Insurance fintech Bestow signs first enterprise deal with Equitable Financial

While some insurance providers are turning to fintech to expand agents’ ability to offer financial planning, investment management and even cryptocurrency, at least one is looking to digitize how it sells actual life insurance.

Equitable, a financial services company that was previously owned by AXA Group, has partnered with fintech startup Bestow to launch an entirely digital term life insurance product. Called Term-in-10, the product will only be available through Equitable’s network of financial professionals, including financial advisors on its brokerage, Equitable advisors.

After working with an advisor to determine a client’s specific life insurance needs, Bestow’s technology lets clients apply for a policy entirely online. A medical exam is never required, and if the application is approved, coverage begins immediately, reducing a traditionally weeks-long process down to about 10 minutes while providing a more accurate risk assessment, according to Bestow co-founder and CEO Melbourne O’Banion.

“There are substantial advantages to using a financial professional and life insurance agent who understands the specific requirements each client needs to protect their family and provide them with a comprehensive financial strategy,” Dave Karr, chairman of the firm’s brokerage, Equitable Advisors, said in a statement.

This is Bestow’s first deal with a large financial services firm, and it will be the sole infrastructure provider for the entire sale and administration process — from application to underwriting to policy servicing. Launched in 2017, the fintech has raised $150 million in funding and successfully acquired Centurion Life Insurance. The company did not disclose how many clients it serves or its assets under management.

The company is trying to make life insurance more accessible to underserved families by selling directly to consumers, partnering with insurance firms and through financial advisors, O’Banion said. There are 102 million Americans who believe they need to buy life insurance or increase their coverage, according to LIMRA, but there has been a lack of digital innovation to help carriers reach the modern consumer, O’Banion said.

“Previously, insurers that attempted to launch digital life insurance products had to cobble together several providers’ services, whether that be through vendors or acquisitions. This approach left carriers managing multiple vendors and products that have inherent challenges speaking to each other,” he said in an email to Financial Planning. “What makes Bestow’s enterprise solution unique is that it’s a single-source solution for the end-to-end sale and administration of term life insurance.”

Investor demand for life insurance is growing, O’Banion added. Nearly a third of consumers say they are more likely to buy life insurance because of the pandemic, according to the 2021 life insurance barometer study published by LIMRA and Life Happens.

But a separate survey from the National Association of Personal Financial Advisors (NAPFA) found only 15% of adults using life insurance to save for retirement. So is the technology solving a pain point for clients and advisors, or just providing a better tool to product salespeople?

When it comes to technology, advisors are always looking for better tools to analyze client needs, said Andy Mardock, founder and president of ViviFi Planning, an RIA located in Bend, Oregon. Though Mardock doesn’t do any product sales, something that can identify a good fit for insurance and make it easier to get a policy place would be helpful.

“This is an area where technology can push financial planning forward lightyears, and I expect it to happen over the next three to five years,” Mardock said. “It solves one of the largest problems that any financial planner, as well as our clients, face — implementation.”

If he identifies a need for life insurance during the financial planning process, Mardock then has to hand a client off to a third-party insurance agent, which slows down the entire process. If technology like Bestow’s handles some of the “blocking and tackling” of assessing and executing on the products needed, it’s a welcome addition, Mardock said.

“The plan can be top-notch and just excellent … but that means nothing beyond the space it occupies if it’s not implemented.”