There’s not much cool factor in life insurance. Many of the common perceptions of the industry as staid and frightenly conservative have some basis of truth behind them. Finally, something exciting in the world of life insurance. Hybrid term life insurance. Let’s take a look at one of the many shoots of innovation now entering the market much to your benefit.
We have wondered when the life insurance industry might follow health insurance in the transformative change towards better and more user friendly tools and processes. Hybrid life insurance is an indication that it’s finally started. Just to give you some background, I have a great deal of experience in the health insurance and life insurance market. It was always frustrating to watch the sluggish movement that life insurance made in light of health insurance adoption of online applications, instant underwriting in some cases, and a rich plethora of plan options. Let’s face it…life insurance is a conservative industry for a reason…it needs to be in some respects but that shouldn’t stifle innovation. This brings us to hybrid life insurance.
We are quietly excited about this new product. First a quick lay of the term life insurance landscape. In a simplified view, we have underwritten term life plans which is majority of the market and probably what you’re thinking of when shopping for life insurance. A new addition to this traditional life option is no medical life insurance. This address the need for people who may be unable to qualify for standard underwritten life policies. Hybrid is somewhere in the middle. We expect a big push in this direction and in general, we think it’s a great benefit for life insurance shoppers.
Hybrid life insurance combines an almost instant and simplified approval for life insurance associated with accidental death. This is based on a few health questions and no paramedical exam. You then have a period of time in which to get a paramedical exam…say six month to extend this dollar amount to all standard causes of death. The benefit is that the pricing is closer to the traditionally underwritten life insurance plans while the underwriting process is closer to the no medical life insurance plans. Traditional life underwriting is usually cheaper (depending on health) but takes a while to process. No medical is usually more expensive (per dollar of coverage) but process very fast (if not instantly). Hybrid life insurance, as it’s name denotes, is a nice middle ground. Fast underwriting for accidental death with the option to more fully underwrite (via the paramedical exam) in order to get the better rates of a traditional plan.
This is all relatively new so information is coming out all the time. We would be happy to run a hybrid life insurance quote in addition to the other plans on the market through our term life quote request form. It’s hard to get excited about life insurance but for now, this is as close as we come. Let’s hope it’s the beginning of a sea change in life insurance market innovation. As always, we are constantly scouring the market for new and affordable life insurance options for our clients. As your licensed independent broker, that’s our job.