Whichever way the market swings, when it comes to securing a life insurance policy, you want to know it’ll protect your family no matter what.
That’s the whole point of life insurance. And that’s why insurers have long been cautious when investing your money.
But a survey from NYDIG (New York Digital Investment Group), a technology and financial services firm dedicated to Bitcoin, shows a growing interest from life insurance policyholders in having their insurers catch up to investing trends like Bitcoin.
Here’s what you need to know about Bitcoin life insurance and whether it’s the solution for your insurance needs.
What is Bitcoin life insurance?
When you sign up for life insurance, you agree to pay your insurer a monthly premium in exchange for a payout upon your death (as long as the policy is still active).
Every month, the insurer collects its clients’ premiums. Because they don’t anticipate having to pay out all of their death benefits right away, the companies then invest that sum in stocks, bonds and other profitable vehicles.
The money the insurance company takes in and invests is known as its float. Usually, insurance companies prefer investing in safe places because massive losses would be catastrophic if the insurer becomes unable to pay out claims.
However, some insurers have started wading into investments that are perceived as higher risk. With Bitcoin life insurance, that means your insurer has put some of their float towards investing in the cryptocurrency.
Last December, 170-year-old insurance provider Massachusetts Mutual Life Insurance Co. invested $100 million in Bitcoin for its general investment fund. MassMutual also invested $5 million in NYDIG to provide custody services for the company’s bitcoins.
It may sound like a lot, but the investment represented less than half a percent of the company’s float money.
Other large companies like Soros Fund Management, New York Life and Morgan Stanley have recently followed suit in investing in NYDIG to collaborate on Bitcoin-related investments.
What’s the appeal?
More than 46 million Americans already own Bitcoin, based on the findings from a previous NYDIG survey.
And of those who already own a life insurance policy, half also own digital assets like Bitcoin, NYDIG found.
Part of the reason is that it’s easier than ever to invest in crypto assets: Many popular investing apps allow you to easily trade Bitcoin.
While the currency has powerful detractors, like Warren Buffett — who has referred to Bitcoin as “a delusion” and “rat poison” and told CNBC in 2018 he would never own any cryptocurrency — there’s no denying its popularity.
And although its value has fallen lately, as of May 17, one bitcoin was worth just over $44,000.
While investors like Buffett once anticipated interest in cryptocurrency would have faded by now, while volatile, it still bounces back from every downfall.
And despite recent comments that caused its stocks to fall, on May 17, Elon Musk, Tesla’s outspoken boss, tweeted his company hadn’t sold off any of its Bitcoin.
Based on NYDIG’s findings, about 75% of life insurance clients are at least slightly interested in learning more about Bitcoin-associated annuities and life insurance.
And over half of respondents would like to receive some or all of their payouts in Bitcoin.
How to find the right life insurance for you
Whether you want your provider to invest in Bitcoin or not, finding the right life insurance policy has long seemed more complicated than figuring out how cryptocurrency works.
But now, with some cutting-edge technology, you can cut through the complications to instantly get the term life insurance coverage you need at a price you can afford.
Experts like the Insurance Information Institute will recommend that you review at least three quotes before settling on an offer.
While that used to require doing a ton of legwork and research, now it’s as simple as answering a few questions online to get all the quotes you qualify for presented to you immediately. And you often won’t have to subject yourself to a medical exam or intrusive questions and blood draws to get coverage.
What about my other financial priorities?
We know life insurance is a growing concern after 15 months of a global health crisis, but it’s not your only priority. So now that you’ve got your life insurance squared away, you may want to think about your other insurance policies.
With your safety net secured, if you’re still thinking about cryptocurrency, why not download a commission-free investing app that will allow you to trade in Bitcoin? That way you can dip your toe in crypto even if your insurance provider doesn’t.
Or maybe if you’re wary of too much — or too much tech — you can put your money in what is arguably the most reliable and profitable investment around: U.S. farmland.
At the end of the day, whether or not you’re comfortable investing in Bitcoin directly, you can leverage these digital developments to ensure you’re getting the best rates on all your products and the highest returns on your investments.
Now, who would say that solution doesn’t suit them?