Ethos Life Insurance is a relatively new company that has shown a firm grasp of where the future of the life insurance industry is headed. They combine this forward-thinking approach with the necessary skills and expertise to become a leader in the industry.
The company’s use of technology, combined with strong partnerships with many industry-leading life insurance companies, makes Ethos a smart choice for anyone looking to purchase life insurance conveniently from the comfort of their own home.
However, it is important to note that Ethos is just one of many nationwide insurance brokerages offering similar services. Therefore, we would like to take a moment to provide our readers with more information about Ethos Life, helping them to decide whether applying for coverage through them is the right choice.
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About Ethos Life Insurance
Ethos Technologies, Inc. is an online life insurance broker headquartered in San Francisco, doing business under the name “Ethos Life” or simply “Ethos”. Established in 2016 by a couple of Stanford Business School graduates, the company observed a potential entry point into the life insurance brokerage market by using predictive algorithms to bypass the traditional underwriting process. Ethos’s founders believed that this approach could simplify and speed up the application process and capture the business of a younger, tech-savvy clientele.
Although Ethos Life has policies available for a wide range of ages, the company’s business model is built around marketing straightforward term life policies to young, healthy insureds. For eligible applicants, Ethos’s platform can provide fully underwritten no-exam term life insurance coverage. Ethos Life has developed sophisticated software that predicts longevity as well as a traditional medical exam, or so the company asserts. However, the algorithm is designed to identify the lowest-risk insureds, so many applicants outside the company’s sweet spot (in terms of age and medical history) won’t be eligible for fully underwritten rates without an exam.
For those applicants, Ethos offers simplified-issue term and guaranteed-acceptance whole life policies, which have progressively lower underwriting requirements. Importantly, Ethos Life is not itself a life insurance company. Instead, it acts as an online broker, connecting applicants to insurers using the lure of a simple, time-efficient application process.
Ethos only has four life insurance carriers in its network so far, and only one of those is issuing fully underwritten coverage relying on Ethos’s system. Therefore, Ethos customers can’t compare policies and rates between companies using Ethos alone. Nonetheless, Ethos can be a time-saving option for relatively young, healthy insureds who want straightforward term coverage and prioritize speedy application over rate comparison.
For a young company, Ethos has garnered considerable investment capital, with over $100 million according to the company’s website. Therefore, a few venture capitalists, including Sequoia, Goldman Sachs, and Robert Downey Jr., among others, apparently believe that the idea behind Ethos Life has a strong chance of succeeding.
What Kinds of Life Insurance does Ethos Sell?
Ethos Life focuses on selling level-term policies underwritten by Legal & General, Ameritas, and TruStage. A final-expense whole life policy issued by AAA is also available for older applicants.
The flagship offering marketed by Ethos is a fully underwritten level-term policy issued by Legal & General, aka Banner Life Insurance.
Policy limits range from $50,000 all the way up to $1.5 million.
Policies are available with term lengths of 10, 15, 20, or 30 years, with annual renewal available (for a much higher premium and potentially lower coverage) when a policy’s initial term ends.
The L&G-backed term policies are available for new applicants from ages 20 to 65, though extended term lengths are limited for older applicants.
Although the L&G term policies are “fully underwritten,” a medical exam is not usually required.
Instead of an exam, the underwriting relies on a thorough online application that screens out high-risk insureds. In addition to brokering, Ethos also serves as third-party policy administrator for the fully underwritten term policies.
So, if you purchase coverage, you’ll keep doing business with Ethos—making policy elections and paying premiums through Ethos’s website (which is fairly user-friendly).
Ethos’s other term policies (issued by Ameritas and TruStage) are “simplified issue,” which means the underwriting review only considers information provided in the application and within medical reports accessed by Ethos.
The TruStage and Ameritas policies don’t require a medical exam and are geared toward individuals whose age or medical history might make qualifying for fully underwritten coverage more difficult.
Applicants for simplified issue policies are able to obtain a coverage decision with very little delay but usually end up paying premium rates notably higher than what is available with fully underwritten policies.
Along with the term life options, Ethos offers a single permanent policy that’s only available for a narrow range of insureds.
AAA Final Expense Insurance
For retirement-age applicants, Ethos has a final expense insurance policy, which is a guaranteed-acceptance (a/k/a “guaranteed issue”) whole life policy issued by AAA.
As a “guaranteed issue” policy, there’s essentially no underwriting during the application—anyone who is in the right age bracket and able to pay the premiums can get covered.
Guaranteed-acceptance whole life policies have higher premiums and usually provide less coverage than term, but they can be a workable option for people who are otherwise unable to obtain life insurance.
The whole life policy Ethos sells is essentially a final-expense policy, designed to cover estate expenses like funeral and burial costs, administration expenses, taxes, and estate debts.
Application is open to new insureds ranging from 65 to 85 years old—basically, if you’re past the age cap for the term policies, Ethos will sell you a AAA whole life policy.
Coverage amounts are fairly low, starting at $10,000 up to $25,000, and, as whole life, the policies accumulate cash value that can be tapped during the insured’s life.
Premiums are fixed, and policies are scheduled to be paid-up when the insured reaches age 100.
Guaranteed acceptance policies present a significant risk to insurance companies, as the company could be agreeing to insure someone who is in very poor health.
To mitigate some of that risk, Ethos’s whole life policies include a graded-benefit period lasting for two years after a policy is issued.
If an insured dies during that initial two-year window (and the death did not result from an “accident”), the death benefit is measured as the total premiums paid to date, plus 30%.
After two years, full coverage kicks in. Death resulting from an “accident” will trigger the full death benefit regardless of when it occurs.
What Services Does Ethos Life Provide to Consumers?
Ethos Life is an online independent broker that simplifies the life insurance application process. Most independent life insurance agents market various policies from multiple companies. This allows consumers to compare different rates offered by different companies and find the best deal for the ideal policy. Ethos has a different business model, with a streamlined approach that features an online application that can be quickly and easily completed.
Ethos’s primary advantage is that it helps relatively young and healthy individuals obtain fully underwritten term coverage in a relatively short time. This is usually not the case with “fully underwritten” policies, which typically require a medical exam. However, Ethos’s proprietary software can act in place of an exam, enabling eligible individuals to get the lower rates of a fully underwritten policy without any medical procedures.
The downside of this approach is that Ethos needs to convince insurance companies that its predictive algorithm is at least as accurate in predicting longevity as a medical exam. Thus, Ethos’s insurer network is small, and consumers cannot compare rates from multiple companies to determine whether they could get a better deal elsewhere.
Ethos offers convenience and efficiency, but the cost may be not getting lower rates from an insurer other than Legal & General. Ethos focuses on simple level term policies without any additional riders available, making it unsuitable for consumers looking for sophisticated policies such as universal life or whole life (other than final expense).
If you cannot qualify for the L&G policy, you can still choose one of the simplified issue policies Ethos offers. However, in that case, the convenience factor is less of an advantage since there are plenty of other insurers offering simplified issue term policies with brief application processes.
Ethos’s system has real advantages for the right applicants. Their goal is to make the life insurance process “more people-friendly.” If allowing applicants to obtain fully underwritten coverage without ever having to speak to actual people is “people-friendly,” then Ethos has succeeded. Avoiding face-to-face interactions is especially valuable in the era of COVID-19.
Ethos Life offers a quick and easy online application process exclusively for qualified applicants seeking term coverage, except for those located in New York. If you prioritize a hassle-free application process over finding the best rates available, Ethos may be worth considering. However, if you prefer permanent coverage or riders, are outside of Ethos’s target demographic, or want to compare rates from multiple insurers, it may be better to work with another independent broker.
For those who want to research life insurance, Ethos’s website has a decent amount of information about life insurance and their system. However, if you want to research whole life or universal life, you’ll need to look elsewhere as there is very little information on permanent coverage.
Ethos’s website also has a useful “instant quote” tool where you can obtain a preliminary rate range with only a small amount of basic information. If you like the range, you can enter more details to get an “instant quote.” Although the quote isn’t a firm rate offer, the process only takes about 15 minutes, and the quotes appear to be reasonably accurate, provided all requested information is entered accurately.