Nine Life Insurers Pin Hopes on Sales Potential of New Mobile App
July 20, 2017 by Warren S. Hersch
Nine life insurers have signed up to distribute term life insurance products through a phone app that offers a simplified underwriting process. The app developer’s claim to fame: the software’s ability to generate a free will and living trust — estate plan components unavailable from other insurtech companies offering streamlined underwriting.
The creation of Seattle-based Tomorrow Ideas, the app is targeted in large measure to tech-savvy millennials looking for a no-hassle online experience. To that end, the Tomorrow app leverages smart phones’ social media functions — text messaging, photo-sharing, videos and the like — to offer a simplified planning process in an engaging, interactive format.
“We’re focused on helping families get the financial and legal protections they need,” says Dave Hanley, president and co-founder of Tomorrow Ideas. “We’ve created an easy-to-use phone app that lets people do [insurance and estate planning] together.”
As a licensed broker — Tomorrow Ideas’ wholly owned subsidiary, Tomorrow Insurance Services, is set up to do business in all 50 states and the District of Columbia — Tomorrow has inked pacts with both major and mid-tier carriers to procure product. Among them: American General, Assurity Life, Banner Life, Mutual of Omaha, Principal Financial, Prudential Financial, Protective Life, Sagicor Financial and SBLI.
Hanley says the companies’ simplified term life products are available for policies carrying up to $500,000 in face amount. Consumers can obtain additional coverage using conventional medical underwriting. Twenty-year term policies offering $250,000 in death benefit can be had for as little as $13 to $14 per month, according to the company.
Josh Heckathorn, VP of financial services and the company’s co-founder, insists that the Tomorrow has a competitive edge advantage over competitor web portals — from Haven Life, Fabric, Ladder, Quilt, among others — offering a streamlined app process for buying term insurance.
“These portals offer an efficient method for serving people who have already decided to buy term life insurance,” he says. “We’re taking a more comprehensive approach by helping people support their families with a free trust and will — no strings attached — that can be funded with a term policy.
“We also educate prospects about their insurance coverage gap based on what we learn through the app about their family and finances,” he adds. “We’re not competing on the same battlefield as these other companies, which we actually see as potential partners.”
A key challenge in commercializing the app was interfacing with partnering carriers’ technology platforms to allow for app processing, policy servicing and related business needs. Some carriers that expressed interest in teaming with Tomorrow, says Heckathorn, were unable to do so because they lack the requisite IT infrastructure.
“The carriers we’ve partnered with have been amazing, but others just aren’t ready to work with us,” he says. “Their technology is so far behind. They don’t have API [application programming interfaces] that would allow our systems to talk to theirs.”
“Over the past year, we’ve interfaced with dozens of carriers about the product launch,” he adds, “I have yet to talk to one who is not super-excited about this new distribution channel [for simplified term insurance].”
Tech-focused venture capital firms are backing Tomorrow. Investors include Maveron, the venture fund co-founded by Starbucks CEO Howard Schultz; the Center for Financial Services Innovation (CFSI), an arm of by JP Morgan; plus Allianz Life, Plug and Play, and other insurtech investors. In total, the company has received $2.6 million in seed funding.
Hanley himself comes from the tech world. He previously served as a top exec at Shelfari, an Amazon-funded social cataloging website for books that merged last year with Goodreads. He also co-founded Banyan Branch, a social media agency whose digital marketing expertise spurred Deloitte to buy the firm in 2013.
Hanley’s latest idea — Tomorrow’s social app — was prompted in part by his difficult financial and emotional experiences after his parents’ passing. Topping the challenges was a cumbersome, costly and protracted estate planning process, including probate court challenges and attorneys’ fees.
Determined to simplify the process, Hanley conceived and hashed out the concept for the Tomorrow phone app with executive and design teams recruited for the effort, which got underway earnest in March 2016.
The resulting product integrates three core functions: two that generate a no-cost will and trust; and a third through which users determine the level of insurance needed to fund the trust, then apply for simplified term insurance.
Why offer a living (or revocable) trust? Unlike a last will and testament, says Hanley, a trust allows personal possessions and payments to fund children’s future expenses to remain private. A trust fund can also sidestep the need for probate court, protect assets of the trust grantor while alive, and insulate the estate from differences in state laws — a potential issue when moving from one state to another.
To ensure the confidentiality of client data, the software leverages “bank-level” security, encryption and authentication protocols. For now, the app is accessible only through Apple’s app store; an Android version will be debuted at a future date.
The app boasts other social features to facilitate the drafting of an estate plan. Among them: a text-messaging app via which to add friends and family as guardians and apprise them of their responsibilities using animated videos; invite executors and trustees using the same method; take and share pictures of personal possessions to be included in the trust; and list assets for the trust fund, including liabilities, bank accounts and insurance.
As to the last, says Hanley, the purchase of a term life policy can be underwritten “in minutes,” thanks to the simplified issue process requiring no medical exam or blood work. Applicants need only answer certain health and lifestyle questions.
About half of Tomorrow’s target demographic group, millennials (those born between 1982 and 2004), would have trouble covering bills without a primary wage-earner, according to LIMRA. Key reason: Most are uninsured or underinsured.
The deficit in financial planning extends beyond life insurance. A survey from Caring.comobserves that 60% of Americans don’t have a will. Among millennials, the percentage rises to a whopping 78%. Nearly all Americans (95%), a 2013 Federal Reserve survey on consumer finances notes, don’t have a trust.
Given these numbers, and the potential for Tomorrow’s app to help reduce them, the company launch is getting a positive reception, both from allied carriers and analysts who track the mobile technology and insurtech spaces.
“Our partnership with Tomorrow is an opportunity to learn from an insurtech company’s experience about how to become more agile and nimble in meeting customer needs,” says Scott Adams, an executive VP and chief administrative officer at Protective Life. “We want to work with a variety of partners to provide customers with different ways to buy our products. So we view the alliance as a big plus.”
Samantha Chow, a senior analyst at Aite Group, echoes this view, noting also that the Tomorrow app offers an innovative distribution channel for connecting with millennials and other “digital natives.” She adds that she significant potential in the app’s estate planning components.
“The will- and trust-generating features are huge,” she says. “There’s definitely a market for tools that can both educate younger consumers about insurance and financial planning and offer them an easy way to take action.”
