When you’re used to ordering everything with a tap on a screen and getting it fast, buying life insurance can seem painfully old-school.
Until recently, if you wanted a lot of life insurance at a low price, you had to fill out paperwork, undergo a life insurance medical exam, give a urine sample or get blood drawn, then wait 30 to 90 days to get a policy.
But that’s changing. Some companies are making getting life insurance easy and quick. Applying online takes minutes, and many people can buy up to $1 million of life insurance right away without taking a medical exam.
Not your grandma’s no-exam life insurance
These policies aren’t like the small and pricey no-exam life insurance policies marketed to seniors.
These companies use a process called “accelerated underwriting.” They take information from the application, pull other data about you, and use algorithms and artificial intelligence to calculate your risk of dying early. In many cases that process provides enough information for the company to make a quick decision and offer competitively priced coverage on the spot.
“You can get the coverage you need as fast as you can type,” says Jamie Hale, CEO of Ladder, one of the providers of instant term life insurance.
These companies use a process that often provides enough information to make a quick decision and offer competitively priced coverage on the spot.
As the software gets smarter, the need for physical exams to get life insurance will diminish even further.
“We are on the forefront of that shift,” says Melbourne O’Banion, CEO and co-founder of Bestow.
Life insurers want to make it easier to buy coverage so they can sell more policies. Many people forgo the coverage they need because the traditional buying process is inconvenient, says Haven Life co-founder and CEO Yaron Ben-Zvi.
Who offers instant life insurance
- Bestow, which launched in 2017, sells policies issued by North American Company for Life and Health Insurance in all states except New York.
- Ethos launched in June 2018 and offers policies from Assurity Life Insurance Co. in all states except New York.
- Haven Life, owned by insurer MassMutual, launched sales in May 2015 and offers coverage nationwide.
- Ladder, which launched in January 2017, sells policies nationwide. Policies are issued by Fidelity Security Life Insurance in 49 states and D.C. and in New York by Allianz Life Insurance Company of New York.
How it works
- You see quotes and apply online by answering some health questions.
- With your permission, the company retrieves information about you from a variety of databases. For example, it can find out what medications you’ve taken by checking prescription databases. It can check your motor vehicle record to see if you’ve had any driving violations. And it can check data from the MIB Group to determine if any health conditions came up when you applied for individual health or life insurance with other companies. Owned by its member insurance companies, MIB maintains a database of information from insurance applications.
- You learn if you’re approved immediately after filling out the application.
No one who is approved for coverage by Bestow has to take a medical exam. People with health issues might have to take a medical exam with Ethos, Haven Life or Ladder. (Learn about what to expect from a life insurance medical exam.)
With Haven Life and Ladder, you still get covered right away if you’re approved. The companies set the final price after the exam results come back. With Ethos, you’ll wait until after the exam to get a final price and buy coverage.
But only about 1% of applicants who qualify for coverage with his company have to take a medical exam, says Ethos CEO Peter Colis. “It truly is next-generation life insurance,” he says. “We want to make it as easy as getting a plane ticket.”