eHealth Enters the Online Life Insurance Space

The underdeveloped online life insurance market just got a shot in the arm. Mountain View, Calif.-based eHealth -- most widely known for its eHealthInsurance Web site -- announced in late January that it entered the online life insurance market with the launch of eLifeInsurance.com.

Chris Hakim, eHealth's director of new business development, says the company believes that life insurance is a natural fit for cross-sell opportunities on eHealthInsurance.com. "We feel that this is a perfect cross market for us to be in, based on how many consumers are already working with ... us for their health insurance," he relates. "We feel this a great adjunct product that people would be interested in."

In addition, eHealth believes that the online insurance market is currently underserved, Hakim adds. "We do see a void in the marketplace from an online life insurance perspective," he says.

That said, eHealth is not the first to enable consumers to comparison shop for life insurance online, as they are preceded in the space by players such as Reliaquote.com, Insure.com and Accuquote.com. Already a brand name in the online individual health insurance space, though, eHealth's clear interest in online life insurance indicates that the online life insurance marketing is beginning to heat up.

"A marketing effort by eHealth may help to bring more attention to the entire space overall," says Celent senior analyst Jeff Goldberg. "Policyholders don't change life insurance providers as often as they do for auto insurance, but with players like eHealth making the process easier, carriers may need to worry about consumers spending more time shopping around."

According to eHealth's Hakim, the new site allows users to conduct side-by-side comparisons of life insurance quotes and policy benefits after providing basic demographic information. Once users choose the policies that best fit their needs, they are connected to eFinancial, a Seattle-based broker, to finalize the application for submission to the carrier, he explains. Users also will be able to access the new product offering via eHealthInsurance.com, Hakim notes.

One for All

Hakim describes eFinancial as an "exclusive partner" in eHealth's new life insurance effort, adding that part of eHealth's value proposition is that it connects life insurance shoppers with multiple carriers but through one agent. "They act as the actual broker for the business that we referred the consumer to," he explains. "We feel very strongly that we are not a typical lead-generation vendor for life insurance, where people might come to a site and then all of a sudden they'll get five or six calls from different brokers because the site they went to sells that lead to multiple people.

"That is not our philosophy. Our philospophy is that we pick a partner, in this case eFinancial, and they're the only ones that will work with our consumers."

Eventually, Hakim reports, eHealth expects to become a life insurance broker itself, connecting consumers directly to carriers through its portal. The goal, he says, would be to include real-time quoting and online enrollment capabilities.

The company took a similar path in developing its new Medicare business over the past couple of years -- first partnering with brokers and then rolling out more direct functionality as it better understood the market and customer needs, Hakim points out. Last quarter, eHealth announced that it would be brokering Medicare insurance online.

"Life insurance is now in the first stage, where we understand that this is a business we want to be in and we're taking it as slow as we need to ensure that we ... totally understand the consumer and how they want to transact business online," Hakim says. "Then we will start working with different carriers and ultimately build an online platform with quoting and hopefully bring the entire process online to the actual enrollment of life insurance consumers."

Life insurance, however, may be a harder sale online than its auto and individual health counterparts. Celent's Goldberg says a certain amount of consumer education is required before making a sale. Many people, he explains, don't seek out life insurance on their own until they have children, remaining satisfied with the life insurance options that come bundled with their employee benefits packages until then.

Of course, that doesn't mean that there isn't a viable market for online life insurance, just that a certain amount of branding and marketing needs to accompany the online sales channel, Goldberg suggests. "An online player will need to work harder to educate potential customers as to the benefits of a life insurance product in order to make the right sale," he asserts. "I do think there are enough people who actively shop around for life insurance to make an online market viable, but the key will be to expand that business to those who don't fully understand the need for it."