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Lemonade LIfe INsurance Review - Pros & Cons - Frequently Asked Questions

Reviewed by:  Chris Lalor | Last Modified: 03/05/2021

Overview:  Lemonade Life Insurance, which recently partnered with Bestow Life, just started offering term life insurance in 2021.  Using  Bestow's Protect API, Lemonade customers can apply for instant, affordable life insurance in as little as five minutes online — all within Lemonade's website and apps.  Using AI technology and chatbots, Lemonade offers a completely online experience and lightning fast claims processing through its mobile app.  

Here’s What You Need to Know About Lemonade Life Insurance

There is no shortage of term life insurance carriers available in the United States. It can be hard to choose which company is the best for your health, lifestyle, and financial needs.   This review discusses Lemonade Inc.’s brand new offering of  life insurance policies.

Lemonade uses chatbots to reduce the quoting and application process and provide instant approval to those who qualify.  Choose from a 10- or 20-year term life insurance policy with a maximum coverage amount up to $1 million.

  • pros & cons

  • insurance types

  • who is a good fit?

pros & cons of Lemonade life insurance

Pros

  • Fast quote and application process: Lemonade uses a chatbot to walk you through the quoting and application process.  It estimates you should be able to complete the application in about five minutes using the website or app.
  • Affordable rates: Lemonade’s life insurance rates start at $9 per month and are based on your age, coverage and term limit, and how healthy you are.
  • No medical exam: Lemonade is another life insurance provider offering affordable term life insurance rates without the need for a medical exam. Instead, it uses artificial intelligence to review underwriting data based on your application answers to determine if you qualify for coverage.
  • No sales agents: Are you weary of entering your information because you don’t want to deal with predatory sales tactics? Lemonade doesn’t use sales agents, using chatbots and smartphone technology instead.  Submit your application and claims online or through the app, snap photos or take videos with your phone, and get a response in as soon as a few minutes.
  • Giveback program: As a crowdfunded insurance company, Lemonade doesn’t keep the profits after claims and fees are paid.  Instead, it gives the customers options to choose a charity to support as part of its Giveback program.

Cons

  • Only term life offered: If you’re looking for anything other than term life coverage, you won’t find it at Lemonade.  You can choose from the 10- or 20-year term life insurance policy with maximum coverage up to $1 million.
  • No life insurance riders are available.
  • App-based claim handling: For anyone still resisting a smartphone, you’ll have trouble getting claims paid with Lemonade.  Since life insurance is brand new, we’re not sure how the claims process will work for life insurance compared to other Lemonade insurance products.
  • Not available in all states: Lemonade only offers insurance products in 28 states, though it is working to rollout to all 50 states in the future.
  • Not everyone qualifies: Lemonade’s ideal life insurance client is between the ages of 21 and 55 in great health.  If you have cancer, diabetes or heart issues, you might not qualify for coverage.
  • Extremely high complaint index: The NAIC complaint index is 1.0, yet Lemonade’s is extremely high at 6.52 showing it gets much higher than expected complaints compared to other insurance companies.

How is Lemonade Life Insurance Different?

Like Bestow and other AI-driven companies, Lemonade uses chatbots to handle claims and deliver insurance policies through desktop and mobile apps. 

Lemonade also uses a unique business model where most of the premiums are used to pay for claims and buy reinsurance.  Anything left gets donated to nonprofits of the insured’s choice in an annual “Giveback” event.

With journalists making claims like “insurance will never be the same again!” and “New York startup shakes up the insurance business,” it will be interesting to see if and how the insurance industry changes course as tech-based companies continue to pave new paths in the market.

What types of insurance can you purchase from Lemonade Life Insurance?

Life Insurance Products Offered through Lemonade Life Insurance:

Lemonade currently offers 10- and 20-year term life insurance policies with coverage limits up to $1 million.

Did you know?

Insurance companies are NOT all the same.  Some are more lenient on certain health issues, some focus on a no-hassle application without an exam, some are financially stronger than others, and their pricing varies a LOT!  Get 2 to 3 quotes for best results!

We Recommend:

WHAT POLICIES DOES Lemonade LIFE Insurance OFFER?

In the United States, Lemonade offers renters insurance, homeowners, condo, and pet insurance products.  Life insurance was introduced in 2021.

a brief history of Lemonade Life Insurance

Lemonade was founded in 2015 in New York City by co-founders Daniel Schreiber, Shai Wininger, and Ty Sagalow. The company began offering renters, homeowners, condo, and pet insurance for consumers in the United States. 

The company was created as a socially-driven Public Benefit Corporation on a mission to give back to nonprofits.  The business model uses chatbots and technology to reduce operating and underwriting costs so underwriting profits can be used for philanthropy.

Lemonade’s business model is set up so the company keeps 25% of customer premiums while the remaining 75% is used to pay claims and purchase reinsurance. 

In 2020, Lemonade had more than 1 million active insurance customers. Lemonade Inc. became active on the NYSE as of July 1, 2020. In 2021, Lemonade started offering 10- and 20-year term life insurance policies.

Americans are terrible at this one thing...

recent study found that more than half of Americans overestimate the cost of term life insurance by three times.  If you've never gotten a personalized quote or only seen quotes from one company, you likely have no idea how inexpensive life insurance really is!

Lemonade Life Insurance Products

Lemonade only offers term life insurance, with coverage in place for 10 or 20 years.  You can get coverage up to $1 million without having to take a medical exam.  Like some other insurtech insurance companies, Lemonade uses the power of artificial intelligence to offer affordable term life insurance in about five minutes.

Lemonade Life Insurance coverage details and guidelines

Read on to find out who issues Lemonade Life's policies, how to get an online quote, and how to get a low rate.

Who Issues Their Policies?

Lemonade Life Insurance Agency is a sub-producer of Bestow Agency, LLC.  Life insurance quotes provided by Bestow,  who is the licensed agent. Lemonade Term Life Insurance Policies offered by Bestow are issued by North American Company for Life and Health Insurance.  

How Do I Get An Online Quote Through Lemonade Insurance?

Lemonade has a “Check our prices” button on the homepage.  Click there and you’ll be guided through the quote process, which also serves as part of the application.  After answering some questions, you’ll get a rate if you qualify for term life insurance coverage.

How do I get a low rate?

The best way to get a low rate with Lemonade is to be in great health with no outstanding medical issues.  Lemonade is new to life insurance, so their guidelines may be stricter than other term life insurance providers.

Find Your Perfect Life Insurance Plan!

Click below to search for life insurance by company, coverage amount, and policy type.

Shortcut:  Our #1 choice for life insurance with health issues is AIG Direct.  If you have any history of heart disease, diabetes, cancer, stroke, or obesity, click here for a free quote.

WHO is Lemonade Life Insurance for?

To get coverage with Lemonade Life Insurance, applicants should be in good or better health.  Lemonade may not offer coverage to someone with a history of cancer, diabetes, or heart disease.

Who is the ideal Lemonade life Insurance applicant?

According to Lemonade’s website, people between 21 and 55 years old who are generally healthy are encouraged to apply.

what if i'm not perfectly healthy?

It is unlikely you will be approved by the Lemonade Life Insurance algorithm if you are not in perfect health.  Even with mild "health conditions" you may be told you do not qualify.

 So if you are not perfect health, or not the ideal Lemonade Life Insurance applicant, let us help you get quotes from multiple carriers that are more suited to your health profile.

Our Favorite Life Insurance Companies

We've worked with and reviewed dozens of companies.  Here are our faves.

Ladder Life Insurance Logo

Ladder Life Insurance

Best for:  No-Exam Plans Up to Age 60

Ladder is known for a quick and easy online application with no medical exam required in many cases.  They have 10, 20, and 30 year plans.  They offer the most coverage without an exam in the industry. Coverage amounts start at $100,000 and go as high as $8 million.

AIG Direct Life Insurance Logo

AIG Direct

Best for:  Lowest Rates or Health Conditions

AIG Direct offers a range of custom term plans up to 35-year term as well as return of premium, and permanent plans that build guaranteed cash value.  Their rates will beat just about anyone if you take an exam.  They're also terrific if you take medication or have health issues.

Bestow Life Insurance

Best for:  Convenient and Simple Plans

Bestow is known for their simple, straight-forward 10, 15, 20, 25 and 30 year term plans up to $1.5 million.  They never require a medical exam (ever) and have great rates.  Rates start as low as $8 per month.

how to apply for life insurance with Lemonade Life?

Apply for life insurance with Lemonade online.  The company uses a bot called Maya to walk you through the application process to provide a quote for coverage.

signing up for Lemonade life Insurance

It’s easy to sign up for Lemonade term life insurance on its website.  Click on “check our prices” to be taken to the application process to get a quote.  If you like the rate, you can move forward with the rest of the application process.

how does the application process with Lemonade life Insurance work?

On the Lemonade website, click on “Check our prices” and enter your personal information.  Maya will lead you through a series of questions to answer about your activities, past and present health, and future travel plans.  If you qualify, you’ll be provided with a rate and an option to complete the rest of the application to submit for coverage.

Lemonade life financial strength and bbb ratings

One way to determine which insurance carrier to choose is to look at their financial strength and ratings.  Lemonade Inc. does not have an A.M. Best rating.  They also are not listed on Standard & Poor’s or Moody’s. 

Lemonade is not accredited by the Better Business Bureau and has a B+ rating.  With few financial ratings to go off, Lemonade Inc. may not be the best choice when looking for confirmation it can afford to pay out large claims, especially for life insurance coverage.

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Lemonade Life Insurance reviews and complaints

Lemonade has had 103 complaints filed with the BBB in the last 3 years, with 44 resolved in the last 12 months. Customer reviews give it 4.3 stars. 

After 29 reviews on Trustpilot, Lemonade Life Insurance Reviews show they have 2.4 stars and it is rated with 3.2 stars on Consumer Affairs. Yet, Lemonade has 4.9 stars after 15 reviews on Consumers Advocate.

Most surprisingly is Lemonade’s extremely high complaint index with the National Association of Insurance Commissioners. The average index with NAIC is 1, but Lemonade’s complaint index is 6.52, which means the company’s complaints are more than six times higher than expected for this market.

Consumer Affairs has 135 ratings for Lemonade Life Insurance Reviews with an overall satisfaction rate of 1.5 out of 5 stars. Most complaints are about the paperwork needed and time for claims to be paid and the frustration with trying to cancel policies.

Compare Lemonade Life Insurance VS New York Life Insurance

New York Life offers term, whole life, universal life, and variable universal life insurance policies compared to Lemonade’s term life.  With New York Life, you can only get a quote and apply through a licensed representative. Lemonade offers quotes in minutes through the website or mobile app.

All New York Life’s life insurance policies are medically underwritten, which can provide better rates for people in great health.  Lemonade offers competitively priced term life insurance products without a medical exam, which may or may not be the best deal for someone without health issues.

How to Compare Companies:

Life insurance companies vary widely in price and policy features they offer.  The smartest move is to get quotes from two or three companies and compare the pros & cons of each.

Lemonade Life Insurance Alternatives

Many of the following companies have better products and cheaper prices versus Lemonade Life Insurance.  Some even offer no medical exam policies.

aaa life insurance company, aaa life insurance rates, aaa life insurance review

AAA Life Insurance Review

Term, whole & universal life insurance are three types of life insurance products offered through AAA Life.

AIG_Direct

AIG Direct Life Insurance Review

AIG Direct offers online quotes, works with healthy people (plus people in less-than-perfect health), and provides options for coverage you may not find elsewhere.

Banner Life logo

Banner Life Insurance Review

Banner Life Insurance company is part of Legal & General Group, a London-based multinational financial services company founded in 1836.  Banner likes to keep their life insurance offerings simple with just term and universal life insurance. 

Bestow Life Insurance Review

Bestow Insurance offers term life insurance for people between the ages of 18 and 60, and in generally good health.  You can get coverage online in about 10 minutes starting at $10 a month.

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CMFG Life Insurance Review

CMFG, through CUNA Mutual Group, uses its TruStage brand to sell life insurance to the public and credit union members. 

Colonial Life Insurance - Helping America's Workers with Financial Protection Since 1939

Colonial Life Insurance Review

Colonial Life has one of the oldest reputations in the supplemental benefits industry. They offer life, accident, and illness policies to complement your health insurance plan.

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Ethos Life Insurance Review

Ethos is not a life insurance company.  They are a licensed producer and third party administrator.  Founded in 2017, Ethos has developed an online platform that allows you to apply for life insurance and possibly get instant approval. 

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Fabric Life Insurance Review

Fabric Life offers affordable life insurance with easy, online quotes and application available 24/7.  The company uses algorithms to speed up the underwriting process, with well-qualified applicants getting approved without a medical exam.

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Geico Life Insurance Review

GEICO offers life insurance products through its partner, LifeQuotes.com.  LifeQuotes.com provides access to dozens of life insurance carriers which makes it easy to get a quote for term, universal or whole life insurance. 

Haven Life Insurance Review

Haven Life Insurance Review

Haven Life Insurance Agency, LLC, is a wholly-owned subsidiary of MassMutual and offers an easy and fast online quoting and application process for term life insurance. 

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Health IQ Life Insurance Review

Health IQ rewards healthy lifestyle choices by offering lower rates for people who take care of their health. 

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Ladder Life Insurance Review

Ladder has developed an online platform that allows you to apply for life insurance and possibly get instant approval.  They have teamed up with Fidelity Security Life in 49 states and in New York with Allianz Life Insurance Company of New York.

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Leap Life Insurance Review

Leap LIfe uses artificial intelligence (Policy Matching AI) technology to compare your health, habits, and hobbies against life insurance company underwriting guidelines in order to match you with the best possible policy from a company that they represent.

MATRIXDIRECT LIFE INSURANCE LOGO

Matrix Direct Life Insurance Review

Matrix Direct Life Insurance, now AIG Direct, is a life insurance company offering coverage through American General Life Insurance and The United States Life Insurance Company in the City of New York.  Most policies require a medical exam, but certain term and whole life products can be purchased without one.

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Mutual of Omaha Life Insurance Review

Mutual of Omaha Living Promise Whole Life Insurance has both level and graded benefit plans. Underwriting is simplified issued –  and does not require a medical exam.

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Nerdwallet Life Insurance Review

When you request a quote from Nerdwallet Life Insurance you will be redirected to another website called Quotacy.  Quotacy is backed by Hallett Financial Group, Inc.  Hallett Financial Group, Inc is a full service multi-carrier independent insurance brokerage agency.

Pacific Life Insurance Company Logo

Pacific Life Insurance Review

Pacific Life is very competitive in the term life insurance and the guaranteed universal life insurance market.  Most of the time in the Top 3 when compared to other leading carriers in the life insurance market.

Protective Life Insurance Logo

Protective Life Insurance Review

Protective Life's vast number of products which offer some of the most competitive prices in the market is what sets them apart from the competition.  For example, they have a competitively priced 35 and 40 year level term that most companies don't offer.

Prudential Life Insurance Logo

Prudential Life Insurance Review

Prudential Life Insurance is one of the largest life insurance companies in the US.  They offer term life and universal life insurance policies that let you add extra features to customize your coverage.

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Sagicor Life Insurance Review

Sagicor is a full-service life insurance company, offering term, whole life, and universal life through SagicorNow Accelewriting no medical exam underwriting for qualified applicants.

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 SelectQuote Life Insurance Review

Since 1985, SelectQuote has saturated the advertising market with multiple TV, radio, & print adds per day.  This is the reason they are the #1 direct to consumer insurance agency.  BUT....

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Transamerica Life Insurance Review

Transamerica Life Insurance Company is a leader in the life insurance industry.  They offer a variety of competitively priced life insurance products and riders so you can customize your policy

TruStage Term and Whole Life Insurance Review

TruStage Life Insurance Review

TruStage is convenient and is a solid company, but is a lot more expensive compared to other online life insurance providers, limits coverage to $100,000, and only offers 5-year terms.

For more company information, please visit our Life Insurance Company Reviews Page.   If you’re searching for life insurance by term length or dollar amount, please visit this page

Frequently Asked Questions

1. How does Lemonade term life insurance work? - Applying for term life at Lemonade is quick, easy, and fully digital.  You’ll get your application results in minutes, and Lemonade will never ask you to get a medical exam or a lab test. You just need to answer some basic questions about your health and your beneficiaries and they will do the rest.

2. Is Lemonade term life insurance any different? -  Unlike other term life carriers,  you won’t need to see an agent or doctor before getting your quote.  The process is 100% digital, and takes minutes (not weeks) to apply.  

3. How do I apply for life insurance coverage? - Anyone between 21 and 55 years of age can apply.  However, it’s important to note that Lemonade's term life is designed for generally healthy people who have no history of heart disease, cancer, other life-threatening conditions, or a habit of engaging in high-risk activities, including drug or alcohol abuse, or participating in dangerous sports.

4. What happens if I get declined? -  Sadly, not everyone can be approved for a term life policy - whether that’s due to your health background or lifestyle factors.

5. What types of life insurance does Lemonade offer? - Term life insurance.  You can apply for a policy that lasts for either 10 or 20 years, with up to $1 million of coverage to help protect your family in the event that you pass.

6. How come no medical exam is required when I apply? -  Lemonade asks questions about your lifestyle and health which provides a sufficient picture of your medical profile to determine if you’re a good fit for the coverages they offer.

7. What happens when my term life insurance policy expires? - Your policy will simply expire and you will have to reapply if you want or need another policy.

8. Can I cancel my policy at any time with out penalty? - Yes.  There is never any charge for canceling your policy.  Lemonade  even offers a 30-day free look period, so you'll get a full refund of your first month's premium if you cancel within the first 30 days.

9. How much does term life insurance cost at Lemonade? - Policies may start as low as at $9/mo, though your customized premium depends on several factors, including how much coverage you get (and for how long), as well as your age, lifestyle, health background, and location.

10. Does my premium ever increase? - No.  Whether you choose a 10 or 20 year term, your premium is locked in for the entire period.

11. How safe is my personal information when I apply? -  Lemonade will never sell your information to any third party.  Note that they may need to transfer information to their partners and providers, solely for the purposes of regulatory and financial audits; running their service and resolving an incident; or obtaining a term life policy and settling claim benefits.

12. Why do I have to provide my Social Security number when I apply? - In order to verify your identity, Lemonade is required to ask for your SSN and validate it.  This helps prevent fraud and the creation of fake accounts.  Lemonade takes data protection very seriously, and use secure encryption technology to safeguard your personal information. They also comply with, and even exceed, the most stringent data and privacy protection regulations.

13. What is life expectancy? Life expectancy is the statistical expectation of how long someone will live at birth based on a number of factors such as socioeconomics, demographic, geographic, thermographic, stenographic, idiographic, and historiographics.

summary

Lemonade Inc. just started offering term life insurance policies in the beginning of 2021 by partnering with Bestow. Coverage is capped at $1 million and you can choose from a 10- or 20-year term policy.  Lemonade doesn’t have financial ratings with Standard & Poor’s, Moody’s or A.M. Best, which can show how dependable they are at paying out claims.  Lemonade also has mixed customer reviews, with an extremely high complaint index with the NAIC. People between the ages of 21 and 55 in great health will get the best rates with Lemonade life insurance. Those with health issues may not qualify for coverage.

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Written by:  Chris Lalor

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