Bestow Life Insurance Review

Update: On December 1, 2020, Bestow announced that it would purchase Centurion Life Insurance from Well Fargo. The purchase would allow Bestow to be a carrier, offering additional products outside of its current relationship with North American Company for Life and Health. Source.

A fairly recent entrant into the online life insurance market, Bestow, Inc., started selling policies in 2018 and has done a decent job getting its name out since then.  The Texas-headquartered company just calls itself “Bestow,” cunningly employing a verb in place of a proper noun in the tradition of “Sting” and “Slash.”

Bestow is part of the new breed of online brokers recently gobbling up market share within the life insurance industry, so far raising $67.5 million in funding.  By emphasizing convenience in the application process, online brokers try to appeal to consumers who like the idea of life insurance but don’t want to invest a lot of time and effort into getting it.

No Exam

Along with offering no medical exam life insurance, Bestow offers a simple application process that takes very little time and can be completed entirely online.  Screening is performed primarily by software that evaluates applicant responses in conjunction with digital records searches.

Taken together, this lets prospective insureds apply for coverage and receive a genuine coverage decision and rate quote in one sitting—typically, in under an hour.  By comparison, traditional underwriting often takes weeks, especially when a medical exam is needed.

To facilitate the easy-access coverage it offers, Bestow focuses on attracting low-risk insureds. By eliminating higher-risk segments of the market, Bestow can get away with relaxing its underwriting standards and accelerating the approval process.

Hip

In particular, Bestow aims its marketing efforts toward younger applicants.  Bestow ingratiates itself with youthful consumers by using phrases on its website like, “now, that’s the ultimate definition of adulting, amirite?”

While some prospective insureds will no doubt view this wording as juvenile and condescending, Bestow believes that consumers raised in the internet age will appreciate the company’s casual approach to life insurance.

Bestow serves as a broker between the insurance carrier and the consumer.  The company markets policies, processes applications, and, if a policy is sold, handles payment transactions.

But Bestow does not itself underwrite life insurance.  Instead, Bestow sells and administers term life policies issued by North American Company for Life and Health Insurance (“North American Life”). Bestow won’t sell you any other type of coverage or a policy issued by any other carrier.

Consumers between ages 21 and 55 in every state but New York can purchase life insurance from Bestow. Regardless of where you live, though, your interaction with Bestow will occur predominately online.  Licensed agents are available by phone, but virtual communications with minimal human involvement are obviously what Bestow is aiming for.

Bestow’s revenue is derived from commissions on the policies it sells.  An automated process requiring little human involvement creates the potential for high sales volume with relatively low payroll overhead.  The trick is pulling off that combination while still maintaining decent levels of customer satisfaction.  It’s still early, but so far Bestow seems to be receiving fairly good marks from its clientele.

What Types of Life Insurance Does Bestow Sell?

Bestow sells level-term policies (and level-term policies only), with coverage starting at $50,000 and going as high as $1 million.  “Level-term” means that, after a policy is issued, it provides coverage over a predetermined, finite period. And, during that period, the premiums stay the same.

Ages 21-55

New insureds must be between ages 21 and 55, and can purchase either a ten or twenty-year term.  That’s it, though.  The usual 15, 25, and 30-year varieties are not on offer from Bestow.  On top of that, applicants aged 45 and over are only eligible for the ten-year term.

Bestow says on its website that the company is looking to add some more variety to its term selection—and two-year terms were apparently in the works at one point.  But, for now, it’s ten years, twenty years, or nothing from Bestow.

When a Bestow policy’s term expires, it cannot be renewed.  By contrast, most level-term policies can be renewed at the end of the term until the insured reaches a certain age (typically, somewhere from 70 to 90).  Premiums increase upon renewal, but you at least have the right to renew if you’re willing to pay the higher premiums.

Not so with Bestow.  When a policy expires after ten or twenty years, you either have to apply for a new policy or content yourself with not having life insurance any longer.

All Bestow policies are issued and underwritten by North American Life and further backed by Munich RE.  North American Life holds an A+ rating from A.M. Best, which means it’s a financially solid company.

How Does Bestow’s Life Insurance Application Process Work?

Bestow is betting the house that its simple, speedy online application process and streamlined underwriting will make up for the glaring lack of options offered by the company.

Before you start to apply, you can access a preliminary quote in just a minute or two.  The quote tool on Bestow’s site asks for the applicant’s date of birth, gender, height, weight, and state.

From there, you can tinker with the coverage amount and term length (just 10 or 20 years, though) and get a basic idea of what the premiums would look like.

Now, if you want to formally apply, you’ll need to input your contact information and then set up a site account and password.

Next, Bestow will ask about 20 or so questions about your health status, lifestyle and activities, and medical history.

And that’s about it.  Bestow really does have an easy application.

Underwriting

Once the information is submitted, Bestow does its underwriting.  However, instead of forwarding the file to a grizzled insurance-industry vet, Bestow relies on software to evaluate the information provided and the applicant’s “prescription and credit history, driving records, and prior attempts at insurance.”

Bestow is confident that its algorithmic sorcery “can underwrite policies as effectively as with a medical exam.”  Or, at least as well for the limited pool of applicants Bestow is willing to consider.

With no medical exam or oversight from a human underwriter required, Bestow can accelerate the underwriting process.  In most cases, you see the actual rates available within just a few minutes.

If you’re approved and you decide to purchase the coverage, you confirm the term length and coverage amount at that point.  Then, you enter your credit card info to formally accept the policy.

And, when the whole shebang comes to an end, you will hopefully have obtained legit life insurance in little or no time.

Policy Administration

Bestow differs from many online agencies in that Bestow administers the policies it brokers.

So, instead of working directly with the life insurance company after a policy is purchased, Bestow’s customers can make payments and manage beneficiary designations through Bestow’s website.

And, if a policy is triggered, beneficiaries can file claims through Bestow.

Like many brokers and insurers, Bestow offers a 30-day free-look period after a policy is issued. Basically, if after purchasing a policy, you decide within 30 days that you don’t actually want it, you can cancel and get a full refund.

What are Bestow Life Insurance’s Strengths?

Well-Designed Website and Interface:

Bestow has an attractive, easy-to-navigate website that provides a lot of useful information about Bestow as a company and the policies it markets.

There is not much in terms of research about life insurance generally, but you can find the answer to most any question you might have about a Bestow policy.  You might make the argument that Bestow’s presentation sometimes talks down to its potential customers, but that would probably be nit-picking.

Quick, Easy Application and Streamlined Underwriting:

Bestow’s whole model is built around making the life-insurance-purchasing process convenient and painless.  The online application is remarkable in its brevity, and the accelerated underwriting-by-algorithm lets eligible consumers get same-day coverage.

Bestow has to sacrifice some things (e.g., applicant pool, term lengths, policy options, riders) to make the application process as quick as it is.  But the company undeniably accomplishes its goal of making the process simple and time-efficient.

In a nutshell, if you know you want minimalist term coverage with a ten or twenty-year term, and you’re in the correct age range, and you’re not concerned about comparing rates between companies—Bestow can get you reliable life insurance from a reputable carrier with negligible exertion necessary.

Preliminary Term Life Rates with Minimal Information:

If you’re still just doing some market research and want to get an idea of what different companies’ term life insurance rates look like, Bestow lets you get an estimate without providing detailed contact information.

You’ll only see Bestow’s (i.e., North American Life’s) term rate, but it’s easy enough to find estimates from other companies on other sites.

What are Bestow’s Weaknesses?

Only One Carrier to Choose from: 

Bestow describes itself as an “independent agent and third-party administrator.”

That sounds great, but, from the consumer perspective, Bestow might as well be a captive agency of North American Life.

They can’t get you a policy issued by any other carrier.  That means that, when you apply for coverage through Bestow, you only get to see one company’s rates.

One of the biggest advantages of independent brokers is that they usually make it simple to compare rates from multiple insurance companies.  In fact, they want you to compare the rates within their networks because you’re move likely to purchase a policy if you think you found the best deal.

That’s not how it works with Bestow.  They make it quick and convenient to buy term coverage, but, for that convenience, you’re giving up (among other things) competition between carriers.

Life insurance companies can vary considerably in the rates they charge similar insureds.  The odds of finding the best rates if you only get a quote from one company are not very good.

Very Little Flexibility:

These days, consumers are used to having a lot of options.  When you visit a car dealership, you typically don’t just buy whatever is on the lot.  You look for a reasonably priced make and model you like, with the options you need, in a color that suits your taste.

Bestow’s automated application process is convenient and efficient.  But it also significantly limits your options.  As a result, you can’t customize coverage to your individual needs.

You can purchase 10-year level-term or 20-year level term.

That’s it.

Want a permanent policy like whole life or universal life?

Not happening.

Want an extended term length to cover you throughout your entire career?

You’re not getting it from Bestow.

How ‘bout a rider that provides supplemental coverage for your spouse or children, or that lets you convert term coverage into whole life, or that provides any of the many other policy enhancements on the market?

Not on Bestow’s menu.

Even if you know stripped-down term coverage is what you want, Bestow won’t sell you a policy with a term over 20 years.

Now, a twenty-year term may sound like a long time at first blush.  But, let’s say you’re applying at age 30 just before the birth of your first kid.

A 20-year term takes you through age 50, at which point the child will likely still be in school.  If you still need life insurance at that point, you’ll have to apply for another policy (because Bestow policies aren’t renewable).

As a 50-year-old, you’ll be paying significantly higher premiums, and, if any health issues pop up during the 20-year term, you might not be able to qualify for coverage at all.

So, if you reasonably anticipate needing coverage for longer than 20 years, you’re probably better off just getting a longer term to begin with—or getting a permanent policy if that fits your financial situation.

On top of that, Bestow won’t even sell you the 20-year policy if you’ve reached age 45.  If you need to buy term coverage at 45, there’s a strong chance you’ll still need it at 55.  And, once you cross the “50” threshold, coverage is going to get a lot pricier.

Only Available for a Small Segment of the Public:

To make the streamlined application and accelerated underwriting palatable to insurers, Bestow has to limit its services to the lowest-risk insureds.  If you’re over 55, Bestow can’t help you.  If you’re 45, you can only get a ten-year term.

Most brokers can easily find a ten-year term policy for a 60-year-old in reasonably good health.  But streamlined underwriting makes it more difficult to determine precisely who is in reasonably good health.

Bestow’s answer to that dilemma is to just not sell life insurance to older applicants.

Remember, you can’t renew a Bestow policy.  If you buy a ten-year policy at age 50, it’ll expire when you’re 60 and—not only can you not elect to keep the policy in place for an increased premium—you’ll have to start from scratch and apply for a new policy from another company.

If you anticipate needing continued coverage well into your working years, in the long run, it’s probably better to just get a 30-year term or permanent policy from the start.

Conclusion

If you want a 10 or 20 year term policy, you are in perfect health, and you don’t want to shop around for the best rates, choose Bestow.