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Ladder launches insurtech life insurance product in California

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A new life insurance company launched its web-based service in California earlier this month with a business model rooted solely in the idea that today’s consumers want to shop digitally and on-demand.

Ladder is selling fully underwritten term life insurance policies worth up to $8 million. Its goal: To provide “instant, simple and smart” life insurance for people who are not using traditional agents or advisors.

Related: 3 insurtech trends to expect in 2017

Ladder CEO Jamie Hale

LifeHealthPro spoke with Ladder CEO Jamie Hale, pictured at right, via telephone to find out more. The following are excerpts from that conversation.

LifeHealthPro: What was the need for a company and service like this?

Jamie Hale: For some, the traditional process works. Others are looking for a more digitized or digitalized experience. Most of our consumers start [life insurance research] online. Yet there’s a $16 trillion coverage gap in the United States. Customers do want to just buy insurance. We’re providing them with that opportunity in a process that is relentlessly focused on the user experience.

So much talk in today’s business world is about automation and innovation. Where does Ladder fit into that discussion?

Hale: Ladder is meant to be instant and smart. California consumers can now go to, calculate their needs, gets a quote and apply for instant coverage, all online in minutes. Ladder is making it possible to buy insurance as fast as you can type without the complexities of a traditional process.

Related: The “Uber of Insurance” is here

Hale: Who is the ideal Ladder customer, and how do you plan to reach them?

Our customers are looking for something that is simple and smart. They hop online at night, once they get their kid to sleep. They’re already online, and they’re self-directed. We’re trying to meet them where they already are. We’re not trying to change their minds.

LHP: Walk us through Ladder’s online user experience?

Hale: One of the benefits that Ladder has is we’re building our own software versus working with legacy software.

Our goal for the user experience was to make it as delightful as possible every step of the way, and fundamentally transparent. We believe that your insurance product needs to align with your distribution. We simplify the core insurance product to fit into an online digital process. We want to offer a very high quality product. One of the things we always said is, we need to ask the consumer how we can make this better, easier and more intuitive. We found out that the reason that matters is that so many people are frustrated because they couldn’t get coverage that they could use.

See also: 3 reasons Lemonade’s CEO wants to disrupt the insurance industry

The leadership at set up shop in California because the state presented a significant regulatory challenge. (Photo: iStock)The leadership behind decided to launch the company in California because the state presented a significant regulatory challenge. (Photo: iStock)

LHP: Was it a strategic decision to launch in California?

Hale: Yes, it was a highly strategic choice. It’s a high hurdle from a regulatory perspective. We wanted to start in a place that’s consumer friendly. It’s a big state and a place where us passing the high standards of California regulation allows us to move nationwide.

LHP: Is that next?

Hale: We don’t have a set timeframe. We’re really focused on relentlessly meeting the needs of our customer. For us, it’s a question of, when does it make sense to go, and what states to go to.

LHP: What would you say to traditional insurance agents and advisors?

Hale: Keep doing the good work that you’re doing. For them, business is good. They have a set of customers that enjoy buying from them, and that’s great. We’re really addressing the people that they’re not addressing, and who are not target customers (for traditional insurance businesses). A lot of producers are looking for people who are trying to retire, and are also selling other types of annuity products. We’re focused on pure, simple, term life insurance.

LHP: Why does Ladder only offer a term life insurance product?

Whole life insurance is really only right for a very small percentage of the population, in certain circumstances. For them, you can make the argument that there are some deferred tax benefits that overwhelm the other drags on that product. Those drags being very low investment return, high fees, high complexity, high cost to liquidate.

For about 98 percent of Americans, whole life insurance products do not make economic sense, and it’s probably oversold. What we offer is a pure life insurance product. Whole life is an investment vehicle. In almost every circumstance, there are better investment products.

See also:

Sail through insurance industry flux by focusing on consumers

Predicting the future of insurance

S&P panelists: Insurance industry is ‘ripe for disruption’

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