Everyone knows that life insurance only pays out when you die, but few providers actively choose to overtly draw attention to death.
Now, a new insurance provider has done just that. Dead Happy is a fully online ‘pay-as-you-go’ life insurance broker which launched last month.
Curious applicants will be greeted by a trendy website, quirky branding, and a laughing skull for a logo. And in order to encourage them to think about providing for others when they die, it invites customer to ‘make a deathwish’
But aside from the unusual name and zany marketing is this provider offering anything new? We take a look.
Dead Happy’s quirky branding approach sets it apart from other life insurance providers – as it does its offer to ‘make a deathwish’ with the proceeds of your policy
How does it work?
Dead Happy is an intermediary which designs its life insurance products itself but ultimately cover is underwritten by Gen Re, an A rated reinsurer.
It describes itself as a ‘pay-as-you-go’ provider. This means your premium will be priced yearly on your current level of risk, making it cheaper to begin with.
This does mean however that your premium could increase over the life of the policy, unlike traditional policies.
Should you buy a 10-year life cover policy?
Life cover pays out when you die. If you take a 10-year policy, in order to benefit, you’ll need to die within that timeframe.
Before you buy life cover, it’s worth thinking about why you’re getting it.
Most people take life insurance to cover the rest of their mortgage if they die before it’s repaid and they want their family to be able to stay in the home.
Others take life cover and put it in trust to help their children pay the inheritance tax bill after they die.
If you take a cheap 10-year policy and don’t die in that time, you’ll then need to buy a new life policy but you’ll be 10 years older and could find that you’re paying more for your premiums because that policy started when you were older and therefore a higher risk.
At This is Money, we would always suggest speaking to a specialist adviser before you buy any insurance like this.
You can find one here.
Despite this, the group claims it is cheaper overall than traditional life insurance.
It says on average its premiums cost just £14.78 per month across 10 years, compared to the existing industry average of £23.25 per month.
‘This is because Dead Happy’s life insurance is priced annually based on a customer’s current age and risk level, not a prediction about their risk of dying across the next 20 years,’ the group states.
The policy is limited to 10 years, which can be changed at any time, but if you want to extend or increase the cover you will need to answer the underwriting questions again.
The fact that coverage is only available for up to 10 years is likely to be the main factor behind the lower cost.
This does mean that once those 10 years are up, it is very likely if you went for another 10 years your premiums would rise.
The application process itself is massively streamlined. It can take just a few minutes, and the premium is calculated from just four questions.
Phil Zeidler, Dead Happy co-founder, said: ‘Traditional life insurance is overpriced, complex and dull. People are paying over the odds as a result.
‘Our philosophy is different – you’re far less likely to die when you’re younger, this means you should pay less. We’re making this possible for the first time in the UK.’
You choose your level of cover by filling out ‘Deathwishes’ – scenarios you would like to happen after you die
The process is purely digital, meaning you can’t speak to anyone in person or on the phone, and there is no advice.
This isn’t the first time an insurance company has offered annually increasing premiums. Sun Alliance once offered a plan called the Progressive Protection Plan where the cost rose in line with age.
Peter Chadborn, director at Plan Money
It didn’t prove successful because advisers and clients didn’t take to the concept.
Alan Lakey, an independent financial adviser at Highclere Financial, said: ‘Dead Happy states that premiums will rise according to age and risk level and it is this second part that slightly disturbs me.
‘Nowhere on their site can I find out what this means. For example, does it mean that if I change my occupation to North Sea diver they will up the costs at the annual review stage?’
Peter Chadborn, director at Ifa firm Plan Money, said: ‘This is very unusual. With general insurance, things like home and car insurance, you take out yearly contracts.
‘As an adviser, I would be looking at how much the total cost of a traditional policy would be over 10 years compared to this stepped one and looking at the total.
‘But the policyholder is not going to know what the premiums are each year because of market rates, so it will be difficult to plan around it.’
What else is different?
Dead Happy’s website and marketing is clearly set up to catch the attention of the millennial market, and it isn’t sold in quite the way you would expect from a traditional financial services provider.
For example, you pick your level of cover by filling out what the company calls ‘Death Wishes’.
The company asks you to imagine scenarios you would like to happen after you die, how much you think it will cost, and then prices accordingly. For example, you could choose, ‘send my family on a big holiday’, and choose £10,000 of cover.
Dead Happy suggests ‘Death Wishes’ to applicants – scenarios they might want to be covered for in the event of their death
Zeidler said: ‘We’re trying to break new ground in how death is talked about, to help people plan for what happens when they die – without resorting to “project fear”.
‘Death is never going to be the top of anyone’s list of favourite pub conversations, but we hope to at least make it a more approachable, less daunting conversation to have.’
In reality this is no different from any other life insurance product – the applicant will always choose or take advice on what level of cover is right for them, and their premiums will always reflect the size of their potential payout.
But this does add a twist to the process which may appeal to some.
‘Life insurance that’s more hoverboard’ might not strike the right tone for applicants worried about whether their mortgage will be covered if they die
Many customers, especially younger ones, wish their financial services providers were a little less stuffy.
For some, Dead Happy might have gone a little too far in the other direction, however.
The chief executive, Andy Knott, appears on the website in skull makeup, and describes how he is ‘firmly focused on causing mayhem, chaos and trouble-making.’
Andy Knott, co-founder and chief executive of Dead Happy, taken from the company’s website
‘Some people seem to think it’s a bit weird…,’ he adds. ‘They’ve got a point.’
And if you begin the application process online but abandon it part way through, you will be sent multiple emails by the company.
Is it any good?
The company falls into a wider group of fintechs using quirky branding in an attempt to appeal to younger customers.
Whether this is something people actually want from their life insurance provider remains to be seen.
For a purchase as important as the indemnification of your family’s finances in the event of your sudden death, ‘life insurance that’s more hoverboard’ might not prove to be the best sales approach for all.
Dead Happy’s logo is a laughing skull
But behind all the noise is an interesting and different way of buying life cover that could fill a gap in the market for many buyers, especially younger customers.
It could be particularly beneficial for those climbing the career ladder who would rather opt for a lower premium initially and make up the difference, or take out a more comprehensive policy, later on.
Chadborn added: ‘I’m not sure someone in their 20s should buy life insurance just because it’s cheap if they don’t need it.
‘There are more important insurances out there for that age group like critical illness or income protection.
‘There is a paradox here. The branding is appealing to 20-somethings, but they’re the people least likely to need life insurance. The demographic this is appealing to the most needs to product the least.’
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