Ladder Life Insurance Review: How This Startup Is Making A Step In The Right Direction
According to Business Insider, there is a $16 trillion life insurance coverage gap in the U.S., meaning a large chunk of Americans are either uninsured or underinsured. The reason? There’s evidence to show that the many are turned off by the oftentimes long and complicated insurance application process. Even though people want and know they need life insurance, it can be too much of a hassle to buy.
Start-up insurance company Ladder touts itself as a game changer in that regard. Ladder Life Insurance’s promise is that you can apply online and get approved within minutes. This is an attractive promise, especially if you’ve been one of those people who’ve felt let down by an arduous insurance application process that just didn’t seem worth the wait anymore. But is Ladder Life really all that it’s cracked up to be?
In this Ladder Life Insurance review, we’ll discuss everything you need to know about this company, from its unique features to value for money.
What Should You Look For In An Insurance Provider?
In our reviews, we take a look at five key factors: the policies offered, application process, price range, customer service, and the company’s financial strength ratings.
When it comes to policies and coverage, you’ll want an insurer that offers a range of different types of insurance and a variety of options for term limits and coverage amounts. Add-ons and riders are a plus too. Essentially, you’re looking for flexibility.
As for the application procedure, you’ll want an insurance provider that can get things done expeditiously. You don’t want to spend weeks, even months, working and waiting on your application.
With the price range, it’s harder to give a concrete figure, since the price of your premiums will depend on factors like your gender, age, and health. You can, however, be mindful of companies that issue all sorts of processing fees, underwriting fees, and penalties.
Customer service is pretty self-explanatory. You’ll want an insurer that can resolve issues swiftly and professionally. We assess a company’s accessibility for complaints and concerns by looking at all the ways clients can get in touch if necessary.
Finally, it’s good to look at a company’s financial strength ratings, which reflects its ability to honor policy claims, resolve complaints, and the like. Look for ratings from companies like A.M. Best, Moody’s, Standard & Poor’s, and the Better Business Bureau.
Ladder Life insurance is a life insurance provider that touts fast, simple, and accessible term life insurance. Founded in 2015, Ladder is a relatively young life insurance company, and it's this freshness of ideas that attracts their customers.
As with most startups, it seems that Ladder Life seeks to disrupt the insurance market, hoping to change the old ways of doing insurance and attract a younger demographic. Their solution is to replace the slow and complicated application procedures with a fast, smart, and mostly online process, cutting out the medical exams requirement and even insurance agents. On their website, you'll be promised "Up to $8 million in coverage without leaving home".
And while Ladder has startup roots, it's partnered with trusted names in the life insurance industry, namely Fidelity Security Life Insurance Company and Allianz Life Insurance Company in New York.
So, with its digital-age approach and world-class partners, does Ladder fare well against the best life insurance companies today? Let's take a deeper look into the company's key features to find out.
Unlike other life insurance companies that offer a myriad of options for different types of consumers, Ladder only offers term life insurance. You can choose a term length of 10, 15, 20, 25 or 30 years. Your coverage can range from $100 000 to $8 million.
While this may sound limiting, Ladder says that this decision is based on their desire to keep things simple and affordable for their clients. Term life insurance is the cheapest type of life insurance, after all. In keeping with this ethos, Ladder chooses not to offer policy riders since they "will likely increase the price of your coverage".
In lieu of this, Ladder offers flexibility through another approach (in which the company is named after). The life insurance ladder method is a way of purchasing different term life insurance policies with different term limits. The idea is that, instead of purchasing one whole life insurance policy that will cost you an arm and a leg and last a lifetime, the laddering approach lets you decrease your death benefits as your financial needs change. With Ladder Life, you can easily access your life policies online and increase or decrease coverage and premiums through your phone or laptop.
"As life unfolds, some events drive an increase in the amount of coverage needed. And then, the financial reality is that the coverage required for needs tends to go down over time," says Ladder CEO Jamie Hale on Medium. "Because Ladder is digital, we make it easy to apply for more coverage and give you the ability to control if and when you decrease your coverage."
"We want people to get the coverage they need today, then have peace of mind knowing they’re covered and knowing they are not locked into anything over time," he adds, calling the result "financial zen".
Like their life insurance coverage, Ladder's application process is simple and straightforward. Everything is done online, and there is no need for an insurance agent to guide you through the process.
But more importantly, their life insurance application is fast. The typical life insurance underwriting process takes anywhere between six to eight weeks. Usually, you'll have to meet with an insurance agent, scour through different insurance companies and products to find the one that fits your needs, figure out how much life insurance you need, hand in paperwork, and take a medical exam. Then your policy will be subject to underwriting decisions based on your age, gender, and medical history. You may also have to show up for a face-to-face or a phone interview with the insurance provider.
With Ladder insurance, you can get approved within minutes. You can go on their website and answer questions about your gender, height and weight, age, tobacco use, and family medical history. You'll also be asked about some financial information, such as how you make money, your household income, and what your remaining mortgage balance is. Afterward, you'll be asked to select your term length and desired coverage amount. If you're uncertain, you'll be directed to a nifty online calculator where you'll be asked to input things like your mortgage balance, your debts, your savings, your beneficiaries' information (such as how many children you have and how old they are), their estimated college tuition, and how long you want coverage for.
One of the downsides of this setup, however, is that it leaves out a faction of people who still prefer face-to-face interactions and guidance from an expert.
Most insurers are strict about when and how their clients can cancel their policies, payment deadlines and the like. They often impose fines for cancellations and late penalties. However, at Ladder, clients don’t have to worry about paying these excess fees. You can cancel whenever you want, no questions asked, and you’re even assured a 30-day money back guarantee for cancelations.
Ladder also manages to keep things affordable through AI, which "instantaneously crunch data and process applications". Oftentimes, when you apply for a life insurance policy without a medical exam, you're given a much higher premium. Life insurance providers require a medical exam because they need to gauge what kinds of risks you pose to the company. Typically, clients will go through a blood pressure test and provide blood and urine samples as well. But with the help of some tech, Ladder is able to offer affordable life insurance even without requiring a medical exam.
Finally, Ladder can offer affordable insurance because they cut out the middleman. Without insurance agents and underwriters, consumers no longer need to pay for exorbitant overhead fees, cancellation fees, and the like.
Ladder insurance has an 87 percent excellent rating on TrustPilot, one of the trusted review platforms on the web, with more than one review noting the customer service team as one of the exceptional facets of the company. According to TrustPilot, the online insurer has replied to 100 percent of their negative reviews and consistently asks customers whether their experience was negative or positive.
Perhaps this is due in part to the way their customer service representatives are compensated. All their representatives are licensed agents, but they don't work on commission, so you get customer service without the catch.
However, their customer service is far from perfect. They do take emails round the clock, but their agents aren't available for a chat 24/7. You can only talk to an agent during business hours, or 8 am to 5 pm PST.
Financial Strength Ratings
A.M. Best: A-
Better Business Bureau: Ladder is not currently accredited by the BBB.
Standard & Poor’s: AA-
Fast and simple application: Applying for a life insurance policy is as easy as a few clicks. The process is done in a matter of minutes, and everything can be done in the comfort of your own home.
Adjustable premiums and coverage: One of Ladder's biggest selling points is the flexibility it gives to its customers. Customers are allowed to adjust the cost of their premiums, as well as the death benefit they want to leave to their beneficiaries. Just like the application, all this can be done online.
No medical exam: You don't need to take a medical exam to qualify for a Ladder Life insurance policy. And even without a medical exam, life insurance rates remain relatively low.
Everything is online: Millennials and Gen Z are used to doing everything online, from getting groceries to paying for bills. In this regard, Ladder is an attractive solution for younger folks who don't want to go through the hassle of the old school process.
Backed by industry experts: Allianz Life and Fidelity Security Life Insurance Company are two well-established names in the life insurance industry, and they happen to be partnered with Ladder.
Ladder offers only one type of policy: Rather than offer a variety of policies, Ladder chooses to only offer the term life insurance policy. While term life insurance suits those who are on a tight budget and who only need coverage for a set time, it's not for everyone. If you're looking for something more permanent (such as whole or universal insurance) and you have money to spare, perhaps Ladder is not for you.
No riders: if you're looking for a simple, no-frills life insurance policy, Ladder makes sense. But if you want to be able to customize your policy with additional riders, you won't find satisfaction with this insurer.
Age restrictions: You have to be between 20 to 60 years old to qualify for Ladder's term life insurance policies.
No agents or face-to-face meetings: Whether you've got a specific question that no amount of FAQs can answer or simply prefer to talk to an actual human being about your life insurance policy, Ladder won't satisfy you in that aspect. Most correspondence is done online and during a limited window. If you need a more personal touch, you're better off elsewhere.
The Bottom Line
Will Ladder be able to fulfill all your life insurance needs? At face value, Ladder seems promising. It's one of the newer insurers on the market, offering a fresh perspective and an AI-backed system that helps them cater to people who are looking for an easy, no-frills policy. But by offering only one type of life policy, choosing not to include riders, and restricting most procedures to the online realm, this company can quickly turn off people who are more used to the traditional way of buying insurance.
Interested in more life insurance review articles? Looking for advice on finding the best life insurance companies specific to your needs? Or perhaps you need some guidance on a personal finance dilemma? At Wesley LLC we have the tools and expertise to guide you through any financial rut. Contact us to learn more.