The new company has just completed a round of financing which was much more successful than the first.
Ethos is a new Jay-Z insurance start-up that has completed a new round of financing in which it managed to raise $35 million. This company has shown for a second time that it doesn’t struggle to bring in the capital it needs.
This round of financing represents the second time it has managed to bring in millions.
During the Jay-Z insurance start-up’s first round of financing, it raised $11.5 million. It managed to bring in the cash from Hollywood and sports celebrity family offices and investment firms, for instance Kevin Durant’s Durant Company, Will Smith’s Smith Family Circle, Robert Downey Jr.’s Downey Ventures, Arrive, the Roc Nation from Jay-Z, in addition to the Sequoia investment firm from Silicon Valley.
Ethos earns money by offering a mobile and online sales channel for Assurity Life insurance policies, said a TechCrunch report. The insurer is based in Lincoln Nebraska and sells life insurance.
The Ethos Jay-Z insurance company functions differently than traditional permanent life insurers.
Instead of selling permanent life insurance in the traditional way, Ethos takes a different direction. Life insurers require their customers to pay premiums in perpetuity. Eventually, many customers end up allowing their premiums to lapse or opt out for a loss. Ethos, on the other hand, says it is a more equitable company because it offers only term life insurance. In those policies, policyholders need only pay for a fixed, pre-arranged length of time.
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Term life insurance policies are a considerably less expensive form of coverage than permanent life insurance products. According to Ethos chief executive officer, Peter Colis, many people do not have a thorough understanding of life insurance and their own needs. He said that many other companies encourage their customers to make more expensive choices than necessary because their sales people work on commission.
“They’ll often convince people they need permanent life insurance. And they’ll give a you a bait and switch price that less than 10% of people qualify for,” said Colis.
On the other hand, the Jay-Z insurance company start-up does not pay its sales team on commission and its prices are among the lowest in the life insurance industry, he said.