SoFi has a new life insurance partner – trading long-established carrier Protective for fellow startup Ladder as its new provider of term life insurance for its base of primarily Millennial consumers.
SoFi (short for Social Finance), the fintech unicorn best known for its lending products, announced the new partnership with Ladder on Tuesday. SoFi had originally partnered with Protective in November 2016 to offer up to $1 million in term life insurance issued by Protective Life Insurance Company.
The new agreement with Ladder is intended to give consumers more flexibility when it comes to life insurance, as well as a better understanding for Millennials of how life insurance can fit into their larger financial puzzle.
As of July 17, people can go to www.sofi.com/life-insurance to calculate their needs and get a quote for fully underwritten life insurance offered by Ladder. Founded in 2015, Menlo Park, Calif.-based Ladder sells its term life policies in 49 states (and is pursuing a license in New York), written by Fidelity Security Life, with 10- to 30-year coverage limits ranging from $100,000 to $8 million.
With Ladder’s digital platform, consumers can complete the entire process in a matter of minutes, versus the 6-8 week average wait time associated with the traditional process. According to a statement announcing the agreement, “Ladder and SoFi share a consumer-first approach for designing smart financial services and this partnership is a prime example of the innovation that is possible when the industry’s new, tech-focused players join forces to make life easier for today’s consumer.”
The statement goes on to say tech-savvy, self-directed consumers are increasingly turning to digital platforms to manage their financial lives – on their own time, when and where it’s convenient for them. While traditional financial institutions may recognize this demand for digital solutions, their ability to deliver them can be hindered by the legacy technology and manual processes upon which their organizations rely. Ladder and SoFi have launched smart solutions that enable consumers to achieve financial well-being, without the complexities or burdensome processes associated with many traditional financial institutions.
“There’s a clear synergy between Ladder and SoFi’s offerings,” said Ladder co-founder Jeff Merkel. “This partnership further demonstrates how companies built on modern technology platforms can collaborate to streamline solutions for today’s consumers.”
Life insurance is an important element of financial planning, particularly for people who are paying off school loans, buying homes, and managing their investments. By integrating access to Ladder, SoFi claims it is making it easy for their members to check life insurance off their financial to-do list – in many cases, instantly. Because Ladder has built life insurance to be dynamic, people can easily adjust their coverage as their needs change over time, based on the changing needs of their lives.
“Millennials, who comprise a large portion of SoFi’s member base, are especially in need of adequate life insurance coverage as they hit major financial and personal milestones, like homeownership and starting families,” said SoFi’s GM of Wealth, John Gardner. “Consumers are already visiting the SoFi site to make important decisions around their financial health, so it’s a natural, trusted place to also think about life insurance and we’re pleased to now provide them with Ladder’s innovative, simple and smart offering.”
LIMRA estimates that there are 19 million “stuck” life insurance shoppers in the U.S. – a stat SoFi says further demonstrates the need for a new approach to life insurance. By working together, the statement concludes, Ladder and SoFi have built a powerful integration that makes it easy for people to manage their life insurance needs in the broader context of their financial plan.
In a July 17 article posted on Fast Company, Merkel said, “Investing platforms, lending platforms, benefit platforms – there are a number of places where life insurance is part of the overall puzzle, and should be interacting with these other products. Where we think it gets interesting is the more they integrate.”