We are seeing more and more digital life insurance companies popping up in the age of the internet. “Insurtech” startups like Ladder Life want to disrupt the life insurance industry by offering term life insurance online with “no brokers, no exam, and no upselling.”
This Ladder Life Insurance Review will go in-depth on Ladder Life’s rates, Ladder’s term life features, and if Ladder Life truly offers no-exam life insurance. So does Ladder Life live up to the hype?
Our initial thoughts are that Ladder Life falls short, which is disappointing because we had high hopes when he first heard of the concept. That said, Ladder Life may make sense for a specific type of person looking for life insurance.
Ladder Life Insurance History
Ladder Life is a relatively new player in the life insurance industry. Ladder Life was established in 2017 as a digital solution to applying for life insurance. The company is a 100% online experience.
Ladder Life started in California, which is not surprising considering that they are a tech company at their core. From there Ladder Life slowly expanded offerings state by state.
Ladder’s instant approval process was initially very popular. A hundred days after Ladder’s launch they issued well over $100 million of life insurance coverage. That is over $1M of life insurance death benefit per day!
Ladder touts their technological advantages such as instant decision no-exam underwriting and the ability to “ladder up or ladder down” your death benefits over time as your needs change. Ladder Life is also revolutionizing influencer marketing.
Ladder Life has raised $54 million in funding from venture capital companies. As of the date of this article, Ladder Life’s investors consist of:
Additionally, Ladder Life’s marketing efforts are some of the best in the industry. Ladder Life is using its technology to offer influencers like small business owners and financial advisors a streamlined solution to providing their employees and clients affordable term life insurance.
Ladder Life also recently partnered with SoFi, a leading e-financial company most known for their student loan offerings. This was a brilliant move on Ladder Life’s part as SoFi’s need the services that Ladder provides and likely prefer a digital experience.
Ladder Life is a pioneer in voice by creating a way to get a quote through Google Home and Alexa skills. While this technology is still in its infancy, it is exciting to see the direction that the industry is going.
How Does Ladder Life Insurance Work?
Ladder Life is actually underwritten by Fidelity Security Life Insurance Company. Fidelity Security Life Insurance Company is rated A- (Excellent) by A.M. Best Company. A.M. Best is a third party rating agency that accesses the financial strength of insurance companies.
Ladder life insurance sells one term life insurance product in a direct to consumer model. You can get a quote and apply 100% online without talking to an agent! Ladder Life markets this as an advantage, but we feel this a huge detriment to the consumer. More on that later.
Ladder Life insurance believes that they can close the life insurance coverage gap that is growing in the United States by making life insurance affordable and accessible. Ladder Life currently only offers term life insurance.
Additionally, Ladder Life provides a death benefit calculator to help you calculate your death benefit if you are unsure of the amount you need. However, merely providing someone a tool with no instruction can result in the client miscalculating their death benefit need.
What’s Unique About Ladder Life insurance?
Ladder Life has three features that make them stand out in the current life insurance marketplace:
Instant Decision Online Application
The first thing that separates Ladder Life from 99% of the other life insurance companies out there today is their direct-to-consumer model. You can apply online for life insurance, get approved, and covered within minutes without talking to a single person!
After you settle on a death benefit amount, you can begin the life insurance application. Ladder Life will ask you questions about your identity, your health, and your lifestyle in order to determine your eligibility for life insurance.
The entire application from start to finish should take you about 20 minutes. From there, you can submit your application for review. Ladder Life will then issue you one of three decisions. Either they will approve you, request a medical exam, or decline you.
However, in practice, this is not as easy as it sounds. In order to get approved instantly, you need to be in excellent health. If you have a pre-existing medical condition, you may be required to take a medical exam, which will delay the decision process.
If you are OK with taking a medical exam but would like to avoid one if possible, Ladder Life could be a good option for you. However, if you are adamant about not taking an exam, there are better no-exam life insurance companies in the market.
The Ability to Ladder Your Death Benefit Up or Down
Another feature that Ladder Life touts is their ability to “ladder” your policy as your insurance needs change. You can easily apply for additional life insurance coverage or decrease your coverage right on your online account once you are approved.
For example, let’s say you have a policy for $300,000 death benefits. You decide that you want to buy a house and purchase additional life insurance coverage to protect your new mortgage balance of $150,000.
You can log onto your Ladder online account and purchase additional coverage to protect your mortgage. Now let’s say you pay off the mortgage balance an no longer need the coverage. You can log on again and decrease your coverage if it’s no longer needed.
Keep in mind that if you want to Ladder up, you still need to provide evidence that you are insurable. While it is convenient to be able to repurchase additional coverage from your online account, it is not guaranteed. Lowering your death benefit does not require underwriting though.
A No-agent Business Model
Similar to competitor Ethos Life, Ladder does not use commissioned agents in the customer acquisition process but does have licensed insurance professionals who are salaried employees, not commissioned sales agents, on staff if you have any questions.
Ladder markets this as reducing conflict of interest from the sales process, but in reality, it hurts the consumer by reducing choice since independent agents often broker multiple life insurance companies in order to find their clients the best deals.
Ladder Life’s no-agent business model may work for a person in excellent health who is ready to purchase coverage. However, different life insurance companies have different opinions on underwriting and rates.
Since Ladder Life only offers one term life insurance option, you would likely get a better deal working with an independent broker who can represent more than one company. A broker will be able to match you with the best rate for your unique situation.
Ladder Life Term Life Insurance Solutions
Ladder Life offers one of the simplest term life insurance contract that we have come across in a long time. It is a pure death benefit life insurance contract with no frills.
Ladder Life Term Life features:
While we understand what Ladder Life is trying to accomplish by offering a stripped down term life insurance policy, it might not be for everyone. There are a lot of popular riders that clients like to add to their life insurance policies.
Common Life Insurance Riders that Ladder Doesn’t Offer:
All of these riders make sense for clients in certain situations. For example, you can cover your children with $20,000 of death benefit coverage each with most insurance companies for around $5 per month extra.
Most people do not know about these riders until sitting down with their agent, which is one of the drawbacks of the direct-to-consumer model. However, the most surprising rider that was left out is the accelerated death benefit rider.
Pretty much every life insurance company that we work with has built-in accelerated death benefit rider for terminal illness in their term life insurance. This allows you to take an advance on your death benefit if you are diagnosed with a terminal disease.
In addition, companies like Phoenix Life are going beyond terminal illness to offer you more robust coverage for critical and chronic illness in addition to your death benefit with no medical exam.
Another feature of Ladder Life is the ability to “ladder up or down” your coverage. This is basically marketing jargon for you can buy more or lower your coverage, so you are never “over or underinsured.”
Increasing or decreasing your death benefits as your needs change is nothing new. Almost every life insurance company will allow you to decrease your death benefits in some capacity during your contract and reduce your premiums accordingly.
If you want to increase your coverage, you would simply purchase a new policy to either replace or supplement the coverage you already have, which is basically what “laddering up” is. You need to still qualify medically for your additional coverage, and it will be priced at your new age.
Although, having the ability to do it easily in Ladder Life’s web portal is a great innovation that our agency applauds. We get calls all the time from clients with existing term policies that either are expiring or need to be increased.
Many of these clients have lost contact with their original agent who wrote their first life insurance policy and had to start the process all over again. Being able to simply log in and reapply for coverage down the road is an excellent feature; although, not a deal breaker for us.
The greatest flaw in a life insurance laddering strategy is that life insurance is something that you need to qualify for. If something happens to you medically during your term period, your new life insurance rates could skyrocket, or even worse, you may not qualify at all!
The best life insurance companies offer two solutions to this problem. The first is an annual renewable term option. Most life insurance companies let you pay year-by-year into your 90s. Ladder Life has this option, but for only five years, which is well below the industry average.
The second solution is performing a term conversion. A term conversion is when you exchange your term policy with a permanent policy like whole life without having to requalify. Ladder Life does not allow term conversions.
While term life insurance is appropriate in many cases, it is not the best solution in all cases. Not having a term conversion option greatly reduces the flexibility of your coverage later on in life.
Another feature of Ladder Life that we find curious is its age restrictions. You have to be between the ages of 20 to 60 years old to purchase a Ladder Life term life insurance policy. In addition, you cannot have your level term policy extend past age 70.
If you are just looking for life insurance coverage during your working years, Ladder Life is a great tool. However, we see quite often that people want to carry some coverage into retirement to cover remaining mortgage debts, final expenses, or leave money to their grandchildren.
Since you cannot convert your term policy with Ladder Life or extend your coverage beyond age 70, we would suggest looking at other life insurance options as you get older. The cost of adding on these benefits is often minimal, and you will be glad you have them if you need them.
Finally, Ladder Life offers a range of death benefits between $100,000 and $8,000,000, which impressed us when we read it. Competitors to Ladder Life, such as Haven Life, will only offer death benefit maximums up to $3,000,000.
How Much Does Ladder Life insurance Cost?
Ladder life rates are competitive with the top life insurance companies in the industry, but they are not the rock-bottom lowest rates on the market today. We listed some sample Ladder Life quotes below to give you an idea of their affordability.
Sample Ladder Life Insurance Quote: Term (Age 30)
|Death Benefit||Male 10-year||Male 20-year||Female 10-year||Female 20-year|
Please note that these Ladder Life Insurance quotes are for the preferred best non-tobacco health class.
If you are in excellent health, you can get more coverage for less cost by working with a broker and requesting a low-cost term life insurance company like AIG Life. Don’t just take our word for it. Request a quote through our website and see for yourself.
You will get a lower rate, terminal illness rider, and a conversion privilege as well as a lower monthly premium. The free services that your broker provides during the application process are just a cherry on top.
Final Thoughts: Is Ladder Life Insurance Legit?
Ladder Life is a legit insurance company. We applaud their efforts to bring the life insurance industry into the modern digital era but feel that they just did not go far enough. While Ladder Life is a good tech company, they are an average life insurance company in our opinion.
The reason that we feel that they are an average life insurance company is because outside of a streamlined online application process they do not bring much else to the table. While customer experience is important, it is not more important than the life insurance contract itself.
When we review a life insurance company, we need to justify why this company is worthy of a spot in our brokerage. Are they on the cutting edge of no-exam underwriting? Do they offer features, like living benefits, that other companies don’t have? What’s their niche?
Ladder Life stripped out a lot of the features, like terminal illness riders, that are standard in most term life insurance contracts. If you are going to reduce the benefits that you are providing your customers, then you should be the rock-bottom lowest price in our opinion.
When we stack Ladder Life head-to-head against the best life insurance companies, they are often beaten on price, underwriting, and features. While they do have some interesting features like the “ladder up or down” concept, we don’t feel the juice is worth the squeeze.
Thank you for reading our Ladder Life Insurance Review. Please contact us if you have any further questions.
FILED UNDER – LIFE INSURANCE COMPANY REVIEWS
Joe is a lifelong learner with a passion for sharing what he has learned with others. Joe has publicly spoken on life insurance in the past to both colleagues at industry conferences and to consumers in educational settings and as a contributor to industry blogs. Additionally, Joe is studying for certifications such as the CFP, CLU, and RICP to further his professional knowledge.