Last Updated: February 2022
With Crypto becoming more mainstream, life insurance companies have been forced to start addressing them as part of their financial underwriting.
When applying for life insurance, there’s a maximum a life insurance company will issue you based on your income, assets and net worth.
With so much wealth made through the crypto markets, a growing number of people aren’t getting properly insured because many life insurance companies aren’t recognizing their crypto portfolio as assets.
We surveyed 16 name brand life insurance companies with their stance on using crypto assets as part of the net worth calculation in qualifying for higher amounts of life insurance and this article will detail what we found.
- Should you be concerned with your crypto holdings when applying for life insurance?
- 16 Life Insurance Companies and how they view Cryptocurrency
Life Insurance is Boring. Let’s Get To The Root Of It! Here are the key takeaways…
Most life insurance companies haven’t developed any guidelines on the financial underwriting of cryptocurrency. The ones that have only count Bitcoin holdings (no alt coins and no swing trades) except for Zurich who does consider alt coins. Most consumers DO NOT have to worry about their crypto holdings in qualifying for the amount of life insurance they want – they can qualify with the generous rules of multiples of income and combined with other factors.
Please note: This article is not about using blockchain technology in life insurance. It’s about the financial underwriting factors of cryptocurrency. It’s meant to help those trying to qualify for the most amount of coverage factoring in their crypto assets. A growing problem for those with a significant portion of their net worth tied up in crypto.
Should You Be Concerned With Your Crypto Holdings When Applying For Life Insurance?
Only high net worth folks trying to apply for significant amounts of life insurance with a big cryptocurrency holdings should be concerned.
If you’re like most consumers out there and trying to apply for $3,000,000 of life insurance or below (90% of our clients), this likely won’t even be an issue and you can qualify with your current income and assets most likely. Most carriers (depending on age and carrier) will allow over 20 times your annual income + your assets/liabilities and special circumstances (ie a special needs child, business etc).
Life Insurance Companies and how they view Cryptocurrency
Right now, most life insurance companies have the stance of “To Be Determined” or “Individual Consideration”. Not very helpful. Don’t consider these companies as that’s their way of saying they won’t include crypto assets for now, but may in the future.
Of those that currently consider it as part of their net worth calculation, most will only consider Bitcoin and not any alt coins. They’ll only look at the amount of Bitcoin you have as part of your assets and exclude everything else.
This isn’t an ideal scenario, but it’s a start for an industry that’s slow to evolve with technology.
With all this said, this is a fluid situation and companies are being pressured to loosen those guidelines as crypto adoption and markets surge.
Some companies have published these guidelines, but most you have to speak with an underwriting department to get an answer – and that’s exactly what we did.
Of those that do consider cryptocurrency as part of their financial underwriting guidelines, here’s what we found:
AIG – Will consider Bitcoin only. They recognize it as an asset at the current trading rate
Foresters – TBD
Equitable – Will consider Bitcoin as long as you can provide valuation statements from a valid financial institution. Bitcoin cannot be a major source of net worth either. No more than 20% of total net worth.
Global Atlantic – Will consider Bitcoin only and require documentation from a valid financial institution. May not be considered at all depending on the percentage of net worth which we couldn’t get a firm number on.
John Hancock – Bitcoin only. Will recognize at the current trading rate but only up to 10% of total net worth.
Legal and General (Banner Life) – They will NOT consider any crypto as part of a client’s net worth.
Lincoln Financial – TBD
Mutual of Omaha – Does NOT consider any crypto as part of a client’s net worth.
Nationwide – Bitcoin only. Must provide statements from a valid financial institution. Bitcoin cannot be a major source of net worth. They mentioned no more than 10%-20% of total net worth.
New York Life – TBD
North American – TBD
Protective Life – Bitcoin only. Individual consideration.
Prudential – Bitcoin only. If other assets are substantial, they may consider a small portion of crypto portfolio.
Symetra – Bitcoin only. It’s recognized as an asset but at 80% of the current value.
Transamerica – Bitcoin only. Individual consideration.
Zurich – Bitcoin AND alt coins! They’ll look at the percentage as part of their entire net worth, the type of currency, how long it has been around, the average worth over time, etc. If fairly new, they would only look at 10%. If it’s been around a while, they would look at the average and likely devalue some, but it will be a case by case basis.
If you’re a Bitcoin HODL’r and having trouble qualifying for the amount of life insurance you need (and what we feel deserve), use the reference material above.
If you’re a HODL’r of Ethereum, Solana, VeChain, Luna, Dot or any other alt coins out there AND you’re having trouble qualifying for the coverage amounts you need, Zurich would be the place we recommend starting.
And again, if you want to apply for less than $3,000,000 of coverage, it’s likely that none of this matters. Fill out the form on this page and compare rates. You’ll be able to qualify financially for all of them listed.
The life insurance industry is still figuring out how to consider crypto assets to financially underwrite policies.
It’s not a problem large enough to solve because many wealthy crypto holders can qualify for their ideal amount of coverage with their income and other investment holdings. There will be a growing number of crypto investors in the near future where this will effect them and push life insurance companies to get with the times and recognize cryptocurrency as an asset on the same lines as a stock portfolio.
I expect this to loosen up over the coming the years. Hopefully sooner than later.
All we can do now is survey the companies and let you know what to expect.
If you have any questions about your specific situation, please don’t hesitate to reach out.
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