Hello everyone! In January I have to renew my life insurance (300k, pure risk). A friend of mine suggested to have a look at the crowd life insurance model, which should be very cheap when compared with traditional life insurances. I checked it out and frankly it looks too good to be true.
With a traditional insurance company, I paid 313 CHF a year to insure 300k in case of death. With Turtleneck (https://www.turtleneck.com/tn), a crowd life insurance, the price per year would be 107 CHF!
The difference is so large that it looks suspicious. Had any of you experiences with Turtleneck or other similar companies? Is there a legal net to protect the customer? Would you change or stay with the more reputable traditional insurance company, even if it costs three times as much?
It’s true that insurance have high margins. but I still think it quite risky to take this type of insurance.
I don’t really understand the concept:
“Since we charge death cases only when they happen and not based on statistics, nothing could be cheaper than Turtleneck.” -> what happens is the deaths are higher than the statistics ? the price increases.
In fact, the pool risk is on your side.
I’ve had Turtleneck life insurance for 2 years now. The pros are: Squarelife is a regulated life insurance company (in Liechtenstein). You can call and talk to real people, or even drop by their office. The cost is obviously hard to beat. The concept seems sound.
That said, I really can’t say that I have complete confidence in the insurance. The company doesn’t fall under Swiss consumer protection laws. Squarelife is such a small and niche company that there aren’t many (if any) real consumer experiences with filing claims out there. The “policy” is far too basic with too much room for possible litigation. The use of the terms “member” and “membership” rather than policyholder and insurance could cause one to question whether it falls under (FL) insurance laws. I spoke to them on the phone several times and recommended that they provide a policy with detailed T&Cs which customers can download and print, but as of yet there is still just the somewhat vague “membership card.”
I do expect that my beneficiaries will be able to claim the benefit BUT I don’t know if I would bet my life on it, which is kind of the idea with life insurance. I have contemplated getting basic low coverage from a solid Swiss insurer for the crucial coverage and keeping Turtleneck for the non-crucial portion of coverage.
The biggest problem with life insurance is that you won’t be around to file any lawsuits. You have to have total trust in the insurance provider. Naturally longstanding insurance providers with a proven track record engender more trust.
Another issue is that a small company/startup bears a higher risk of failure, and a closure would result in your losing your insurance coverage. If that happens when you are old or sick, you may not be able to get insured anywhere else.
On the other hand, I do like to give the new guys a chance. If the concept works, it could drastically reduce the cost of life insurance.
Still, I would recommend a more expensive but solid insurer for your basic insurance and Turtleneck for the nice-to-have bit.
seems a little weird, indeed… the price different is really huge
if you want accurate information, I advise you to visit some useful websites on life insurance such as https://hellosafe.ch or https://comparis.ch, they helped me a lot when I arrived in Switzerland 2 years ago.
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