The Web Gets A New Life

By entering the online life insurance space, eHealth may bring increased visibility - and competition - to this developing market.

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 life insurance is a natural fit for cross-sell opportunities on eHealthInsurance.com. "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 asserts. "We feel this is a great adjunct product that people would be interested in."

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

EHealth is not the first company to enable consumers to comparison shop for life insurance online, as it is 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 market is beginning to heat up.

"A marketing effort by eHealth may help bring more attention to the entire space," 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 based on 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 selected carrier, he explains.

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 through a single agent. "They act as the actual broker for the business that we referred," he explains. "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 philosophy 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.

A Familiar Road

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 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," 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 sell online than its auto and individual health counterparts. Celent's Goldberg says consumer education will be needed to generate sales. Many people, he explains, don't actively seek out life insurance until they have children.

Nonetheless, there is a viable market for online life insurance, Goldberg suggests, but targeted branding and marketing need to accompany the online sales channel. "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. "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."

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