Lemonade Life Insurance Review
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Term life insurance is an affordable way to provide a financial safety net to your spouse, children, or other loved ones should you die unexpectedly. With such an insurance policy, you’ll pay a premium – often monthly, quarterly, or annual – for a set number of years, typically 10 to 30. If you die during this period, your term life insurance policy pays out a set amount of cash to your designated beneficiaries.
How much your term life policy pays out depends on how much life insurance protection you pay for. Generally, the higher your policy’s premiums, the greater its death benefit and the money it pays out to your beneficiaries should you die.
If you don’t die during your policy’s term? Then, your policy will never pay out. Don’t view that as a negative: Life insurance policies are designed to provide for your loved ones in the case of your unexpected death. They’re about your peace of mind: Policyholders don’t have to worry about your spouse or children struggling to pay their bills if they suddenly lose their income.
A term life policy is the simplest and most affordable type of life insurance. And you’ll have plenty of choices when you’re ready to apply for one of these policies. That includes the term life policies provided by the Lemonade insurance company.
Is a Lemonade term life insurance policy a good choice for you? Yes, if you’re looking for a simple policy that provides financial protection for your beneficiaries. Our Lemonade insurance review will give you an insight into how it works and whether it is a good choice.
In this article
What is Lemonade life insurance?
Lemonade, an insurer that debuted in 2015, sells several insurance products online. It offers life insurance, home insurance, renters insurance, pet insurance, and car insurance. Consumers in every state except for New York can apply for a term life policy from Lemonade. The company offers policies for 10, 15, 20, 25, or 30 years. If you pass away during your term, Lemonade will pay out your death benefit to your named beneficiaries.
It’s important to know the difference between what Lemonade sells – term life policies – and two other popular types of life insurance, whole life insurance and universal life insurance. These policies, also known by the broader category of permanent life insurance, cover your entire life, not just for a set number of years.
They also have cash value. Whole life insurance acts a bit like an investment account. The money you pay into your whole-life policy grows in value over the years. You can eventually choose to cash out your policy, receiving your policy's cash value minus any surrender fees charged by your insurer.
You can’t cash out a term life policy, including any offered by Lemonade. These policies do not carry any cash value. You won’t receive any cash when your term life policy expires. On the positive side, term-life policies are usually less expensive, charging lower monthly premiums than whole-life or universal-life policies. If your goal is simply to protect your loved ones in case you die unexpectedly, a term life policy is a good choice. If you also want to use your life insurance policy as an investment? Then you might consider whole life insurance.
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How does Lemonade life insurance work?
Lemonade’s application process is simple and straightforward. As with all life insurance policies, you can select how much coverage you want with a Lemonade policy. On its FAQs page, Lemonade says that you can take out a life insurance policy with up to $1.5 million of coverage. No matter the coverage you choose – $1.5 million, $500,000, $100,000, or $50,000 – your Lemonade life insurance policy will pay out that amount if you die before your policy's term expires.
How much you pay each month in premiums will vary. Lemonade says that its life insurance policies start at $9 a month. Your policy’s premium will depend on several factors, including your age, health background, lifestyle, and where you live. If you are a smoker or overweight, you’ll typically pay more for your life insurance policy. You'll also pay more depending on how much coverage you sign up for and how many years your policy lasts.
Once you sign up for a policy, your monthly premium will not change. If you make your payments on time, your policy will remain effective. If your policy ends before you die, it simply expires. You can then sign up for a new policy if you'd like.
What sets Lemonade apart from many other life insurance providers? You won't have to schedule a medical exam or see a doctor before signing up. Many life insurance companies require that you get examined by a physician. This helps these companies determine the risk of insuring you. If you are overweight, for instance, your life insurance company might charge you a higher premium because you are at a higher risk of suffering health problems.
Lemonade, though, requires no medical exams. When you sign up, an online bot will ask basic health questions. Lemonade will then use this information to help determine your monthly premium.
There is a catch, though: Lemonade states that its life insurance policies are designed for generally healthy people who have no history of heart disease, cancer or other life-threatening conditions. Lemonade might decline your life insurance application if you have such a history.
Lemonade might deny you, too, if you have a history of drug or alcohol abuse or participate in dangerous sports.
Getting life insurance quotes for a policy is easy. First, go to Lemonade’s life insurance website here. Then click on the large “Get A Quote” button at the top of the page. That will bring up a pop-up box asking you basic questions about yourself:
You'll tell Lemonade if you are a male or female and provide the company with your birthdate, height, weight, and state where you live. You'll also need to specify whether you use nicotine products. Once you provide this information, click the "Let's Get Estimating" box.
This will take you to another pop-up box that states your monthly insurance rates and how much coverage you would receive.
You'll have the option to adjust your coverage amounts and term length here, too, which will cause your monthly premiums to rise or fall, depending on your choices.
Once you do this, click the "Apply Now" button to sign up for a term life policy with Lemonade. It also offers several add-ons to enhance your coverage at an additional cost.
How much does Lemonade life insurance cost?
The monthly cost of a Lemonade term life policy will vary depending on where you live, your age, the coverage options you want, the length of your term, and your general health.
For instance, when I signed up as a male born in 1979 who stood 5-foot-11, weighed 205 pounds, and lived in Georgia, I was given a quote from Lemonade of $62.83 a month. That premium price would give me $550,00 of coverage, the death benefit that Lemonade would pay out if I died during the policy’s term. The policy would come with a term of 20 years.
My policy price would change if I tweaked my coverage amounts and terms. If I lowered my coverage to $350,000 and my term to 15 years, my policy price would drop to $37.50 monthly. If I boosted my coverage to $1.1 million and my term to 20 years, I'd pay $119 a month.
Say you are a female born April 3, 1999, and you stand 5-foot-8 inches, weigh 140 pounds, and live in Maine. If you do not use nicotine products, Lemonade might quote you a term life policy that costs $18.83 a month for $550,000 worth of coverage and a term of 20 years.
If you change the term to 10 years and the coverage amount to $50,000 – the lowest you can go with a Lemonade policy – your policy premium will fall to $8.88 a month.
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Lemonade life insurance features
Fast approvals
You can expect a quick decision on your application because you don't need a physical or medical evaluation to apply for Lemonade life insurance. Lemonade’s website says that after you answer a few health questions online, you'll typically receive a decision in five minutes.
You can cancel at any time
Lemonade lets you cancel your life insurance policy whenever you want without any early cancellation fees. You'll get a full refund if you cancel within the first 30 days of opening your policy.
Varying coverage levels
You can apply for a life insurance policy with a minimum coverage level of $50,000 and a maximum of up to $1.5 million. You can choose the term that works for you. You can also select from various term lengths: 10, 15, 20, 25, or 30 years.
Two types of beneficiaries
If you die while your life insurance policy is in effect, you can select two types of beneficiaries who will receive your death benefit payout. Your primary beneficiaries are first in line to receive your death benefit payment. If your primary beneficiaries have died or can't accept your benefits, your death benefit payment will be passed on to your contingent beneficiaries.
There’s a mobile app
Lemonade offers an app on The App Store and Google Play. The app can be used to make payments, change beneficiaries, or contact the customer support team.
Who is Lemonade life insurance best for?
Lemonade life insurance is a good choice for many types of customers, including:
Those on a budget. Lemonade might be a good choice if you don’t want to spend much on life insurance. That’s because Lemonade policies start as low as $9 a month. You must choose a shorter term and a smaller death benefit to qualify for the most affordable Lemonade policies. Your policy premium will vary, too, based on your age, the state in which you live, and your health.
You want simple protection. Lemonade only offers term life insurance. This is the simplest form of life insurance: Your policy will last for a set number of years, ranging from 10 to 30, before expiring. If you die during your policy’s term, your beneficiaries will receive your agreed-upon death benefit payment. You pay for this policy with monthly premiums that never change.
You want to skip the medical exam. Lemonade doesn’t require you to submit to a physical or medical exam for life insurance. Instead, you’ll answer health questions online before receiving an approval or denial of your life insurance policy.
Who shouldn’t get a Lemonade life insurance policy?
A Lemonade life insurance policy isn’t right for all customers, though. This includes:
Customers who are too old. Lemonade life insurance policies are only available to people who are 18 to 60 years old.
Customers who aren’t healthy. Lemonade says that its policies are designed for people who have no history of heart disease, cancer, or other life-threatening conditions.
Smokers. You’ll pay more for a Lemonade life insurance policy if you use nicotine. (Though this will be the case for most, if not all, life insurers.)
Extreme-sport enthusiasts. Lemonade says that its life insurance policies are also not designed for people who participate in dangerous sports. Lemonade considers such customers to be too high of a risk.
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Pros and cons of Lemonade life insurance
Pros
- No medical exams required.
- Policy premiums can run as low as $9 a month.
- You can choose a death benefit payout of up to $1.5 million.
- You can customize your plan’s term and death benefit to achieve the lowest possible monthly premium.
Cons
- Lemonade life insurance is not available to those older than 60.
- Policies are not available to people with serious health conditions.
- Lemonade only offers term life policies, not whole or universal life policies.
Lemonade vs. the competitors
Company name | Life insurance policies offered | Coverage limits | Terms available |
Lemonade | Term only | Up to $1.5 million | Lemonade offers policies of 10, 15, 20, 25 or 30 years |
Aflac | Term and whole life | Up to $250,000 for either a term or whole-life policy | 10, 20 or 30 years for term life policies |
Progressive | Term and whole life | Up to $1 million through Progressive Life Insurance Company | 10, 15, 20, or 30 years for term life policies |
Aflac
Unlike Lemonade, Aflac offers both term life and whole life insurance policies. While term life policies only last for a set number of years – usually 10 to 30 – Aflac’s whole life policies will remain in effect for your entire life. Because these policies can last so long, they generally come with a higher price tag.
Depending on your coverage, you might not need to answer any medical questions before signing up for an Aflac life insurance policy. On its website, Aflac says that customers might not be required to submit any underwriting questions for a death benefit payout of up to $50,000.
You can take out whole life or term life policies with a maximum death benefit of $250,000 with Aflac. You can choose a term of 10, 20, or 30 years with an Aflac term life policy.
Progressive
Like Aflac, Progressive offers both term and whole life insurance policies. Term life policies have terms of 10, 15, 20, or 30 years. If you take out a policy through Progressive Life Insurance Company, you can select a maximum death benefit of $1 million.
Progressive also offers final expense or burial life insurance. This type of insurance covers the costs of your funeral and other final life expenses, sparing your loved ones the financial burden of paying for these expenses.
Progressive also offers short-term life insurance policies that last for one year. This can be a good option if you are temporarily unemployed and have lost your employer-provided life insurance.
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FAQs
How quickly can I get a Lemonade life insurance policy?
Lemonade says that you can apply for a life insurance policy entirely online. You won’t have to meet with a doctor or life insurance agent. Lemonade says that you’ll receive a decision on your application within minutes of submitting it.
What factors can cause Lemonade to decline your life insurance application?
Lemonade term life policies are only available to people from the ages of 18 to 60. If you are older than 60, Lemonade will decline your application. Lemonade will also decline your application if you have a history of cancer, heart disease or other life-threatening conditions.
How can I lower my policy premium?
You can lower your monthly premium by applying for a shorter-term policy and a lower death benefit. You’ll qualify for a lower premium if you don’t smoke and if you are not overweight.
Will my policy premium ever change?
No. Once you take out a Lemonade life insurance policy, your premium will remain the same throughout that policy’s life.
Can I change my policy?
It depends. Lemonade allows you to change your beneficiaries and adjust how much money each of your beneficiaries gets upon your death. You can’t, though, change your coverage amount and term length.
The bottom line
Investing in a life insurance policy is a good way to protect your family and loved ones financially. If you’re looking for the simplest form of life insurance – term life – Lemonade provides plenty of options while charging the best rates. And a nice perk? It has a hassle-free, no-exam policy.
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Writer
Dan Rafter is a freelance writer who has more than 20 years experience covering personal finance. He's written for the Chicago Tribune, Washington Post, Bankrate, CreditCards.com, Rocket Mortgage, NortonLifeLock and several others.
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