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Comment by aqualinux | Hacker News Reader

The incumbent insurance companies maintain their position in the market through having large amounts of capital which lets them ultimately offer lower premiums than a new competitor entering the market which may have less capital. This means the legacy insurance companies don't need to prioritise investing in innovation to maintain their position, hence the old companies stay around.

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Also, insurance just doesn't have much interesting space for innovation.

In life insurance, for example, products other than simple term insurance really shouldn't exist. They're mostly just Rube Goldberg tax sheltered savings accounts for the wealthy.

In theory there ought to be some opportunity in the area of incentivizing people to improve their health behaviors. But carriers have been much slower to move on that than to futz around with the latest financial engineering and tax avoidance techniques.

I tried to buy decreasing term life insurance, where the benefit decreases continuously over 20 years, matching the needs of my family. I consulted with several agents and none of them could sell it to me. The best they could do was to divide the term into three time periods with different benefit amounts.

One agent told me that most customers drop their policy after a few years. The companies earn most of their income from the initial periods of policies, when payouts are rare.

I applied for term life insurance at 3 or 4 life insurance companies, and they all allowed you to reduce the benefit amount a few times over the term.

Not every year, but they said it was no problem if you wanted to halve the benefit halfway through or even a second time after that (and they would lower the premiums commensurately of course).

I have Principal and Protective in the US.

Your comment is essentially "me too". That's not interesting.

You are right, I was too quick to interpret the first time and thought you wrote that the best they could do is sell you three different policies that you cancel whenever you want to drop that benefit amount.

There's a startup that will do this but I don't know if you'd want a policy with a startup.

Please share a link. And in the future, try to share links or at least names of things you tell people about. If you can't find the link or name, then say so. I think saying only "the thing you want exists" is a little rude.

No thanks, not after that display of attitude.

Scolding people for not giving you more than they already gave you for free is a behavior that will never get you what you want.

Update: eh, I'm in a good mood today so I'll tell you the name, it's Ladder. No link though. You may Google it as penance for being annoying.

To save others the search: https://www.ladderlife.com/

Are you sure that Ladder offers decreasing benefit insurance? I looked all over their website and found nothing about decreasing benefits. The name "Ladder" might imply the technique, called "laddering", of buying multiple policies to achieve decreasing coverage.

In the spirit of saving the search - yes, it does offer the ability to decrease coverage as needed, with premiums decreasing by the same percentage as well (i.e. if you decrease benefit by half, premiums decrease by half, too).

Here's a link if it's helpful! https://www.ladderlife.com/laddering

Term life insurance is basically just a put option on your life with an expiration a couple decades out.

Whole life on the other hand is actually buying equity in your presumptive future earnings. It's considerably more capital intensive, but less expensive overall in most cases.

I don't know anyone outside of a heavily commissioned life insurance agent who thinks whole life is a good deal. You're flushing massive amounts of money down the toilet in the form of agent commissions and other fees. It's just another tax shelter for the wealthy, after they max out more attractive alternatives.

This article sums it up for me: https://www.nerdwallet.com/article/insurance/is-whole-life-i...

You're not wrong, but from the very good article you linked:

> I think only the top 20% of income earners should consider whole life. Term insurance is cheaper and is almost always the best type of insurance for 80% of the nation.

Many of the readers of this site fall into that 20%. If you're working at SV rates and aren't maxing out your 401(k) you're assuredly doing it wrong. If you are and want to save more, then whole life is an option worth researching.

Regarding life insurance product offerings: disability insurance is often advised by consumer protection groups for young professionals, who crucially depend on future income.

Regarding savings products, nothing wrong IMO, with tax subsidizing a "consume later" mentality, if the products are cost-effective.

Could this be one of the few cases where a DAO actually has a real world application?

Maybe, the insurer would still needs a claims-handling staff overhead to verify a claim made is valid. And perhaps also an underwriting team to assess the risk before the start of a policy. The DAO could replace the paperwork/emails, but I imagine that is only a small expense.

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