Lemonade, a prominent insurance provider, has finalised a carrier appointment with Banner Life, a subsidiary of Legal & General.

The recent partnership, which, according to reports, was forged on February 28th, 2024, signifies a significant operational transition for Lemonade, as it moves away from its previous collaboration with Bestow. Lemonade’s official website now reflects this change, indicating the cessation of its association with Bestow.

Lemonade’s website also reportedly indicates that the company is no longer in collaboration with Bestow. An online statement reads: “Lemonade Life Insurance Agency, LLC (LLIA) is acting as the agent of Legal & General America, whose life insurance products are underwritten and issued by Banner Life Insurance Company Urbana. Banner products are distributed in 49 states and in DC. Banner Life is not authorized as an insurer and does not do business in New York. The Legal & General America companies are part of the worldwide Legal & General Group. OPTerm policy form # ICC21-DTCV and state variations. Premiums based on preferred plus non-tobacco, preferred non-tobacco, standard plus non-tobacco, standard non-tobacco, preferred tobacco and standard tobacco underwriting classes. Policy descriptions provided here are not a statement of contract. Please refer to the policy forms for full disclosure of all benefits and limitations. LLIA receives compensation for the insurance policies it sells. Products or issue ages may not be available in all jurisdictions. Limitations or restrictions may apply. Our application asks about your lifestyle and health.”

Lemonade’s Partnership Transition and Pricing Adjustments

Since introducing its term life insurance in early 2021, Lemonade has undergone significant developments in its operational structure. Initially, Lemonade’s term life coverage was underwritten by North American Company, alongside its collaboration with Bestow, offering policies starting at US$9 per month.

As of now, Lemonade’s policies have seen a pricing adjustment, with coverage starting at $8 per month, reflecting the insurtech’s aim to to remain competitive in the market.

Negotiations between Lemonade and Legal & General have been ongoing for some time. However, the formal transition to Legal & General’s underwriting occurred on March 22, 2024, marking the initiation of the partnership’s first phase.

The decision to transition to Legal & General was reportedly driven by several factors. 

Notably, Lemonade identified limitations in its previous arrangement with Bestow, particularly concerning the conversion rates for individuals requiring Electronic Health Records (EHR) or Attending Physician Statements (APS) for coverage approval. 

Additionally, Legal & General’s term life pricing emerged as a competitive advantage, being cheaper than the majority of competitors’ offerings 95% of the time.

Under the terms of the partnership, Lemonade receives a commission from Legal & General for each policy sold. However, a condition stipulates that Lemonade must compensate Legal & General with a fee to cover the opportunity cost if it fails to meet a certain premium threshold.