life Insurance Platform?
Insurtech Startups use technology to automate the entire Life Insurance sales and application process. As is the GOAL of technology, in all things: the objective is to streamline— to create better pricing, savings, and efficiencies.
Defining Direct-to-Consumer (D2C) Life Insurance: The entity/carrier solicits and fulfills life insurance policy without the customer using an intermediary such as an agent/broker or independent call center.
Society of Actuaries
How is Technology Changing [Some Say: Disrupting!] the Life Insurance Industry?
AI (artificial intelligence) handles the entire sales and underwriting process, as well as ‘customer service’ for existing policies. In essence, there is no ‘live human’ sales agent, broker, or underwriter. This means, automated assumptions (algorithmic formulas) are deciding whether or not you ‘fit the profile’. If you do, great!!!— a D2C Life Insurance Platform may be an excellent option for you!!
Consumers Who ‘FIT THE PROFILE’ Can:
- review life insurance quotes
- apply for life insurance without medical exam
- get an approval within a few short minutes
- buy Life Insurance ***for less money***
- manage policies through a mobile app or website
***Warning! Life Insurance Policies purchased via a D2C Platform are NOT necessarily cheaper. In fact, apart from Haven, the rest are actually expensive. And, Haven’s prices can be beat by Protective, AIG, Banner, along with a few others. It is always important to get competitive quotes … take the time to shop around! ***
There are Many Examples of Insurtech Startups Focused on the Life Insurance market—
Here are Just a Few:
***INSURANCE IS A HEAVILY REGULATED INDUSTRY***
Because of this, many large established Life Insurance Companies had huge reservations about this technology: they were hesitant to work with ‘disruptors’ (Insurtech Startups) and slow to embrace change. For the exact same reason, Insurtech Startups NEED the help of traditional Insurance Companies to underwrite and manage risk.
Is it the Right Choice for Everyone?
No, Definitely NOT!
(at least, not yet)
Is it Here to Stay?
Of Course it is!
Have you ever used a D2C Life Insurance Platform to get a quote, apply for, or buy Life Insurance?
As these D2C Life Insurance Platforms gain more and more momentum —consumer interest and demand— all the big old industry giants will eventually be forced to adopt new technologies, or… go the way of the dinosaur.
Direct-to-Consumer (D2C) Life Insurance Platforms—
Cost Comparisons & Sample Quotes
Pros & Cons of D2C Life Insurance Platforms
Pros
Easy, fast, and efficient application process
Quick instant approvals
Ease and convenience of managing your policy on website portal or mobile app
Cons
Currently, no way to compare multiple company prices at one time on website portal
(with Ladder, for example, you can only buy life insurance from one company that is rated A- by A.M. Best for financial strength)
Most only sell term life insurance. This means your policy will expire at age 80 or before. What happens if you are still alive and need life insurance?
Not eligible to buy life insurance, if you are older than age 60
D2C platforms use algorithms to underwrite, which tend to automatically ‘rule out’ (reject!) people who are not in excellent health. Obviously, Life Insurance companies make the most money when you are young and healthy and outlive your policy. You paid premiums for all those years, and —in the end— the life insurance company did not have to payout a claim.
Frequently Asked Questions About Insurtech D2C Life Insurance Platforms
What is the purpose of Insurtech Innovations in Life Insurance?
The purpose of Insurtech is to allow the consumer to quickly and conveniently purchase insurance through the use of technology.
Does Insurtech help make the price of Life Insurance less expensive?
Yes and No. Streamlining the process CAN (or rather SHOULD) ‘technically’ reduce the cost of life insurance. However, as mentioned above: Life Insurance Policies purchased via a D2C Platform are NOT necessarily cheaper. In fact, apart from Haven, the rest are actually quite expensive. And, even Haven’s prices can be beat by Protective, AIG, Banner, along with a few others. It is important to get competitive quotes … take the time to shop around!
What is the Impact of Insurtech Innovations on Customer Service?
You can buy and manage your policy (using an app or website) very quickly and easily, but there is ***no one to call or ask*** if/when you need assistance or have any questions. Life Insurance is NOT a “ONE-SIZE-FITS-ALL” product… and —regardless of whether it is sold to you by a ‘robot’ OR a ‘real live humanbeing’— WE ARE NOT ALL THE SAME!
Are D2C Life Insurance Platforms Safe and Secure?
This depends entirely on which one you use.
Remember, there are NOW hundreds of these D2C Platforms out there… All with different backers and developers, all at various stages— ranging from brand new startups (who literally rolledout mobile apps, yesterday!); to… ‘well-established’ 5-year-olds. O.o Each surely has their own unique ‘growing pains’. Some boast huge success stories. And some, like HealthIQ; are no longer even in the game!
Life Insurance Companies are embracing insurtech, at a rapid pace, but —if you’re NOT young & healthy— D2C Platforms offer you few options!
LUCKILY, FOR THE REST OF US; THERE ARE OTHER OPTIONS:
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There is no doubt, technology is here to stay— in every aspect of our lives. Life Insurance is no exception!
It is nearly impossible to keep up!!
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The Bottom Line?
There is no doubt, technology is here to stay— in every aspect of our daily lives.
More and more Life Insurance Companies will embrace and adopt these technologies, at a rapid pace; because today’s consumer demands quick / easy / cheap ways to buy EVERYTHING: why would Life Insurance be any different!!!
Also, Insurtech innovations allow Life Insurance Companies to streamline the sales and administrative process, which —in turn— will add to their profit margins, benefiting the company’s bottom line.
But… what about YOU: the Customer who does NOT ‘fit the profile’… the one who is actually more likely to have a greater interest in and need for Life Insurance products?
If you are NOT young enough OR healthy enough to qualify, currently these D2C Life Insurance Platforms offer you little to NO options— at all!
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