Social Finance (SoFi), the fintech unicorn best known for its lending products, today began offering life insurance to customers through a partnership with Ladder, a Palo Alto, California, startup. Customers who sign up for the co-branded service will be eligible for fully underwritten term life coverage worth up to $8 million. Most will get a policy quote instantly, sidestepping the hassle of a doctor’s appointment.
SoFi previously offered life insurance to its 500,000-plus members through Protective. But the customer experience was relatively traditional, and the value of connecting the service to SoFi was unclear. With Ladder, SoFi customers will be able to increase or decrease their coverage over time, as their needs change. SoFi, with its knowledge of customers’ overall finances, will be well-positioned to recommend such adjustments. (Developing an overall “advice” solution is a top-priority for the company.)
Since the start of the year, SoFi has been moving quickly to realize its vision of becoming a true financial hub. Last month, the company unveiled SoFi Money, a mobile-first checking and savings product. Meanwhile, newly installed CEO Anthony Noto, a former Twitter executive, has been talking with bankers about raising $500 million in debt to pursue acquisitions, according to the Wall Street Journal.
“We’re not hard-set that we have to develop every solution,” Noto told Fast Company in June. By 2019, he plans to add services including brokerage, cryptocurrency, and home equity.
In insurance, SoFi appears eager to partner. John Gardner, general manager for SoFi Wealth, says the company is exploring options in categories like property and casualty. There, startups like Lemonade have built flexible APIs akin to Ladder’s, and the integration possibilities are enticing. With Ladder, for example, SoFi plans to eventually automate aspects of the needs assessment that the life insurer uses to generate a coverage recommendation, using existing data on users’ financial situations.
For Ladder, the news reflects a growing recognition that life insurance is challenging to sell direct-to-consumer. “Investing platforms, lending platforms, benefit platforms—there are a number of places where life insurance is part of the overall puzzle, and should be interacting with these other products,” says Ladder cofounder Jeff Merkel. “Where we think it gets interesting is the more they integrate.”
To date, Ladder has raised $54 million in venture funding. The company operates in 49 states, and is pursuing a license in New York.