Peter Colis, Ethos

Nov 16, 2018, 05:00 PM
How Did A Startup Get Kevin Durant and Jay-Z Excited About Life Insurance? 

The Benzinga Fintech Focus Podcast will take a brief detour this week into the world of term life insurance. 

This week’s episode features an interview with Peter Colis, founder and CEO of Ethos, a startup looking to change the way consumers buy term life insurance policies. Ethos has raised over $40 million in venture capital this year from a combination of veteran Silicon Valley investors and celebrities like NBA champion Kevin Durant and Jay-Z. 

Key Quotes:

"Almost all insurance agents in America are individually commission based. Meaning, they profit when they sell you a policy, and the larger the policy they sell, the more profit they receive. And this is what we've always found is a bad misalignment center. And so none of our individual agents are commissioned and are compensated in any way to sell a life insurance policy."

"As far as these big brand celebrities and influencers who we were able to get to join, I think there was something common in that they all understood the issue we were trying to solve, which is that every year less people in America buy life insurance. Which is a problem because it's intrinsically good. Less and less families are getting coverage. So 20 years ago roughly 77% of families who could afford and should have life insurance had it. Today that's down to 60%."

And so when Lingke, my co-founder and current partner, was 20 years old he was sold a permanent life insurance policy by an alumni, this college agent. He aggressively convinced him to purchase a policy that he had no legitimate need for life insurance. Rarely does a 20 year old without a family have a need for life insurance. Especially permanent life insurance. He was in the process of lapsing this policy when we were in business school together. And we did a lot of research and figured out that his predicament was not unique. When you lapse a policy you lose a lot of what you paid into it."



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