Life insurance: We’ve all been told that we need it, probably several times over. But, with its complexity and so many different companies trying to convince you their service is best, it’s no wonder that shopping for it can overwhelm the best of us. Many insurance companies provide their own life insurance products, while insurance brokers and independent agencies sell policies from several sources. However, in the current day and age, you can now add DTC life insurance companies to the list of providers to consider — i.e. those who cut out the middlemen and offer coverage directly to consumers.
Dayforward is a modern life insurance provider, and it’s the topic of this review. As a newcomer in the space, we’re excited to see how it stacks up against the many (many!) other life insurance companies out there today — both new and old.
A life insurance low-down
Before we delve into the specifics of Dayforward, let’s lay the life insurance groundwork. Life insurance allows you to pick beneficiaries who will receive a payment after you pass away. This makes sure that your loved ones are financially cared for when you’re gone.
While the purpose of life insurance may be simple, navigating the many types available on the market isn’t so clear-cut. Plus, with countless insurance companies and agencies vying for your business, getting the coverage that you need can feel like an uphill trek.
We won’t lie – there’s a dizzying number of life insurance policies out there. The term, whole, group, universal, variable, variable universal, indexed universal, and final expense insurance are all different varieties. Before you lose all hope, know that there are only two broad life insurance types that you need to know about: term and whole.
What is Term Life Insurance?
Term life insurance is considered more simple than whole life insurance. That’s because it only pays out if you die during the term of the policy. Policy terms are typically between one and 30 years. Once your policy stops, you’ll stop paying the monthly premium, but your beneficiaries won’t get paid if you pass away.
What is Whole Life Insurance?
Whole life insurance is different because it’ll provide a payout whenever you die, no matter how long you live. But, whole life insurance can get pretty complicated because policyholders can also build up cash value. There are many types of whole life insurance, all of which are tricky to explain in a few short sentences. So, given that Dayforward offers term life insurance, we’ll leave that explanation for another day.
As we mentioned before, Dayforward is a newcomer in the space, offering a one-of-a-kind income replacement life insurance model. As the newbie on the block, Dayforward is already making waves, having been profiled by Wall Street Journal, Forbes, and Business Insider.
Let’s learn more about what they offer.
Review of Dayforward life insurance: What do they offer?
The new type of life insurance that Dayforward offers is designed to protect your income. This means that if you pass away, your family will continue getting the equivalent of your paychecks twice a month until your kids are financially stable adults (at age 18, 21, or even 26).
To start with Dayforward, you’ll input your yearly or household income and the age of your youngest child. From there, their platform can recommend a personalized policy that provides an annual income guarantee until your children become adults, plus $10,000 for funeral expenses (yep, they’ve really thought of everything).
The idea behind Dayforward is simple: Most people need life insurance to replace their income for their families in case they pass away. So, why not skip the complexities of traditional insurance and instead create a vehicle that literally protects your income? Dayforward is on a mission to make life insurance more….straightforward. Think of it as “income replacement insurance” for simplicity.
How much income does Dayforward cover?
With Dayforward, you can protect $12,000 to $500,000 of income per year, with coverage options up to $10 million on the first policy day. The term lengths range from 10 to 27 years, and people aged 18 to 50 are eligible for instant coverage. Maximum coverage is provided until you turn 67.
What does Dayforward life insurance cost?
Life insurance with Dayforward starts at $7 per month for applicants determined to have excellent health. The premiums include a monthly $5 subscription fee and a fee per every $1,000 protected under the policy. For reference, Bestow and Fabric, which are DTC life insurance competitors, advertising rates starting at $10 per month and $13 per month, respectively.
Is Dayforward reinsured?
All of Dayforward’s policies are financially backed. The company, like other insurance providers, is required by insurance regulators to hold a significant amount of money in their accounts so that they can fulfill future obligations, including expected payouts to beneficiaries.
Dayforward’s policies are also reinsured by Munich Re, one of the biggest and most established reinsurance companies in the world. It has an A+ (Superior) rating from A.M. Best. This gives policyholders peace of mind in knowing that their family’s financial future is protected.
What’s Dayforward’s life insurance application process like?
Online, you can see prices for Dayforward with a simple quick price tool. Just fill in your birth date, gender, estimated annual income, and the birthday of your youngest child (there’s a box to check if you don’t have kids or are expecting). You’ll get 4 different price estimates for their policy according to the state of your health.
During the application process, Dayforward will ask you a few questions about your lifestyle and health to help determine your monthly cost. Plus, they have non-commissioned licensed life insurance pros you can call that can help work with your needs and find coverage that fits into your family’s budget. That’s pretty refreshing, given how professionals in the rest of the industry are typically incentivized (through kickbacks) to push certain products on consumers that aren’t always in their best interest.
What makes Dayforward’s Insurance unique?
1. Steady Income vs One-Time Payments
Traditional life insurance sends a one-time payment to your beneficiaries. To more effectively protect your family’s standard of living over time, Dayforward instead provides a steady stream of income in the form of a twice-monthly check to your beneficiaries. These regular payments more closely replicate your paychecks, allowing for easier financial management when you’re gone.
2. Life Insurance Exams (or lack thereof)
Life insurance exams are conducted by most insurance companies to help place you in the right risk class. By collecting your medical and lifestyle history to identify any underlying conditions or added risks, carriers are able to determine your monthly premiums. And naturally, if you appear to be at a higher risk, traditional insurance companies will charge you more.
Dayforward doesn’t work that way. More than 95% of Dayforward customers purchased policies without having to undergo a medical exam. So, for the majority of Day forward users, life insurance exams are a thing of the past. For the few who are required to get one, Dayforward can send a qualified examiner directly to meet you at your home or office to make things extra convenient.
3. The Right Amount of Coverage
With other life insurance policies, many people have the wrong amount of coverage. Some are underinsured, meaning that their beneficiaries will still lose some income if the policyholder passes away. Others are over-insured, so they have to pay more for coverage that they don’t really need. Dayforward believes that the right amount of coverage for most people is simply the amount of income they earn because their income is already supporting their standard of living as it is today. Dayforward creates policies based on the income your dependents already rely on to keep up their standard of living. That’s all there is to it.
4. Coverage for the Unexpected
If you die early into your policy term, Dayforward will provide your family with approximately 2 times more money over the course of your policy than a conventional policy of the same length and a similar price. This is because Dayforward is tied to income, and if you die early, your family will need to have your income replaced for several years.
5. Greater Flexibility
By this point, we all know that life is entirely unpredictable. Aside from everything that’s up to chance, people change their minds all the time — even about major life decisions. So, if you have another child or your income changes, Dayforward is flexible enough to accommodate. Every policy comes with an Income Increase rider at no additional cost and with pre-set pricing to use the benefit. This feature can be used to easily adjust your coverage amount without having to reapply. Dayforward’s Child Extension rider automatically will also be added to policies for all eligible policyholders, at no additional cost and with pre-set pricing. Some conditions and limitations apply to these additional features — contact Dayforward for more details if you are curious.
Drawbacks: What can Dayforward improve?
1. Limited Geographical Availability
Currently, Dayforward life insurance policies are only available for people living in Texas. That’s a pretty serious limitation, we admit, but the company is working quickly to expand to all 50 US states. For now, if you want a Dayforward policy somewhere other than Texas, you can join their waitlist.
2. Smaller Payout For Some
With Dayforward’s income replacement model, people who die later into their policy term will have less of a total payout on their policy than they would with a traditional policy. This is intended to save you money, as, at this point, your family won’t need to replace as many years of your income. But if you die anytime within the last three years before your policy ends, Dayforward will ensure that your family still receives at least 3 full years of your income. Nonetheless, this model may not be for everybody — just depends on your individual situation and how you hope to use this vehicle.
The Verdict: Is Dayforward life insurance the way to go?
If you have children, protecting their financial futures is important. But, with the complexities of traditional life insurance, it’s often hard for Americans to get the right amount of coverage. It should be possible to have a Goldilocks life insurance situation: Not too much, as that leads to excessive premiums, but not too little, as that wouldn’t properly protect your family.
By insuring your income, Dayforward makes it easy to maintain your family’s quality of life after you pass away. Along with the speedy online application process and the likelihood that you won’t need a medical exam, Dayforward helps people get the right amount of insurance ASAP, with as little headache as possible. If you’re in Texas and need life insurance, we definitely recommend checking it out. For everyone else, you’ll have to wait in line for your Dayforward policy. But, as they say, good things come to those who wait, and we anticipate the company expanding into all 50 states very, very quickly.
How has your experience with life insurance been? We’d love to hear about your experience. Let us know how you like it in the comments below!
