Buying life insurance can be an overwhelming process for some people. With so many options and companies to choose from, it can be difficult to narrow down your selection. To ensure that you make the right decision for your needs, it helps to dive deeper into the various companies offering policies.
In this article, we will focus on Ethos Life Insurance. Ethos is relatively new, having started in 2016. However, it already has a strong reputation, with high marks from the BBB and other sites like TrustPilot. Here’s what you need to know about the company and what it offers.
Ethos Company Overview
The first thing you should know about Ethos is that it doesn’t underwrite its policies directly. Instead, the company works as an aggregator, sending your information to other insurers. So, when you purchase life insurance through Ethos, your plan may be covered by one of several different companies.
Typically, Ethos works with Banner Life Insurance, which has an AA- rating from FitchRatings. This is a good score, meaning that Banner Life has sufficient assets to satisfy its debts and liabilities. Overall, a high rating indicates trust and confidence, so you can feel good about purchasing a plan through Ethos.
So, if Ethos isn’t the one underwriting your policy and it doesn’t aggregate plans from many different insurers, why work with them at all? Here are some of the reasons why Ethos might be a good choice.
Online Application Form
Ethos lives entirely online. While you can call to speak with an agent, the company doesn’t have offices or anywhere you can meet in person.
For many individuals, such a smooth and streamlined experience is ideal when shopping for life insurance. The application software is easy to use, and the company boasts that anyone can complete the process within 10 minutes or less.
For decades, insurance underwriters would calculate your insurance rates based on tables and charts. These charts would get updated periodically to reflect changes within the industry (i.e., life expectancy, new regulations etc.).
Ethos uses predictive modeling to determine your level of risk. Because underwriters want a clear understanding of risk factors, and because everyone is unique, this system can deliver results much faster. In some cases, you could wait weeks or months to find out if your application is approved.
Ethos can often deliver a result in minutes, thanks to this technology. Even if your rates are not determined immediately, it usually takes a couple of days for an answer.
No Medical Exam
Depending on your age and overall health, this feature may not be too unique. Many insurance companies that offer term life insurance don’t require a medical exam, so Ethos is not reinventing the wheel. That being said, because the company is 100 percent online, most individuals don’t have to take an exam, even when buying more extended term policies.
Ethos does offer whole life insurance, but it would technically be considered burial insurance because it is only available for individuals between 65 and 85. Also, the benefits are capped at $25,000. However, even those who apply for whole life insurance don’t have to submit to a medical exam. If you have significant health issues, Ethos will simply adjust your rates accordingly.
Typically, when comparing term insurance rates, you only have to provide basic details about yourself, such as age, sex, whether you smoke, and a few health-related questions. Ethos will ask about your financial situation and occupation to get a more complete view of your circumstances. This strategy allows the company to customize each quote accordingly, which is beneficial when comparing a ton of options.
Beyond the initial application, Ethos may look at your driving history and medical records with the Medical Information Bureau (MIB). These documents will provide more insight into your risk factors so that Ethos can generate a more accurate quote.
In some cases, this analysis can work in your favor. However, since other companies don’t pay as much attention to your specific situation (with term life insurance, at least), your rates may be slightly higher with Ethos.
That being said, the prices offered by the company are competitive within the industry. That is one benefit of having no infrastructure and limited overhead.
Responsive Customer Service
As you’re filling out the application, you will receive a text from a customer service agent. This way, if you have any questions during the process, you can either message or call a representative immediately.
Customer support is a primary advantage of Ethos, particularly when compared to some other insurance companies. Even though you can’t meet anyone face-to-face, it helps to know that someone is always available through chat.
Types of Life Insurance Ethos Offers
There are two policies you can purchase through Ethos. The first is a relatively standard term life insurance plan, and the second is whole life insurance (A.K.A. burial insurance). Here is a breakdown of both options.
Term Life Insurance
- Benefit Amounts – $100,000 to $1.5 million
- Age Range – 20 to 65
- Term Lengths – 10, 15, 20 and 30 years
When compared to other term insurance carriers, Ethos offers similar coverage options. Because this kind of life insurance is so simple, there aren’t many moving parts to consider.
When you apply, Ethos will generate some pricing based on the following details:
- Location (Ethos is not available in NY)
- Tobacco Usage
- Overall Health
Once you provide this information, you’ll get immediate results for several different plans. Ethos will break down the length of the term and the amount of coverage to make it easy to understand. The site also includes a slider mechanism so that you can adjust these details as much as necessary.
After you pick a plan, you will start the application process. Ethos has you sign an “Honesty Pledge” before you begin, and you have to provide your credit card information upfront. This step can be a little annoying, particularly if you are still shopping around. However, the company won’t charge anything until you make a final decision.
Details for the Application:
- Phone Number
- Income Level
- Employment Status
- Purpose of Insurance
- Plans for the Policy
- Whether You Have Other Coverage
- Medical Conditions
- Last Four Digits of Your SSN
- Driver’s License Number
- Lifestyle Information
- Travel Plans
Although some of these sections may seem relatively involved, you can speed through everything quickly. When asking about your plans for the policy, Ethos will want to know whether you plan to sell it, renew it, or let it expire at the end of the term. The company will also want to determine your reasoning behind buying life insurance, such as providing for a spouse or children.
Once you submit all of this information, Ethos will either generate a plan immediately or contact the underwriters for a more accurate rate. If that does happen, you will usually get a response within a week or so.
Part of the reason Ethos is so fast is that you have already submitted your credit card info. It can take a long time with other companies since you may or may not be interested in the plan once you get it.
Whole Life Insurance
- Benefit Amounts – $10,000, $15,000, $20,000, $25,000
- Age Range – 65 to 85
- Term – Forever
As we mentioned, Ethos’ version of whole life insurance is a lot like burial insurance. Typically, whole policies will allow you to build cash value over time, and you can purchase a plan at any age. Since you can only buy this kind of coverage after turning 65, it is designed to help with final expenses (i.e., a funeral).
However, there are some unique advantages to this policy, including:
- Accidental Death and Dismemberment (AD&D) – If you die from an accident, your beneficiaries will receive an additional payout. This rider is included in the pricing and doesn’t cost extra
- Cash Value Portion – Although you can’t accumulate as much money as you could with a standard whole life insurance policy, you can borrow against your CV if necessary
- Paid-Up Additions – If you want to add more coverage to your policy, you can do so with paid-up additions. Alternatively, you can get an extended-term insurance plan to help save on monthly premiums
- AAA Benefits – If you are a AAA member, your annual fees are waived once you sign up with Ethos
- Immediate Approval – Since this is considered “guaranteed issue” life insurance, you can get approved in minutes regardless of your age or health status
The reason why Ethos offers AAA benefits is that the policy is underwritten by AAA’s insurance company. This is also why you can only buy final expense coverage and not a regular whole life insurance policy.
Although there are some advantages to this policy, it does have some significant downsides. Here is a breakdown of potential issues that may make you think twice.
When shopping for whole life insurance, one advantage is that you can often get next-day coverage. This means that your policy is in full effect as soon as you get approved, so if you die the next day, your beneficiaries still get paid.
With “guaranteed acceptance” life insurance, however, there is a two-year waiting period. Insurance companies enforce this because some individuals with significant health problems may not make it that long.
So, if you die within those two years, your beneficiaries won’t receive the full amount. Instead, Ethos will return all premiums paid so far, plus a 10-percent bonus. The longer you’ve paid into the plan, the more your loved ones will get.
Unfortunately, there is only one plan, so you can’t choose a policy without graded benefits. However, if you’re in good health, there is no reason to think that you will die within the two-year window.
All guaranteed acceptance policies are more expensive because the company has to pay out death benefits to everyone who applies. When compared to term life insurance, these rates will be significantly higher.
Even if you are in good health, your monthly payments can be quite pricey, which means that this policy might not be the right choice. That being said, there is one distinct advantage of this plan – your rates will not increase.
Typically, when purchasing whole life insurance, the company will adjust your premiums based on your age. As you get older, you will have to pay more into the policy. Once you reach retirement age, your rates can get quite expensive.
Fortunately, with this plan, your rates are locked in as soon as you’re approved. While they are much higher overall, you never have to worry about increases later on.
Is Ethos Life Insurance Worth It?
Based on all of the factors we’ve gone over, should you buy life insurance through Ethos? Here are a few considerations to make before deciding.
- Pricing – Compared to other term insurance companies, Ethos’ prices are a little higher. This is likely because Ethos acts as a middleman between you and Banner Life
- Ease of Use – If you’re relatively young and healthy, your rates will be competitive. One advantage that Ethos has over other companies is its user-friendly website
- Fast Approval – Rather than waiting weeks or months for a response, you can get a customized plan in minutes (or days)
Overall, when comparing policies, if Ethos’ rates work for you, there is no reason not to purchase term life insurance through the company. However, when it comes to whole life insurance, Ethos is not much better than other brands that sell “guaranteed acceptance” coverage. The primary advantage of this policy is that your rates will never increase.
Contact NextGen Life Insurance Today
We make it easy to compare rates and plan options from a wide array of companies. We’ll do all of the hard work for you so that you can focus on what matters most. Call us today to see how we can help you get the coverage you and your loved ones deserve.
Bear in mind that some of the links in this post are affiliate links and if you go through them to make a purchase I will earn a commission. Keep in mind that I like these companies and their products because of their quality and not because of the commission I receive from your purchases. The decision is yours, and whether or not you decide to buy something is completely up to you.