Founded in 2016, Ethos is an insurtech startup that is attempting to make it easier, more accessible, and less expensive for individuals and families to gain life insurance policies. Despite many people knowing about life insurance, the Insurance Information Institute reports that in 2020 only 54% of Americans had some kind of life insurance policy.
While many individuals recognize the need for life insurance, the insurtech startup attributes long, complicated processes and high costs as reasons why many people become discouraged or frustrated with the task. The startup allows potential customers to select their policies on their own. To create their life insurance policy, customers simply apply online by answering a short health questionnaire. Once the answers are processed, they can receive same-day life insurance coverage.
In addition, through the Ethos website, customers can learn more about what a life insurance policy entails, whether they need it at this point in their life, and how much coverage they should get. If requested, the company has life insurance agents ready to provide customers with more information. The business does hold the right to reject an applicant’s policy if there is any fraudulent activity regarding a person’s application or if the information provided is incorrect.
The startup business currently offers two life insurance policy plans: term life insurance and whole life insurance. The details of each life insurance policy vary, such as qualifying ages, benefit amounts, and term lengths. The life insurance services offered by the business are available in 49 states. Ethos works in tandem with life insurance companies like AAA Life, Ameritas Life Insurance Corp., TruStage, Principal, and Legal & General America.
$100 Million Funding Injection
The company announced it raised $100 million in a new funding round led by Softbank Vision Fund 2. Sequoia Capital, Accel, General Catalyst, GV, and several other investors also participated in this round.
This new funding comes shortly after the business raised $200 million in a Series D funding round in May, according to Crunchbase data. Ethos was previously valued at $2 billion earlier this year. With this new funding, the company increases its valuation to $2.7 billion.
Peter Colis, CEO and co-founder of the insurtech startup, said in a statement, “Everyone should have an opportunity to protect their families...Our goal isn’t just to offer the best insurance customer experience ever created, but to offer it to everyone.”
According to the company, this impressive new funding is a representation of the significant growth the business has experienced in the last year. The insurtech startup claims that its revenue and customer base have each increased more than 500% year-over-year (YOY). Additionally, Ethos is projected to issue more than $20 billion in life insurance coverage this year. Furthermore, the company has almost reached $100 million in annualized gross profit.
Colis said in a company interview that the new funding would be used to increase staff. Moreover, the business will use the new funding to fuel further growth and development of its life insurance platform to include other life insurance areas such as critical illnesses.
About the Author
McKenzie Carpenter is a graduate of Central Michigan University with a B.A.A. in Integrative Public Relations and French. McKenzie has previously worked for small businesses and nonprofit organizations.