The underwriting process in the life insurance industry in the U.S. can be frustratingly deliberate, taking up to six weeks for a healthy individual to receive coverage provided a mandatory medical examination reveals no surprises. In an article on Daily Fintech, Rick Huckstep notes within the life insurance industry, “the top five choices for term life are all priced within a few dollars of each other,” This “race to the bottom” ultimately results in the commoditization of the product and also reduced the commission incentive for brokers. Rod Rishel cites similar statistics in his article featured in LIMRA’s MarketFacts Quarterly for Q3 2015, claiming “innovation in life insurance must extend beyond product development to product distribution.” LIMRA’s MarketFacts Q3 Magazine Cover
In response to consumer demands for quicker, easier service, Life Insurance Monitor firms began offering policies guaranteed acceptance life insurance policies that feature no underwriting and forgo medical exams. In 2015, MassMutual and New York Life joined MetLife and John Hancock as coverage group firms that provide these simplified life policies. Of these firms, John Hancock is only one currently promoting the simplified policy on its advisor site. These firms have indeed developed an innovative new product, but a similar quandary still exists in that they all offer virtually the same product. Further, they distribute that product directly to consumers, continuing to provide little incentive for brokers to sell the product.
Addressing this market void, a new company has emerged called INSQUIK that is selling a new life insurance product with a digital application process that provides a quote, a decision and an active policy in less than 10 minutes. INSQUIK is unique in that it is a platform designed for brokers. Brokers can create their own stores on INSQUIK by completing a five-minute registration process. Every broker’s store receives a unique URL that brokers can integrate into their own websites or email directly to prospects. Brokers are provided with INSQUIK’s white label solution but can customize it with their own colors and logo. Prospects therefore move through the INSQUIK application process operating under the belief that they are interacting directly with the broker without ever seeing the INSQUIK brand name. The public homepage advertises that INSQUIK lets brokers offer prospects a 10-year term policy of up to $350,000 of coverage. The INSQUIK platform makes it easier for brokers to sell life insurance because they can simply send the application directly to prospects or direct them to the online store. Previously, prospects interested in a simplified life insurance policy were forced to do a lot of the research themselves and individually apply for a policy. INSQUIK provides brokers with the means and incentive to reach out to prospects, promote and sell simplified life insurance.
INSQUIK Public Homepage
After brokers send the application to prospects, the process is straightforward, asking prospects three direct questions – age, state and tobacco history – and then immediately provides a quote. The subsequent underwriting process consists of 12 questions across three pages that delve a little deeper into the prospect, asking for information like recent hospital visits, criminal records, any long-term diseases and current disability payments. After clicking submit, prospects are required to wait about three minutes while the site investigates the prospect’s medical information, pharmacy report and motor vehicle report electronically. INSQUIK compiles the final offer based on the information garnered from these three agencies along with the answers to the questions on the life insurance application. If prospects accept that offer, their coverage begins immediately. This rapid process severely cuts down on lost sales due to a long waiting period.
First Step of Application Process
INSQUIK is still a developing product – it doesn’t offer a term to permanent conversion option and there is only the 10-year term product available – but it is undoubtedly an attempt to shake up the industry status quo. It will interesting to observe how the industry responds to the introduction of this product.