Fabric Life Insurance Review: Financial Products for Young Families

Starting a family raises a lot of financial questions for young parents. Being responsible for a little human sheds harsh light on everything you know — or don’t know — about your finances.

Getting married, buying a home with a partner or having kids are all major life-changing events that, among other things, remind you to get your financial act together.

That often includes buying life insurance, so your family isn’t left with a financial burden in case you die. It also includes much more fun-to-think-about steps, like building a nest egg and helping the kids prepare for college.

Fabric is an online life insurance provider that understands all these financial to-dos bouncing around in new parents’ sleep-deprived brains. With its unique suite of products, it aims to be a one-stop shop for families to get their finances in order.

Here’s our breakdown of what Fabric offers and how to decide whether it’s the right fit for you and your family.

What Is Fabric Life Insurance?

Fabric is a Brooklyn-based financial services company designed specifically for parents to “start their financial life.” It offers term life insurance, accidental death insurance, 529 college savings plans, high-yield savings accounts and tools to help couples manage financial accounts.

Features

Fabric leads with life insurance, and offers additional financial products to help parents and young couples set their families up for a healthy financial future. Here’s what you get when you sign up.

Term Life Insurance

Fabric offers 10-, 15- and 20-year term life insurance policies. A Fabric life insurance policy covers death from accidents or illness. All policies exclude death from suicide within the first two years of coverage, which is typical of life insurance policies.

Instant Underwriting Process

In many cases, Fabric can make a decision on eligibility without a medical exam and make you an offer immediately after you submit an online application.

Fabric uses third-party data vendors to verify the information on your application, including the Social Security Administration, DMV and Medical Information Bureau. Then its algorithms determine whether you’re eligible to get an offer, ineligible or need to provide more information.

If it can’t make an instant decision, it’ll pass your application to a team of human underwriters for further review. In that case, you may have to answer follow-up questions, supply your medical records or schedule a health exam.

If you have to take a health exam, you may be able to schedule it online through your Fabric account. If no time slots are available in your area, you’ll instead get a call from Fabric’s partner company APPS paramedical services. You won’t pay anything for the exam.

Your life insurance coverage begins upon receipt of your first premium payment.

Money-Back Guarantee & Payment Grace Period

When you sign up for your policy with Fabric, you’ll enter a 31-day “free-look” period. You can cancel your policy anytime during this period and get a refund of your first month’s premium. You can cancel your policy anytime after that with no premium refund.

You’ll pay monthly premiums via automatic card payments. If you miss a payment because of new card information or something else, your coverage will stay in effect for a 31-day grace period to give you time to update your info and get current.

After 31 days, your coverage will pause, and Fabric will try to collect payment and reinstate your coverage for up to 60 days past due before canceling your policy.

Backed by A+-Rated Carriers

Fabric insurance policies are issued by Vantis Life Insurance Company, a Penn Mutual company, the second-oldest mutual life insurance company in the U.S. Vantis Life is rated A+ by A.M. Best, an industry standard rating that means you can count on it to pay out claims.

Accidental Death Insurance

In addition to term life insurance policies, Fabric offers accidental death insurance (A.D.), which pays out in case you die by accident, like in a car crash or fire.

A.D. could mean a higher payout for your beneficiaries when coupled with a term life insurance policy and could be attractive if you engage in high-risk activities. Death by illness or natural causes isn’t covered by an accidental death policy.

A.D. doesn’t have a term. Instead, it’s conditionally renewable, which means you’re covered on a monthly basis as long as you pay premiums. It’ll automatically expire on the policy’s anniversary date nearest your 60th birthday.

Fabric’s accidental death insurance is available in all states and Washington, D.C., except Colorado, Massachusetts, Montana, New York, North Dakota, Pennsylvania, Virginia and Washington.

Whole Life Insurance

You can’t purchase a whole life insurance policy from Fabric, but you can apply to convert your term life insurance policy into a whole life policy down the line — until you’re 65 — without additional underwriting. The price will be based on your age when you apply.

Create a Free Will

Through your Fabric account, you and your spouse or partner can create wills for free and assign a guardian for your kids online. It takes about five minutes to enter your information, and you can make it legally binding by printing and signing with two witnesses.

You don’t have to buy a life insurance policy from Fabric to get access to this feature.

529 College Savings Plan

Through your account in the Fabric app, you can open a 529 college savings plan for your kids to keep all of your planning for their financial future under one roof.

High-Yield Savings Account

Through your account in the Fabric app, you can open a “rainy-day fund” for your family, a high-yield savings account you and your spouse or partner can both access through the Fabric Vault.

Fabric Vault & Mobile App

Through the Fabric Vault in the mobile app, you and your spouse or partner can securely store and share vital financial information in case of an emergency. Use it to keep track of your bank accounts, retirement accounts, credit information, loans and more.

Your Fabric insurance policies and wills are automatically stored in the Vault, too, so your beneficiary can have easy access to the information they need in case you die.

If you want, you can grant access to just your life insurance policy information to your beneficiary — so they get the information they need without anything you don’t want to share.

All of Fabric’s financial management tools are available through its mobile app for iOS and Android.

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How Much Does It Cost?

The Fabric Vault is free to use to create a will, open a savings account, start a 529 plan or apply for life insurance.

After you apply and before you sign up, you’ll receive an offer for life insurance that includes your coverage amount and monthly premium price. Fabric doesn’t list its coverage or premium amounts, but shares these five rate classes you could fall into, based on the amount of risk you pose as a policyholder, from lowest to highest:

• Ultra Select: You lead a low-risk lifestyle, have excellent health and family history, and haven’t used tobacco in the past five years.
• Select Plus: You lead a low-risk lifestyle, have very good health and family history, and haven’t used tobacco in the past three years.
• Select: You lead a low-risk lifestyle, have good health and family history, and haven’t used tobacco in the past two years.
• Standard: You lead a moderate-risk lifestyle, have acceptable health and family history, and haven’t used tobacco in the past year.
• Tobacco User: You lead a moderate-risk lifestyle, have acceptable health and family history, and have used tobacco in the past year.
• Sub-Standard: Your lifestyle, health, family history and/or tobacco use pose a greater risk than “standard.”

Accidental death policies are priced the same for everyone (but may vary by state):

• $6 per month for $100,000 in coverage.
• $15 per month for $250,000 in coverage.
• $30 per month for $500,000 in coverage.

Pros & Cons

Fabric is doing something few other life insurance companies — or any financial institutions — do: responding to customer needs.

It keeps life insurance simple to make it easy and, in most cases, quick to sign up.

Instead of expanding its product offerings with complicated life insurance products most people don’t need, it has instead layered on products that its family-focused customers need: college savings, rainy-day funds and will creation.

It’s not as simple or sleek as some competitors in online life insurance, but its holistic approach to family finances makes it stand out specifically for parents and young couples — a feat that’s hard to achieve in a space where every company is fighting for that same customer.

Pros

• One-stop shop: Fabric stands out for providing a handful of financial products in one place, specifically set up to meet the financial needs of young families.

• Accidental death insurance: Purchase an accidental death policy to further protect your family if you lead a high-risk lifestyle.

• Instant coverage for some applicants: Get a quote in seconds, and fill out your application in just a few minutes. If you get an instant offer, you can make your first payment and be covered right away.

• Whole life insurance: At any point in your policy’s term, convert it into a whole life policy for extended coverage and peace of mind as you age.

• Fixed premiums: Your monthly premiums won’t change throughout your policy’s term. (It will probably change if you convert the policy to whole life insurance or purchase accidental death insurance.)

Cons

• Additional underwriting for some applicants: If Fabric can’t make an instant offer, you may have to go through an extended application process, including a medical exam required for some applicants.

• No riders: A life insurance rider adds coverage or special terms to your policy. Fabric doesn’t offer riders, though accidental death insurance is a common rider on term life policies.

Fabric Customer Service

Fabric’s customer service team gets excellent reviews from pleased customers. They’re available via email Monday through Friday from 9 a.m. to 6 p.m. Eastern. Reach them at support@meetfabric.com.

The website also has a hefty FAQ section, though answers aren’t particularly comprehensive. If you have a complicated question about your coverage, you’re probably best off contacting support.

Who Is Fabric Life Insurance Best For?

Fabric’s term life insurance policies are available to qualified applicants between age 21 and 60.

Young parents get the most out of Fabric because of the suite of financial tools the company offers for family money management. If you’re recently married, share a mortgage or have young children, this company could be a good fit to help you get your financial ducks in a row.

Fabric offers term life insurance policies in all states except California, Montana and New York. None of its policies are available in Puerto Rico or other U.S. territories, or outside of the U.S.

Dana Sitar (@danasitar) has been writing and editing since 2011, covering personal finance, careers and digital media. 

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.