Money at 30: Is Bestow Term Life Insurance Right For You?
Americans seem to have a love-hate relationship with insurance. While many love the benefits that come with being covered by health insurance, car insurance, renters insurance, etc., seeking out a policy isn’t always top of mind. Furthermore, when it comes to certain types of insurance such as life insurance, many would rather not think about the unpleasantries associated with them. Alas, term life insurance can be an important product for families and individuals, which is why Bestow has sought to make the process of purchasing a life insurance policy easier.
I first heard about Bestow while attending FinCon earlier this year. Admittedly, at the time, I had never really given much thought to purchasing life insurance — although the company I was formally employed by did provide a small policy for me at one point. Because of this I was intrigued by the premise of Bestow and wanted to take a closer look at what their platform provides.
What is Bestow?
The basics on Bestow
Bestow is a company aiming to make the process of purchasing term life insurance simpler. On their site, the company notes that their service not only provided “easy and affordable” coverage but also does away with some of the hurdles traditional life insurance providers erect such as lengthy applications, medical examinations, and more. They also advertise speedy decisions that will let your secure coverage as soon as possible.
What else does Bestow say makes them different? In a video, the Bestow founders share what inspired them to create their company and what headaches they were looking to relieve when building their platform:
Bestow is headquartered in Dallas and recently raised $15 million in a Series A round of funding led by Valar Ventures and New Enterprises Associates.
What Bestow offers
Currently Bestow offers term life policies of up to $1 million. These plans are backed via a partnership with North American Company. Here’s a quick look at different plans and pricing:
|Plan Type||Minimum Coverage||Maximum Coverage||Starting Premium Price||Best for|
|10 or 20 Year Coverage||$50,000||$1 million||$8.13 per month||Those who want to lock-in rates on premiums|
|2 Year Coverage||$50,000||$500,000||$2.50 per month||Those who want flexibility and not an extended commitment|
As you can see above, the shorter two-year option offers a lower monthly premium but also has a lower maximum coverage cap. Meanwhile the 10 and 20-year coverage options allow buyers to lock-in long-term rates and obtain policies of up to $1 million. Bestow notes that all plans are A+ rated, come with a 30-day money back guarantee, and carry no cancellation fees.
It’s important to note that Bestow only provides policies backed by North American Company. This means that there’s no comparison tool to shop different options from various providers. However you can view different coverage options by adjusting the payout and term lengths using Bestow’s quote tool (more on that later).
Are there restrictions on Bestow policies?
Something to note about Bestow is that, at this time, it’s not yet available in every state. While coverage is now on sale in 48 states, those in Georgia, New York, or Puerto Rico will have to wait a bit longer. That said, the company is licensed in Georgia so that could soon be their 49th state. Plus, considering they were only in 37 states as of August 2018, it’s clear that Bestow has been expanding quickly.
In terms of other restrictions, only those age 45 or younger may purchase 20-year term life policies from Bestow. Similarly those over 55 and a half may not purchase any policies from the company. On the other end of things, those under 21 are also ineligible for coverage from Bestow.
Outside of these age restrictions, Bestow’s FAQ section offers a bit of insight into other reasons you may be denied coverage on the platform. These reasons include a person’s “build” (height, weight, body mass index), amount of existing coverage, or other factors that could prevent you from being matched to a policy. With all that said, Bestow says that they’re “constantly working on expanding insurability.” They continue, “If you don’t qualify for a policy offered by Bestow right now, check back with us again in the future.”
Signing Up for Bestow
Full disclosure up front: I have not yet purchased a term life insurance policy through Bestow. However, in an effort to get a first-hand look at the company’s application process, I did go through each step right up until the actual purchase. Here’s what I found.
The process really is short and sweet
As promised, Bestow’s application process did only take a matter of minutes. For my experiment I selected the two-year plan to apply for, so there was slightly less paperwork to go through. Some of the questions that were asked during the process included:
- Height and weight
- State of residence
- Place of birth
- Social Security Number
- Medical history
- Tobacco use
I will also say that, in addition to Bestow’s forms being quick and responsive, the design of each screen was sleek. Moreover the art and icons featured on each page and in between also added to the experience, making what could be an intimidating process less so.
Even though I was able to get through the application process (up until the purchase screen) in about five minutes, it’s nice that Bestow does give you ability to save your progress and pick up where you left off if need be. This is thanks to a password that you’ll set up near the beginning. Considering that purchasing a life insurance policy may take some contemplation, it’s definitely helpful that you can take the time to think things through without having to start the process all over.
You can get a quote without giving up your contact info
Another thing I like about Bestow’s site is that you can get an idea of how much potential coverage would cost without having to enter so much as your name or e-mail address. Using Bestow’s quote form, you can enter basic data such as your age, height, weight, and state, and see a price range for coverage. Using a handy slider at the bottom of the tool, you can see how your premium and policy options change as your coverage increases. Granted, there’s no guarantee that these figures will hold up once you complete a full application, however mine was only 8¢ off. To me, the inclusion of this tool just shows that Bestow is confident enough in their product that they can offer this insight without needing to capture lead info. Of course, it also means that you won’t get annoying calls and e-mails about buying when all you wanted was a quote — that’s a big plus in my book.
There are exclusions to your policy
Sure, life insurance may be serious business but there were a couple of things that managed to amuse me as I filled out my Bestow policy application. The first came in the tobacco use section, where I learned that you can still declare that you haven’t used tobacco or nicotine products in the past 12 months if you’ve smoked fewer than 24 cigars in that time. I guess you can smoke two stogies a month but vaping is another story (for the record, I don’t do either).
The other section that intrigued me was the list of instances where your death would not be applicable for payout. In my case, deaths resulting from scuba diving, auto or boat racing, or mountain or rock climbing would not be covered. Ditto deaths from “operating or learning to operate any aircraft as student, pilot, or crew.” I guess if you plan to scuba, climb, race, or fly, these exceptions are certainly something you’ll want to consider.
Minimum coverage is affordable but big payouts mean big premiums
When all was said and done, I would have been able to purchase a two-year, $50,000 term life insurance plan for just $4.08 a month. In my view, that’s a pretty good deal — and one I’m honestly still considering. Of course, if you wanted to obtain one of those $1 million policies, you’d end up paying far more. In fact, when obtaining my initial quote, it looked as those a $1 million 20-year policy would cost me upwards of $50 a month. That’s $600 a year and $12,000 over the life of the policy (no pun intended).
For what it’s worth, a basic quote (one obtained without going through the complete application) put the price a bit lower for my wife, coming in at $3 a month for minimum coverage on a two-year policy, $30 for a $1 million 10-year policy, and $39 for a $1 million 20-year policy. While these still might sound steep to me, it’s also fairly reasonable when you consider other types of insurance policies — such as auto or health — that can cost just as much if not more for comparable payouts. Plus I suspect that, for most people, a $1 million policy may not be necessary. So while it’s nice to have the option, I’d likely end up going with a lower coverage level at this time.
Final Thoughts on Bestow
All in all, if I were to purchase life insurance, Bestow seems like a platform designed for people like me — e.g. those looking for a simple to understand, easy to navigate, “sign up in your pajamas” sort of solution. What’s more, I truly appreciate that Bestow allows you to get a basic quote without having to enter any contact information. Having walked through the majority of their sign-up process myself, I can also attest that it’s quick and seemingly painless.
While I clearly can’t speak to how Bestow operates in terms of payouts, their partner North American Company does seem to be well respected and rated. Furthermore the $4 a month I was quoted for a two-year, $50,000 policy seems reasonable and affordable to me, leading me to give more thought to the very premise of term life insurance. With that, it seems that Bestow is well on its way to not only changing the way people purchase life insurance but how they think about it as well.
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Also published on Medium.