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In general, insurance products are rife with confusing details and stipulations – an aspect of an industry already famous for opacity. These common issues simply make it harder for consumers to secure coverage. Life insurance is certainly not an outlier.
According to a recent survey, Americans think life insurance is as complicated as the notorious tax season. It’s a problematic accolade for such a crucial industry; life insurance can be an essential backup plan if the unthinkable happens. Barriers to entry don’t do consumers or their families any favors.
One unique insurance agency, Leap Life, is trying to counter this problem with simplicity and transparency through an online tech solution that matches consumers with ideal life insurance policies.
I had the lucky opportunity to ask Nir Yeffet – CTO & Co-Founder of Leap Life – a few questions about life insurance, Leap Life, technology’s impact on the industry, and more. Scroll down to read what he had to say.
In this Q&A:
About the Startup Phase
Q: When and why did you decide to start a company like Leap Life?
A: After many years in advertising technologies (eBay Advertising and Adap.tv), I felt that it would be great to work on something completely different – where I could feel that I’m helping consumers directly.
We started Motivate Solutions with the promise of helping middle class folks with their personal finances. After a few months of trying different products, from connecting consumers to financial advisers to a debt repayment product, we realized that the biggest niche that is underserved by technology inside personal finance is life insurance.
Q: How did your previous experience prepare you for tackling the insurance industry as a new company with a technical solution?
A: My career is about the software revolution of various industries, to name a few: Accounting, Archaeology, Online gaming, Online video, E-commerce, Advertising, Pharmacies & Health Insurance. Life Insurance is no different, it needs software in order to excel.
In addition, I learned about high scale at eBay and Adap.tv, I was responsible for HIPAA compliance at Oration and was part of the SOX compliance at Shopping.com (eBay). I led a large team of engineering, interfacing marketing, sales and account management at Adap.tv.
Q: What were some unique challenges to entering the life insurance industry as a technology company?
A: The unique challenges were learning actuary and cracking down on cost of acquisition of consumers. Actuary is a science that takes years (about six years) to master. I had about two weeks to understand how this works. Obviously, I’m far from an expert…
The cost of acquisition of consumers is 50 times more than, say, a parenting app. A parenting app can be improved by iterations and by expanding its capabilities to the point where eventually it can charge more for the product. If you got it right, you are going to be profitable.
Life insurance products are heavily regulated, incentives are illegal, and to the average consumer, life insurance is an unattractive product (hence the high costs). Cracking down on cost of acquisition is really the only way to become profitable, and the starting point is really tough.
How Leap Life Approaches Life Insurance
Q: What major problems do you see in the life insurance industry today? How is Leap Life addressing these problems?
A: When someone buys any product that is not life insurance, they are allowed complete freedom of choice. Whether it is a phone, car, house, or kitchen appliance, you always have a variety of features to choose from. When it comes to Term Life Insurance, you can choose how many years and how much coverage you want. You may also select the beneficiaries.
The rest is up to the company that is selling you the insurance: your financial situation, you and your parents & siblings health, and your lifestyle (smoking, skydiving, etc.) will determine your product (“table rating”) and cost. Different carriers will price various situations differently. Some might ask different questions and others will ignore certain parameters.
We call it “Price Opacity” and our studies shows that about 70% of the population sees 50% (or more) more expensive prices. Our matching technology helps consumers find the company and product that is right for them. More about the technology below.
Q: How does Leap Life help the average consumer navigate the life insurance market?
A: Beyond our life insurance matching technology, we have a library of unique articles, Life Insurance 101, that was created based on real questions that came up. Our excellent call center is also available to answer any questions.
Q: Are you able to broadly elaborate on how Leap Life’s technology is able to match consumers with ideal life insurance policies?
A: Leap Life’s matching technology is designed to help consumers find the right policy for their unique situation. By asking a few simple questions about health and lifestyle, we can help consumers choose the company and the product that is right for them.
The technology uses a unique algorithm that is changing as the market changes as well as when new products are being released. We take into consideration multiple parameters that varies from “does company X willing to insure this person” to simple best price matching.
Q: How is Leap Life working to improve the performance of its technology?
A: Leap Life is constantly adding new carriers and new products to its online offering. A larger variety of products and carries allows us to better serve everyone.
Q: What advantages does Leap Life offer its users compared to other agencies?
A: Leap Life will help users find the right policy for them, based on their health and lifestyle and by default will not offer products/carriers that have high chances of declining them. Leap Life will then offer to apply online, and if qualified, skip the medical exam and get instant approval! Our online application can easily navigate users through the process.
Q: How does Leap Life continue to help its users after they take out a policy?
A: According to Shauna Visconti, our sales director, we offer full agency services to our clients after their policy is in force. They are welcome to call us at any time with questions in the years ahead or if they need to make changes such as updating their address or amending their beneficiary – we will handle this for them.
We monitor for any missed payments on their policies and keep them advised if a payment is missed. If so, we can resolve it with them and make sure their policies do not cancel. We also check in with them annually to see if anything has changed in their life, and we make sure their current policy is indeed still meeting their needs and the right fit for them.
About Leap Life
Leap Life is a licensed digital life insurance agency and technology company, available everywhere in the United States, excluding New York. The San Francisco-based company combines leading data science, deep underwriting knowledge and proprietary technology to match consumers with the right carrier. Consumers can apply online from the convenience of or smartphone. Learn more at: www.leaplife.com
About Nir Yeffet
As co-founder and CTO of Leap Life, Nir Yeffet brought extensive experience in advertising technology and software development in industries ranging from accounting to online gaming to e-commerce.
Author: Andrew Rombach