What do Jay-Z (pictured), Robert Downey Jr., Kevin Durant and Will Smith have in common?
They are all investors in a San Francisco-based life insurance startup named Ethos, which officially launched in mid-June after an $11.5 million fundraising round led by venture capital giant Sequoia Capital.
Ethos, which wants to make life insurance “accessible, affordable and simple,” is already licensed in 49 states (and plans to add remaining state New York). The company says it has already processed thousands of applications for life insurance coverage, with policies underwritten by Assurity Life Insurance Co. of Lincoln, Neb.
While using technology “to simplify and modernize life insurance products” to “better align with the wants and needs of American families” is an admirable goal, independent agents may take issue with statements from Ethos’ June 14 launch announcement:
“Once seen as a vehicle for financial empowerment and protection for families, life insurance is now seen as a burden due to a confusing, lengthy and frustrating process managed by agents whose incentive structures are misaligned with the needs of everyday consumers. This reality has left tens of millions of families unprotected.
“The process for getting a life insurance policy on Ethos is fast, easy and inexpensive, turning a process that was once like going to the DMV to more like shopping online. Using Ethos, most people can apply and qualify for a policy after a 10-minute application versus the 10 weeks it takes through a more traditional process. There is always a non-commissioned licensed agent available to give unbiased guidance. More than 99% of Ethos customers have required no medical exam or blood test to get a policy.”
And this from a June 15 article in the Silicon Valley Business Journal:
Ethos Life may not be the sexiest of investments because of its sector, but cofounders Peter Colis and Lingke Wang promise to transform life insurance by taking middleman agents out of the process, eliminating most medical tests to speed policy approvals, making policies easy to understand and lowering costs.
Colis and Wang together previously co-founded Ovid Life, a life insurance marketplace.
“Life insurance is about families, financial empowerment and protection. Intrinsically, it is a good thing. But somewhere along the way, protecting profits, not people, became the industry’s passion,” said Colis, CEO at Ethos. “We have the opportunity to rebuild a broken industry and put honesty at its core, ultimately expanding life insurance accessibility to the millions of U.S. families who have college debt, mortgages, spouses and children to care for, and who want to be financially empowered to live their lives without worry. We are proud to partner with Sequoia and our other investors on this mission.”
As previously mentioned, other investors include NBA star Kevin Durant’s angel and venture investing firm The Durant Co., Arrive, a subsidiary of Jay-Z’s Roc Nation, Will Smith’s Smith Family Circle, Robert Downey Jr.’s Downey Ventures, a credit facility from Silicon Valley Bank, and Stanford University, which is where Colis and Wang met as MBA students.
The investment is being used “to accelerate the company’s rapid growth and enhance product development,” according to the release.
“Ten million new individual life policies are sold annually in the U.S., and Peter and Lingke have identified the opportunity to modernize their delivery and packaging for the next generation,” said Roelof Botha, Partner at Sequoia who has also been named to the Board of Directors at Ethos. “Ethos is revolutionizing the insurance purchasing experience and we’re thrilled to partner with them as they create a simple way for consumers to provide for the people they love.”
According to the Silicon Valley Business Journal article, Ethos has processed “thousands” of applications but the company isn’t disclosing how many customers it has under contract. A high percentage of those customers, Colis said in the article, are African-American, and the company has targeted “mommy blogs” to capture customers looking to insure their young families.
To learn more, visit www.getethos.com.
no medicals? they are probably gona shoot for a great deal of term and play the odds
Taking the professional out of the equation, good idea. I’m sure people with no training know what gaps they have and what the best product for their needs are. Can’t wait till we can start prescribing ourselves medication based on what we find on WebMD.
breaking news. Many companies are using (quick turnaround-non medical underwriting) and now writing both term and permanent products. Can get preferred plus and many companies will write up to a million. Decision 24-48 hours after phone interview. Always good to shop and use the best fit for age, amount conditions, etc. Are the costs lower since the carrier is not paying commissions to greedy agents? Like where it says, “There is always a non-commissioned licensed agent available to give unbiased guidance”. That is funny. Nobody works for free.
Do you think Jay Z specifically spoke to Ethos or heard their pitch? No. He parked some of his money with a massive VC firm, Sequoia Capital, to invest it for him into many many companies like Ethos.
Insurance is supposed to be promulgated. So, their products are gonna be the same price as street price (if they are selling crap, that same crap should be available to all agents, imo).
Correct me if i'm wrong PLEASE???
I would think so. The actuaries will keep it so. Math is undefeated.
If he's smart, he would have spoken directly to them. He could follow in Magic Johnson's path:
https://www.usatoday.com/story/money/2015/06/23/magic-johnson-equitrust-life-insurance/29155157/