Life by Spot, the life insurance firm that Corporate Insight first examined in January, is now offering short-term policies for adrenaline junkies, emailing interested prospects to announce the launch a few weeks after going live. Getting a quote from Spot’s website is quick and relatively simple: the questions are of the yes-or-no variety, including whether a prospect has had a recent heart attack or is terminally ill. Thrill-seekers then select which high-risk activities they will be undertaking, and the firm provides quotes for $50,000, $100,000 or $200,000 in coverage on policies lasting one to 30 days. Policies may be bought up to 30 days in advance. Spot claims the activities selected do not affect policy prices, i.e., the firm insures cliff jumpers the same rates as domestic travelers.
But even an extreme life insurer imposes some limitations. Spot currently only offers policies to residents of 40 states, and policy holders must be U.S. citizens or 10-year green card holders between the ages of 18 and 64. Certain activities prompt further restrictions. Spot will only cover scuba divers certified for their planned dives, and rock climbers must confirm that they will be using a rope for climbs over a certain difficultly level. (The firm asks bachelor/bachelorette party attendees whether Mike Tyson will be making an appearance, a question we suspect is tongue-in-cheek but may also encourage prospects to lie during a life insurance application process—something generally frowned upon.)
Spot has also fleshed out its website, unveiling About, FAQ and Contact sections. In particular, the FAQ page reveals more about the firm and its policies, including how to file a claim and that thrill seekers are covered no matter how they die (as long as they were truthful on their application). Policy holders can also cancel their policy up to 24 hours before the start date.
One potentially interesting wrinkle: Spot covers military deployment, another activity that traditional insurers can be reluctant to tackle. Corporate Insight was able to get a quote for overseas military deployment without answering questions about the country of deployment. It’s unclear whether Spot asks military members during the actual application whether they’ll be doing paperwork in Germany or defusing bombs in Iraq, but the distinction seems key. Spot may have found another opportunity in the life insurance market, or an accidental method for gathering information on secret military missions, should every member of Seal Team Six buys a one-day policy for the same date.
Life insurance is a well-established product, but Life by Spot is upending that traditional timeline. Corporate Insight is interested to see how the firm irons out the inevitable wrinkles. Traditional life insurers have decades- or life-long relationships with their policy holders, but Spot’s policies last at most 30 days and can be bought 30 days in advance, meaning that the insured-insurer relationship has a maximum shelf life of 60 days. Will this short window discourage prospects from filling out and signing an actual application? Can Spot develop repeat buyers? Will the firm introduce the first ever life insurance loyalty program?
Last time, we wondered whether the need for short-term life insurance exists. We still wonder whether thrill-seekers will decide to seek out life insurance, but we also now wonder whether that even matters. As previously noted, Spot plans to secure partnerships to offer its policies at checkout for high-risk activities. If so, need may prove irrelevant. Anyone who’s ever bought a candy bar from a supermarket checkout can testify that need has little influence on decisions made during checkout. Spot’s real disruption may be introducing the impulse purchase to the life insurance market.