My husband and I purchased 20-year term life insurance policies several years ago. We had just welcomed our second son–and lost my father–the year before.
Prior to my father’s death, my husband and I only carried the life insurance we were able to get through his workplace. His policy would replace one year’s worth of his income, and the small spousal policy that I carried would pay out $15,000. But we both realized this wasn’t enough after Dad died.
That’s because there’s more to life insurance than just income replacement. Having a policy in place allows your family the financial cushion they need to grieve. So we sought out private life insurance. Buying those policies helped ensure that our little family would be okay if something happened to either one of us.
The fact is that everyone should be thinking more about life insurance. But even though we may intellectually recognize the need for life insurance, it’s human nature to avoid thinking about death. That helps explain why 40% of Americans have no life insurance and why 20% of those who are insured feel like they don’t have enough.
Thankfully, life insurance fintech makes the unpleasant task of considering one’s mortality much easier. You no longer have to meet in person with an insurance agent to get the coverage you need. Instead, you can spend a little time online to get your life insurance in order.
New online life insurance provider Fabric makes getting life insurance quick and easy. Fabric allows you to apply for term life insurance in minutes (they also provide accidental death insurance.) It also provides a free will-writing service, and a free “vault” service to house your important financial information.
Read our Fabric life insurance review to learn how you can get the insurance coverage and estate plan you need:
What is Fabric?
Fabric launched in 2017 and is one of the newest entrants to the life insurance fintech sphere. Founders Adam Erlebacher and Steven Surgnier are young fathers who wanted to help other new parents navigate the complexities of life insurance. They decided to create Fabric to make life insurance easier to purchase, especially for harried young parents.
The website is set up with a beautiful and intuitive user interface, and the customer service team of agents have been lauded for providing quick, professional service to customers who need additional advice.
Fabric has two life insurance options: Fabric Premium and Fabric Instant. Premium is term life insurance and Instant is accidental death insurance.
In addition to its life insurance offerings, Fabric also has two great free tools for estate planning: Fabric Wills and Fabric Vault.
- Premium: Term Life Insurance
- Instant: Accidental Death Insurance
- Wills: Free Will Writing
- Vault: Free Financial Account Organization
Offered in terms of 10, 15, and 20 years, Fabric Premium policies are available for $100,000 to $5 million in coverage, with increments of $50,000.
Fabric Premium is available in all states except Montana, but California and New York residents must buy Fabric Instant before upgrading to Premium. Once you upgrade, your Instant is automatically canceled. (It’s good to note that anyone with an Instant policy can potentially upgrade to a Premium policy, not just Californians and New Yorkers.)
The application process takes less than 10 minutes. The form asks questions about your lifestyle, hobbies, and health.
Unlike the Instant application, you will not necessarily be done once you have provided all your information. You may also have to take a health exam before qualifying for a policy. This depends in part on your health background and in part on what state you live in. (Some states require all term life insurance policy applicants to undergo a medical exam).
If you do need to take an exam, you can schedule a time on the Fabric website, and a paramedical professional will visit your home or workplace to conduct the quick exam. It will generally take about five to seven business days for Fabric to receive the results of your exam, and another two to three business days for Fabric to make a decision on your policy.
The cost of your Fabric Premium policy will depend a great deal on your age, gender, lifestyle, and health.
Since your Fabric Premium policy is through Vantis Life, you also have the option of converting your term policy into a whole life policy during the term without having to take another medical exam. You can purchase Premium term life insurance in all 50 states, except Montana.
Gaps in Fabric Premium
By definition, life insurance offers more coverage than accidental death insurance. That means Fabric Premium will provide a payout if you die during your coverage period, no matter how you kick the bucket.
However, there are still a couple of important coverage exclusions to bear in mind.
The first is an exclusion for suicide within two years of the issue date of your policy. The second exclusion is for misrepresentation on your application.
For instance, if you claim that you have never used tobacco even though you have a pack-a-day habit, your family cannot expect a payout if emphysema claims your life.
The only other “gap” with Fabric Premium is the fact that you cannot currently increase your policy’s value without submitting a new application. If you realize the $250,000 policy you purchased was insufficient, you will need to fill out a new application and potentially undergo another health exam in order to increase your policy’s value.
However, you can decrease your coverage at any point without having to go through underwriting a second time.
According to a 2016 CDC report, accidental death is the largest single fatality risk to 25-44 year old Americans. This makes accidental death insurance a natural fit for healthy young adults with no life insurance. Accidental death insurance works like life insurance, except that it pays out if you die due to an accident (like getting hit by the proverbial bus), but not due to illness.
This policy is an affordable accidental death policy for anyone between the ages of 25 and 50. Fabric has no medical exam requirement for their Instant policies, and they guarantee coverage. To apply, you only need a few minutes to provide some information. Specifically, Fabric will ask for:
- Cell phone number
- Social Security number
- Date of birth
- Payment information (and you can pay with a credit card)
- Beneficiary name and information
Since you are guaranteed coverage and Fabric offers instant acceptance, you will be covered as soon as you are done with the online form. You could theoretically die in an accident later the same day, and your beneficiary will receive the full death benefit payout.
There is no specific term for Fabric Instant. Your policy is renewed monthly, which means that you will have continued coverage as long as you keep paying your premiums. While you must be between the ages of 25 and 50 to qualify for Fabric Instant, you may continue to extend your Instant policy until you hit your 60th birthday.
Fabric Instant is available in all states except for Colorado, Massachusetts, Montana, North Dakota, Pennsylvania, Virginia, and Washington.
Fabric Instant Pricing
Accidental death insurance already tends to be less expensive than term life insurance, since most people die of natural causes (despite what you might think after watching 24-hour news). That said, Fabric offers very competitive rates for its Instant policy:
|Cost in most states
|Cost in New Jersey and Oklahoma
|$6 per month
|$6.50 per month
|$15 per month
|$16.25 per month
|$30 per month
|$32.50 per month
Coverage Gaps in Fabric Instant
Fabric Instant is an excellent economical choice for anyone who needs coverage. However, it’s important to remember what this kind of coverage can and cannot do.
To begin with, this coverage will not make a payout if you die of illness-related or other natural causes. There are also several other exclusions (which can vary depending on your state of residence) that will limit payouts. The exclusions for my home state of Wisconsin include:
- Injury incurred before purchasing coverage (for instance, if you had a head injury several years ago that leads to your death in the future, Fabric Instant will not cover it)
- Committing a crime
- Rioting (On purpose, that is. If you are just trying to defend public or private property, or are working to restore order in an official capacity, then you’re covered).
- War and active duty armed services
- Intoxication or controlled substances
- Racing or attempting to make some sort of speed record
- Extreme sports
- Driving a vehicle that is not designed for streets (like ATVs)
- Professional sports
These are the sorts of exclusions you can expect from all accidental death policies. However, you should note that this accidental death policy also does not cover dismemberment. Most policies are “accidental death and dismemberment,” meaning you will get a payout if you are seriously hurt or maimed in an accident.
Fabric’s policy only insures against accidental death, so if you were to lose a limb or become paralyzed because of an accident your Fabric Instant policy does not offer a payout.
Of course, life insurance is only one part of protecting your family. You also need to have a will in place to help ensure that your family is well taken care of if something were to happen to you. But nearly 60% of American adults have not written a will, which leaves their families vulnerable.
Specifically, writing a will allows you to appoint a guardian for your minor children, choose the executor for your estate, and decide who receives your possessions and financial assets. Without a will in place, the court system may end up making these decisions for you.
Many young parents put off writing their wills. At an average cost of $300 to $1,000 to draft a will, the price can make it easy to procrastinate. And the time commitment and complexity of writing a will can also make it difficult to take care of this important task.
See Also: 9 Critical Reasons You Need a Will
Fabric Wills eliminates both of these common excuses for not having a will. The website helps you create a free will by walking you through a simple questionnaire.
How Fabric Wills Works
The questionnaire starts by asking about your dependents, your debts, and your assets. From there, Fabric recommends whether you would benefit from a will or life insurance or both.
Then it’s time to get down to the business of drafting your will. The site asks for the names of your children and spouse and how you would prefer to bequeath your estate within your family.
You’re also given the option of creating a will for your spouse at the same time. This is a big help, as it means you won’t have to do twice the work to create a nearly identical will.
From there, you begin to answer questions about your chosen guardian for your children, as well as executor for your estate. Fabric also gives you the chance to name a back-up guardian and executor, in case your first choice is unable to step up.
You have the option to email the will to your chosen guardian(s) and executor(s). This is not required, but Fabric recommends doing so. Your chosen agents will be better able to help your family after you are gone if they know what to expect. Sharing the will with them, and having a conversation about your choices, will help them to help you.
Once you have completed the will-making questionnaire, Fabric asks you to name two witnesses. The site will email your chosen witnesses, and outlines the steps you need to take to make the will legally binding.
Fabric Wills as a Conversation Starter
I already had a will in place prior to logging onto Fabric. However, their questionnaire made me realize that my husband and I are not as prepared as we thought. The will questionnaire asks about your preferences for final arrangements. This is something I’ve never discussed with family, and it is something we need to talk about.
Fabric Wills makes for an excellent conversation starter. These kinds of discussions can be uncomfortable and difficult to broach. Even if you are comfortable discussing your final arrangements with your spouse, you may feel weird about talking to your chosen guardian or executor about their role in your estate plan.
This is why Fabric Messages feature is such an important part of the wills program. This feature gives you examples for how to begin the tough conversations with your loved ones, with both casual and formal options so you can find the approach that feels right for you.
The sample conversations also help you to explain the designated roles of guardian and executor. You can help them understand, in simple language, what will be expected if they need to step into those roles.
Fabric seems to truly understand all the emotional and administrative barriers that keep people from writing their wills. They have made sure to lower those barriers as much as possible.
The fact that they offer this for free is truly incredible.
The most recent addition to Fabric’s offerings is the Vault. This program allows you to store all of your financial information securely in one place. Rather than filling out a paper list of all of your banking, investment, life insurance, mortgage, and retirement account information, you can link your information to Fabric Vault.
I have personal experience in how important this is. In 2012, my mother was placed in a medically-induced coma after coming down with pneumonia. My stepfather did not know how to find any of her financial information, and Mom’s finances quickly become chaotic while she was sleeping. It took her quite some time to fix everything and regain her old credit score after she recovered.
But even though I have seen the fallout that occurs if your financial information isn’t accessible, I still have not completed an In Case of Emergency binder in the seven years since Mom’s illness. It’s such an overwhelming job that I always put off.
Fabric Vault has made it simple, however.
How Fabric Vault Works
To create your Vault, you begin by linking to your financial accounts.
Fabric uses the banking data API Plaid to securely connect to financial institutions. This means you have 265-bit encryption to protect the transmission and storage of your sensitive information.
All the heavy hitters in the financial industry are available with the click of a button. I was able to link to both my checking account and the bank that holds my mortgage right from the link page. (However, I was not able to connect to a regional bank that I use for another checking account, even with the search feature.)
Once you have linked all of your financial institutions, you can share your Vault with your spouse. With a single login to Fabric Vault, your spouse will know what accounts you have.
Specifically, your spouse will be able to see your Vault dashboard. This lists your accounts by institution, but encrypts all but the last four digits of the account number. It also shows how much money is in your account. Sharing the vault with your spouse will not give them access to your login credentials.
That means that in case of an emergency, your spouse will know what institutions to contact and how much money is in each account. But your money is protected in case anyone else were to gain access to your Vault.
Should You Use Fabric?
Fabrics founders want to make life insurance and estate planning easier, especially for young parents. That means their life insurance options are affordable, and the entire user experience is both easy and (dare I say?) fun. You truly can take care of all of your basic estate planning needs–from life insurance coverage, to drafting a will, to sharing your financial information with your spouse–in about an hour.
Fabric’s life insurance offerings are not necessarily going to be right for everyone. Also, anyone with a particularly complicated financial situation may not find Fabric Wills or Fabric Vault to be the right fit.
But for the majority of young adults who lack any kind of life insurance or estate plan, Fabric is an excellent option that takes a minimum of money and time. That really is a no-brainer.
Have you bought Fabric life insurance? Have you used their free Wills or Vault features? Tell us about it in the comments!