How embedded micro insurance can help close the coverage gap

Wysh, a life insurance provider, and fintech Helix by Q2, introduced a new partnership and approach to closing the life insurance coverage gap. The companies are offering an embedded finance solution, a high-yield savings account through Helix, bundled with a no-cost life insurance policy with Wysh. This embedded micro life insurance product, called Savings+, is one of the industry’s firsts and aims to help reach underprivileged Americans who are either underinsured or completely uninsured due to financial difficulties and lack of accessibility.

Alexander Matjanec, founder of Wysh, describes their approach to embedded insurance as one of providing a simpler experience for the customer.

“Most research shows that people think [buying life insurance] is cumbersome and more expensive than it is. I think that digital insurance and digitizing the transparencies really eliminates, for example, in many instances the need to have a doctor have blood drawn. There’s a number of avenues including us that allow you to avoid that,” said Matjanec.

According to data from LIMRA’s 2023 Insurance Barometer Study, 52% of Americans own a life insurance policy, and 41% of both insured and uninsured individuals say they don’t have sufficient coverage. Younger generations are less likely to have coverage, with just 40% of Gen Z adults and 48% of Millennials reporting that they have life insurance – and almost half, 49% of Gen Z and 47% of Millennials, say that they need to obtain protection or increase their life insurance coverage.

Research from Insuranks reveals that 26% of Millennials have trouble affording their insurance, and 28% of Millennials who don’t own a life insurance policy believe that they don’t need one. Some of the top reasons that Millennials will not buy life insurance include that 66% say it is too expensive, while 29% say that they are too overwhelmed by the complexity of purchasing coverage.

Ahon Sarkar, general manager of Helix, described embedded micro life insurance as an opportunity to provide insurance protection to low-income or underinsured individuals through other contextual experiences and help them take their first few steps towards getting insurance.

“How do you help people both start saving…then, at the same time, help them get access to life insurance and start taking steps towards that type of protection that they may otherwise not get from themselves? This is a perfect example of embedded micro insurance, where you give insurance as a benefit inside of the context of a broader experience. The really exciting thing about what we’re doing here is it’s not an ‘either or…’ Wysh managed to give you a better savings rate than you can get somewhere else, and they managed to give you free micro life insurance as part of it.”

Matjanec added, “What is unique about micro insurance and what we’re doing is that it is proactive embedded insurance, because the consumer must continuously make smarter banking decisions, and the insurance grows with them as they do that. As you build your savings, you’re building your protection value along with it.”

Wysh’s embedded micro life insurance feature is also offered to other institutions, aiming to increase accessibility, affordability and awareness of life insurance protection for the underinsured.