Author Topic: New trend - Instant approval life insurance  (Read 2662 times)

Offline hachover

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New trend - Instant approval life insurance
« on: March 20, 2017, 05:30:07 PM »
This post is intended as a PSA, not an attempt to convince anyone who doesn't want life insurance to go buy. There are threads for arguing about that.

To buy individual life insurance (in the US at least) in any significant amount without overpaying, you need to have your health (risk) assessed. In most cases, that includes having a (para)medical exam and providing fluids to be analyzed. The process of scheduling an exam and hearing back on the decision can take weeks and very few people enjoy having needles stuck in their arm. In fact, the purchase process is so invasive and tedious that many people who are otherwise interested in buying life insurance coverage do not because of the hassle factor (either start the process and do not finish or never start at all).

There is a new trend in underwriting which has insurance companies making instant decisions without taking fluids or asking for a medical exam. The entire process can be done online and is similar to applying for a credit card (with different questions, obviously). I picked that comparison intentionally  ;D

Many people do not know about this yet because it is so new and not very well advertised, and I hope by posting here I can bring it to the attention of people who can benefit. The demographic of DDF (socio-economic and age) is such that many people here are ideal candidates for this type of policy.

Some notes: The company will determine if you qualify for the instant decision. If you don't qualify there may be an option to get a medical exam, though you can also just say forget it at that point. The only policy you can buy this way is term life. It is not convertible to whole life. Some companies charge a bit more for their instant policies than you would pay for the old school one, but others (e.g. Haven) are super competitive in price. Compare your quote to dozens of other quotes on term4sale.com to see.

I can't say with certainty but my educated guess is that you will have a good chance to qualify for instant approval if you think that a medical exam would show you to be healthy (even if you smoke). Someone with a complicated medical history or a bad BMI probably has a low chance of getting instant approval and won't gain from this. Younger people stand a better chance and lower benefit amounts, though I'm sure up to age 40 and $1M should be fine.

The companies I know of who do this right now are:
HavenLife
Ladder Life (only in California)
Get Quilt (only in Florida)

I'd be happy to answer any questions in the thread or by PM. Also, if anyone has experience with this I'd be very interested to hear any details you don't mind sharing as a data point.
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline bubkiz

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Re: New trend - Instant approval life insurance
« Reply #1 on: March 20, 2017, 06:28:09 PM »
Very interesting. They are within a dollar of "traditional" term life companies including Banner Life. Any cons?

Offline bades

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Re: New trend - Instant approval life insurance
« Reply #2 on: March 20, 2017, 06:44:31 PM »
There are multiple A rated or better instance carriers that have been offering this for quite a while

Offline htg123

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Re: New trend - Instant approval life insurance
« Reply #3 on: March 20, 2017, 07:11:54 PM »
Thanks OP for your post. I think life insurance is very important for someone who has a wife and/or kids. It's about time that the US has finally joined the bandwagon with the rest of the world. Other Western countries life policies don't require a full-on medical, usually just an online questionnaire. Quite ironic that most of the life insurance companies are underwritten by US companies and yet, they usually won't require a medical assessment with bloods/fluids.

Offline hachover

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Re: New trend - Instant approval life insurance
« Reply #4 on: March 20, 2017, 07:12:28 PM »
There are multiple A rated or better instance carriers that have been offering this for quite a while

Who are they?

Eta: I'm aware this is not breaking news. Even Haven has been around more than a year. I'd be interested to know who else is doing this. For me getting people insured is a calling.
« Last Edit: March 20, 2017, 07:16:46 PM by hachover »
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline hachover

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Re: New trend - Instant approval life insurance
« Reply #5 on: March 20, 2017, 07:14:07 PM »
Very interesting. They are within a dollar of "traditional" term life companies including Banner Life. Any cons?

What do you mean by cons? Company stability? MassMu is stronger than Banner for sure. Rights to convert? If you value that.
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline AsherO

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Re: New trend - Instant approval life insurance
« Reply #6 on: March 20, 2017, 07:18:02 PM »
Didn't read yet, but waiting for ExGingi's comments.
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Offline hachover

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Re: New trend - Instant approval life insurance
« Reply #7 on: March 20, 2017, 07:21:02 PM »
Thanks OP for your post. I think life insurance is very important for someone who has a wife and/or kids. It's about time that the US has finally joined the bandwagon with the rest of the world. Other Western countries life policies don't require a full-on medical, usually just an online questionnaire. Quite ironic that most of the life insurance companies are underwritten by US companies and yet, they usually won't require a medical assessment with bloods/fluids.

Is there such a thing as "preferred" ratings in the rest of the western world of life insurance? I've always been under the impression that the medical exam was to tier pricing for healthier people and the expense of less healthy people. In otber countries isn't everyone pretty much in standard classes?
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline AsherO

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Re: New trend - Instant approval life insurance
« Reply #8 on: March 20, 2017, 07:26:45 PM »
Who are they?

+1, I'm wondering this as well.

OP, how do they get around adverse selection?
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Offline hachover

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Re: New trend - Instant approval life insurance
« Reply #9 on: March 20, 2017, 07:30:15 PM »
+1, I'm wondering this as well.

OP, how do they get around adverse selection?

They are doing underwriting using health records they can access electronically, such as presciption database, motor vehicle and credit records, etc. That, and your answers to the health questions get plugged in to a predictive model to assess risk.

I have no idea if it works as well as it would need to work to prevent adverse selection. I bet some things get through that shouldn't. I also bet that they are viewing that potential as a cost of learning and being an innovation.
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline AsherO

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Re: New trend - Instant approval life insurance
« Reply #10 on: March 20, 2017, 07:32:49 PM »
They are doing underwriting using health records they can access electronically, such as presciption database, motor vehicle and credit records, etc. That, and your answers to the health questions get plugged in to a predictive model to assess risk.

I have no idea if it works as well as it would need to work to prevent adverse selection. I bet some things get through that shouldn't. I also bet that they are viewing that potential as a cost of learning and being an innovation.

Interesting. So bad credit is correlated with shorter life-expectancy?
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Offline hachover

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Re: New trend - Instant approval life insurance
« Reply #11 on: March 20, 2017, 07:33:50 PM »
Interesting. So bad credit is correlated with shorter life-expectancy?

I have no idea. Every company can set their own underwriting standards. So some companies may use that information and some may ignore it.
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline AsherO

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Re: New trend - Instant approval life insurance
« Reply #12 on: March 20, 2017, 07:36:36 PM »
I have no idea. Every company can set their own underwriting standards. So some companies may use that information and some may ignore it.

I would imagine they use statistics, and not just make it up. Hence I'm asking if they have evidence that credit is a factor in life expectancy.

Are you in the LI business?
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Offline hachover

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Re: New trend - Instant approval life insurance
« Reply #13 on: March 20, 2017, 07:39:26 PM »
I would imagine they use statistics, and not just make it up. Hence I'm asking if they have evidence that credit is a factor in life expectancy.

Are you in the LI business?

Yes. But I don't know if they have evidence that it matters or even if they use it. All I know is how the rules engines are designed to pull information on an applicant, and then its up to the company to decide what they deem important.

I monitor developments in the LI industry. I'm not the kind of expert you'd need to get those answers.
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline JTZ

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Re: New trend - Instant approval life insurance
« Reply #14 on: March 20, 2017, 07:48:26 PM »
What risk do you run if you fudge on the questions like many do with CC apps?
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