How Makes Buying Insurance Easier

Some tasks are enjoyable, some are challenging but tolerable, and then there’s shopping for insurance. Unless you’re in the insurance business, you probably hate tackling insurance shopping. First, because you don’t want to spend time thinking about the bad things that could happen to you and your family, and second, because you have little to no idea how all of the different insurances work. You probably feel like you’re at the mercy of the agent selling it to you.

Don’t feel bad. You’re not alone. A 2013 Nationwide Insurance survey found that 53% of consumers believed their policy was too long, 43% said it was too complicated, 31% felt that it was overwhelming and 29% said it was confusing. Additionally, 57% of the 1,600 respondents said that they know more about their favorite TV shows than their insurance policies. Finally, only 40% had actually read their policy in its entirety within the past 12 months. (For more, see 7 Mistakes to Avoid When Buying Health Insurance.)

Enter PolicyGenius. The startup’s founders set out to answer the question: why is buying insurance such a frustrating experience? They noted that it’s stressful and a bit archaic. (Raise your hand if you’ve had to fax something to your agent. Who uses a fax machine anymore?)

The Background

PolicyGenius is the answer to all of this, according to co-founder Jennifer Fitzgerald. She says, “We're a mission-driven company. Our mission is to help families get the coverage they need and deliver a great experience while doing so. There's a significant hole in America's safety net: most families don't have enough life insurance or savings to cover the unexpected death of the breadwinner. Disability is a major cause of personal bankruptcies and home foreclosures. Nearly half of Americans say they couldn't cover an unexpected expense of just $400. Insurance is an important part of the solution to these problems.”

One of the stand-out features of the PolicyGenius site is the Insurance Checkup. There’s a better-than-average chance that you don’t know what you need – at least not in depth. The Insurance Checkup is a five-minute survey that, according to the website, will alert you to questions you didn’t know to ask, analyzes your financial safety net and gives you a to-do list based on the information you provide. 

There’s also a blog section full of articles and infographics to help you navigate not just your insurance questions but a broader range of questions in the personal finance space. In addition, there are easy-to-read buying guides for various types of insurance, including life, disability, pet and renter’s. (For more, see 4 Types Of Insurance Everyone Needs.)

But the website only tells part of the story. We wanted to hear more about the company so we emailed Fitzgerald some questions of our own.

The Interview

INV: How did you get started? What problem were you trying to solve for consumers?

Fitzgerald: I got started a few years ago, when my co-founder and I were both working at McKinsey [& Company]. As McKinsey consultants, we advised the top U.S. insurance companies on strategy and growth. We saw the insurers all struggle with the same problems: how to reach and engage digital consumer[s]. How do insurers achieve growth when their primary distribution channel [insurance agents] is losing reach and relevance? The average age of an insurance agent in the U.S. is 59. We saw that insurance companies are too slow-moving to solve these problems, so we [founded] PolicyGenius to solve them. (For more, see How Hard Is a Career Selling Life Insurance?)

For consumers, we are making the process of getting insurance advice, shopping for coverage and buying a policy much easier via a digital-first model. Similar to the innovation that's happened in retail banking and investing, we want to make the insurance consumer experience a great online experience.

INV: How is the experience different from traditional insurance shopping?

Fitzgerald: For the insurance products we launched with (life insurance, disability insurance and pet insurance), we have an intuitive online marketplace where it's easy to get instant quotes and compare policies apples-to-apples. Unlike other sites, we don't sell consumer quote requests off to other agents as leads; we handle the customer experience end-to-end.

We also have great content and a tool, called the Insurance Checkup, that provides instant, customized insurance advice. It's a one-of-a-kind tool that replaces the traditional “kitchen table conversation” that people would traditionally have with their neighborhood insurance agent.

For life insurance, which has been our most successful product since launch, we have the most accurate online quoting available.

INV: What is your revenue model, and how does it translate to you being on the side of the customer rather than the insurance companies?

Fitzgerald: We are a broker and get paid a commission by the insurance companies when we sell a product. It's the same revenue model as brick-and-mortar brokers. It's important to note that we're an independent broker, meaning we don't work for any one insurance company (like the State Farm or New York Life model) and can quote and offer a wide selection of insurers, ensuring that we deliver the best-fit policy to shoppers. We believe in full transparency, so we show all quotes to a shopper and don't push one insurer over another.

INV: How do you ensure that a customer's identity is safe from cyber attacks?

Fitzgerald: PolicyGenius is committed to providing the highest level of privacy and security for the health data of the individuals who trust us. HIPAA, the Health Insurance Portability and Accountability Act, is a federal law that mandates industry-wide standards for protecting and confidentially handling sensitive patient data. Any company that deals with protected health information (PHI) must ensure that all the required physical, network, and process security measures are in place and followed.

We've partnered with leading software security providers to ensure that our hosting environment exceeds industry standards for security and compliance, and that our processes and procedures are audited regularly by industry-leading HIPAA experts. (For more, see How to Curb Your Biggest Cybersecurity Threat.)

INV: What’s next for PolicyGenius? What do your customers ask for the most that you currently don’t offer?

Fitzgerald: We're adding more products to our platform. We get great customer feedback and often get asked when we'll deliver the same great experience for auto insurance, homeowners insurance and other lines, too. We'll be adding new products in the next few months.

The Bottom Line

There are other insurance sites out there trying to do something similar. Many will simply send your information to companies and agents, causing what feels like an endless barrage of spam. Reading reviews suggests that PolicyGenius has a different feel and experience than these other sites. It's worth exploring.