A new Toronto-based startup, PolicyMe Corp., plans to fully digitize the life insurance process from advice to the purchase of a policy.
Launched on Wednesday, the digital life insurance advisor is designed to allow consumers to quickly submit an online application for a term life policy while also learning a bit more about life insurance and how much coverage they really need. Indeed, the advice portion of the platform is what the company’s founders feel sets the startup apart from other online offerings.
“We thought [education and advice] was really missing from some of digital life insurance innovations that have been coming out lately,” says Laura McKay, co-founder and president of PolicyMe.
As part of the process, individuals visit the PolicyMe website and begin a “digital insurance checkup,” which involves providing personal information such as family situation, major health issues of the past 12 months and whether they are non-smokers or smokers, as well as some financial information including their income and savings.
The interface also includes links to the answers of questions consumers may have, such as: What if I don’t have children now but plan to have them in future? Or, what if I don’t own a house right now but I’m looking to buy?
The application process is guided by the company’s proprietary algorithms and takes about five minutes to complete.
The algorithm makes one or two recommendations as to how much life insurance the customer may require and what the policy’s duration should be — in some cases the recommendation may be to not buy any insurance as the individual may already have sufficient coverage.
If the individual decides to follow one of the recommendations, the platform will offer quotes from a variety of insurance providers. PolicyMe is currently contracted with seven insurers. The process concludes with a phone call during which a PolicyMe employee will confirm the application and ensure the customer understands the purchase.
For the moment, PolicyMe is focused exclusively on life insurance, specifically term life products, which its founders believe is a more straightforward option for Canadians.
“We fundamentally believe that insurance has become too complicated over the years by insurance companies wrapping these protection products in investment vehicles like universal life insurance,” says McKay. “We want to strip it back to the basics.”
The company does have plans to move into other areas of insurance in future, however. More specifically, PolicyMe’s platform will likely include disability and critical illness insurance in the next six to 12 months.
“We’ve designed the algorithms, we just haven’t implemented it on our site,” says Andrew Ostro, co-founder and CEO of PolicyMe. “But that will come soon.”
In terms of costs, PolicyMe receives commissions from insurers on the sale of a policy. The advice portion of the platform is free.
PolicyMe is currently licensed in Ontario although its founders have plans to take the company national in the near future.