Lemonade was founded by Daniel Schreiber and Shai Wininger in 2015 to modernize insurance using technology. Based in New York City, the company has over two million customers with a wide range of insurance products, including renters, homeowners, pet, car, and term life insurance.
Business Insider compared Lemonade Life Insurance to the best life insurance companies and found it to be a decent option for cheap term life insurance. However, customers should be wary of its limitations and inflexibility.
Lemonade Life Insurance Overview
Lemonade offers affordable term life insurance policies for budget-conscious shoppers. Its term policies can last up to 40 years, with payouts as high as $100 million. Policies are available to customers in all states — except New York — and Washington D.C.
There's a lot to like about Lemonade Life Insurance. For one, the company's straightforward application process makes purchasing a policy quick and easy, with no medical exam required. When buying your policy, you can bundle your life insurance policy with Lemonade's other offerings and receive a discount on those policies (life insurance policies are not eligible for the bundling discount).
Lemonade also has highly rated apps on the Apple app store and Google Play store, 4.9 stars and 4.4 stars, respectively, across a combined 80,000 reviews.
Additionally, Lemonade is a Public Benefit Corporation and a certified B-Corp, which means it's legally obligated to balance profitability with social responsibility, which is independently verified. Customers can track Lemonade's impact through its Giveback page. It has donated over $8 million since 2017, with $2 million donated in 2023 alone.
That said, Lemonade's life insurance isn't as varied as some of its larger, older competitors. For example, since the company does not offer permanent life insurance products, you can't convert a term policy to whole life insurance when it expires.
Additionally, it's worth noting that Lemonade has been around for less than a decade. Age isn't necessarily an indication of quality, but customers may pause before purchasing life insurance with a term that's twice as long as the company's lifespan. Furthermore, Lemonade lacks ratings from AM Best, Moody's, and Standard & Poor. However, it has an A rating in Financial Stability from Demotech, a financial analysis and insurance rating firm.
Lemonade Life Insurance Pros and Cons
Lemonade Life Insurance Pros
- Relatively cheap premiums
- Options for bundling with other Lemonade insurance policies (renters, homeowners, pet, auto)
- Can purchase life insurance online
- No medical exam required
Lemonade Life Insurance Cons
- Only offers term life insurance
- No option to convert to permanent life insurance
- Relatively young company
- Does not offer additional riders
Lemonade Life Insurance Plans Available
Unlike many other life insurance providers that offer a wide range of policy types, Lemonade only has term life insurance policies. So, if you're looking for permanent life insurance coverage, such as whole life insurance or universal life, Lemonade may not be the best fit.
Lemonade's term life insurance policies last 10, 15, 20, 25, 30, 35 or 40 years. Coverage amounts start at $100,000 and could go into the millions. You can apply for coverage as long as you're between 20 and 75 years old. The application process is fully online, and depending on the information you provide, you may be asked to undergo a medical exam before Lemonade offers you coverage. Also note that if you have a history of heart disease or major medical conditions, you may not qualify.
Here's how term life insurance works: If you die during the coverage period, your beneficiaries will receive a lump sum death benefit. If you outlive your policy, your term life insurance will expire. In this case, you can apply for a new policy, though it will most likely come with a higher price tag since you're older and are more likely to have more health issues.
Additional Coverage Options offered by Lemonade (Riders)
Lemonade's term life insurance doesn't offer riders, which are extra benefits that you can add to a life insurance policy and provide additional protection if you meet their conditions.
How Much Does Lemonade Life Insurance Cost?
According to its website, life insurance policies at Lemonade start at around $8 monthly, and your premium is locked in for the entire period, no matter the term you choose. However, your customized premium will depend on the coverage you get, as well as your age, lifestyle, and health background. When you apply for coverage on Lemonade's website, you will see a quote estimate before you finalize the application process.
Below are the monthly premiums for a 20-year, $500,000 term life insurance policy from Lemonade to give you a better idea of what to expect. These are sample rates for a healthy and non-smoking person.
Age | Men (monthly) | Women (monthly) |
20 | $18.36 | $15.02 |
30 | $18.79 | $15.85 |
40 | $29.75 | $23.96 |
50 | $69.43 | $54.48 |
60 | $199.55 | $140.46 |
Term life insurance is typically the most affordable type of life insurance since it doesn't cover you for your entire lifetime. However, to make sure you qualify for the most affordable premium, you'll want to purchase term life insurance when you're still young and healthy. The longer you wait to purchase term life insurance, the higher your premiums may be.
How to File A Claim with Lemonade Life Insurance
You can file a claim through the Lemonade mobile app by tapping the "File a Claim" button. If Lemonade's AI doesn't approve your claim immediately, a team member will contact you to discuss the next steps. You can also call their customer service team at (844) 733-8666 or email help@lemonade.com.
Compared to traditional insurance companies, Lemonade tends to process claims faster. According to its website, approximately 40% of Lemonade claims are processed instantly, and three seconds is their fastest recorded claim.
Lemonade Life Insurance Customer Reviews and Testimonials
The majority of Lemonade customer reviews can be found on its Trustpilot page, averaging 4.4 stars out of five across over 1,900 reviews. Reviews on its BBB page are less favorable, though the sample size is far smaller, receiving an average of 2.09 stars across 340 reviews.
Very few of these reviews pertain specifically to Lemonade's life insurance policies. However, across all of its products, Lemonade customers reported difficulty canceling policies and reaching a human representative, as the majority of customer interactions are handled by AI.
It's also worth noting that Lemonade doesn't have a rating from the major third-party insurance rating agencies like AM Best, Moody's, and Standard and Poor. However, it has an A rating in Financial Stability from Demotech, an insurance rating agency out of Columbus, Ohio.
Lemonade Life Insurance Alternatives
Lemonade Life Insurance vs. Ethos Life Insurance
Unlike Lemonade, which only offers term life insurance, Ethos provides two policy options: term life insurance for younger policyholders with coverage amounts ranging from $20,000 to $2 million and guaranteed issue whole life insurance for older policyholders, which offers coverage from $10,000 to $25,000.
While Lemonade and Ethos both come with affordable premiums, you may prefer Ethos if you're looking for an all-inclusive life insurance company that allows you to convert term life to a whole life insurance policy without a medical exam. Plus, Ethos lets you add critical illness, child term, premium waivers, and an endowment benefit rider to your whole life insurance policies.
Read our Ethos life insurance review.
Lemonade Life Insurance vs. State Farm Life Insurance
Topping the list of the best life insurance and best whole life insurance, State Farm has an extensive list of life insurance products, including term, whole, and universal life insurance. Plus, you can select from three tiers of coverage under each type to cater to your situation. If you have more complex life insurance needs, State Farm's policies give you more freedom to customize your coverage.
However, if you only need the most basic levels of coverage, Lemonade is a stronger contender since its policy premiums are competitive, and you typically do not need to undergo medical exams to qualify.
Another difference between the two is that Lemonade's life insurance application process is much more streamlined than State Farm's. You can purchase a policy through Lemonade in as little as 15 minutes, whereas State Farm's policies are available only through agents, and you'll need to speak with them for a quote.
Read our State Farm life insurance review.
Lemonade Life Insurance vs. Ladder Life Insurance
Like Lemonade, Ladder Life only offers term life insurance, which doesn't provide lifelong coverage. It also doesn't build cash value or let you convert to a whole life policy later on. Ladder offers a wide range of term lengths, from 10 to 30 years in increments of five. Coverage amounts are generous as well, with a face value of $100,000 to $3 million with no medical exam required.
What sets Ladder apart from Lemonade is that it offers greater flexibility and customization — You can adjust your death benefit anytime during your policy term through the company's proprietary tool called laddering. Once you've adjusted your death benefit, your insurance premiums will change accordingly.
Read our Ladder life insurance review.
Lemonade Life Insurance FAQ
The Lemonade life insurance application process is entirely online. You'll answer a few questions about yourself, such as your location, age, and health. This information will determine your eligibility and premiums.
Lemonade's term life policy does not cover death from suicide in the first two years of your policy. It also won't cover your claim if you provide inaccurate or false information when signing up for life insurance. Always be honest about your age, medical conditions, family health history, and other personal information. You'll avoid any unpleasant surprises down the line by being upfront.
Yes, you can cancel your Lemonade term life insurance policy at any time, without incurring any charges. It also offers a 30-day free look period, which means you can get a full refund of your first month's premium if you cancel within the first 30 days. To cancel your policy, call Lemonade at 844-733-8666.
If you're interested in receiving coverage through Lemonade, apply for term life insurance by filling out the online application on the company's website. There, you'll answer a few questions about yourself and your health. Lemonade will then transfer you to its partners at Legal & General to finish up your application and customize your policy.
Why You Should Trust Us: What Went into Our Lemonade Life Insurance Review
All companies are rated based on our expert's insurance rating methodology to ensure objectivity and equal opportunity for insurers. The factors we considered when rating our best life insurance products include the following:
- Customer satisfaction
- Financial stability
- State coverage
- Ethics
- Policy types
- Average premiums
- Waiting periods
- Standard exclusions
- Agent training
To gauge Lemonade's customer satisfaction level, we looked at the company's ratings and reviews from third parties. While Lemonade lacks ratings from the major third-party insurance rating agencies like AM Best and Moody's, it has plenty of customer ratings on its Trustpilot and BBB pages.
Read more on Business Insider's life insurance rating methodology.
