What Is Fabric

By J.R. Duren
HighYa Staff Published on: Mar 14, 2018

Fabric is a life insurance agency that provides two types of policies: accidental death and term.

Their easy-to-use interface is what makes the site interesting; they claim you can get an accidental death policy in as little as two minutes.

Fabric doesn’t actually provide the policies; they’re a broker, which is like a middleman who connects you with a life insurance company who provides the policy.

The company who provides Fabric’s policies is Vantis Life Insurance, a firm based in Connecticut who merged with fellow insurance company Penn National in 2016. Vantis has been in business since 1942.

The company carries an “A” grade from credit-rating company A.M. Best. An “A” means that A.M. Best believes that Vantis is in an excellent position to pay out your claim should you pass away. In other words, the company’s finances are pretty sound.

Fabric’s founders are Adam Erlebacher and Steven Surgnier, a pair of fintech entrepreneurs who founded banking app Simple.

As we mentioned earlier, Fabric offers accidental death and term life insurance. Fabric names these two products “Fabric Instant” and “Fabric Premium,” respectively.

To understand if Fabric is the right choice for you, you’ll need to know how accidental death insurance and term life insurance differ, what Instant and Premium offer and how those options compare to what’s already out there.

We’re going to cover each of those areas in this review, sprinkling in our own insight along the way.

At the end of our review, we’ll wrap up with a quick section about what Fabric’s pros and cons are and who it might be good for.

Editor’s Note: Fabric’s insurance offerings are one of three facets of what Fabric does. The other two are wills (free) and a blog that focuses on helping new parents with raising kids and understanding finances.

How Life Insurance Works

Life insurance policies offer a sum of cash to a beneficiary (spouse, child, relative, etc.) when you die.

You choose what that sum is and, based on that amount and your health, your life insurance company will calculate a monthly premium.

An example would be a $300,000 life insurance policy with a monthly premium of $30.

The Difference Between Accidental Death and Life Insurance

In a very basic sense, accidental death policies cover you if you die by accident while term life insurance policies cover accidents and pretty much anything else. Both policies have their exclusions, which we’ll talk about in a few minutes.

Fabric’s website promotes their accidental death insurance as a product designed for people ages 25 to 44.

In fact, when they make mention of this on their “What’s Covered” page, they include a footnote that refers to a CDC vital statistics study that says accidents are the leading cause of death for people between 25 and 44 years old.

The study is 100% legitimate, but what you might find interesting is that the CDC says that, in 2015, about .004% of all deaths of people between 25 and 44 were because of accidents.

So, while accidents are the leading cause of death for Millennials and those born at the tail end of Generation X, the overall death rate by accident is really low.

Of course, that’s the nature of insurance: protecting yourself from the just-in-case.

The overall death rate of people aged 25 - 44 is more than three times the accidental death rate.

To cover those situations – which includes illnesses – Fabric offers their Premium insurance, which is meant to cover more than just accidents.

Premium is more expensive than Instant, which is something we’ll point out as we delve into each product in the following sections.

Fabric Instant

This option is an accidental death policy that only covers certain deaths that are accidental.

Here’s a paragraph from Fabric’s site describing the types of things that would be considered accidental: “unexpected events like car, bike, and commercial air crashes, fire, even murder.”

They go on to say that health-related deaths would not be covered under the policy. The example they gave was that of a heart attack. They also noted deaths by riot are not included, either.

It’s meant to be a policy designed for younger people who want peace-of-mind coverage just in case they die by accident. Whereas a term policy can cost you as much as $35 a month for $500,000 of coverage, Fabric says their Instant policies are offered at the following price/coverage tiers:

  • $6/month for $100,000
  • $15/month for $250,000
  • $30/month for $500,000

Normally, it’s the healthier, younger people who get the best rates. But, because this plan is only covering accidental death, an insurance professional with whom we spoke said your health doesn’t usually have an impact on your cost, mainly because you wouldn’t be covered if you got sick and died.

That doesn’t mean you’ll avoid exclusions, though. Fabric notes that what’s covered and what isn’t covered is something that varies by state.

Pennsylvania has one of the youngest populations in the country, so we checked Fabric’s exclusion list for the Keystone State.

Military-Related Deaths Are Excluded

If you’re a member of the military, you can get a Fabric Instant policy. However, know that any death resulting during the following three scenarios won’t be covered:

  • Anything military-related
  • Death during active duty
  • Death during maneuvers or training exercises

Suicide Isn’t Covered

Deaths by suicide are not considered accidental and, as a result, Fabric won’t cover them, whether you were sane or insane at the time of death.

Rioting Won’t Be Covered, But Protecting Yourself From Rioting Will

This section is interesting because it’s nuanced – if you die during a riot and you were a rioter, you aren’t covered.

However, if the angry mobs are coming for your home and you go out to defend your property and life, you’ll most likely be covered, Fabric’s fine print says. They also note that police officers and firemen who die trying to “maintain or restore law” will be covered.

Alcohol-Related Deaths Aren’t Covered

Fabric notes that if your death is caused by the fact that you were at or beyond the legal blood-alcohol limit, your death won’t be covered. The same rule applies to anyone under the influence of marijuana, hashish, narcotics and controlled substances.

According to Fabric, the exception applies unless the drugs involved were “administered on the advice of a physician and taken as prescribed by such physician.”

In other words, there’s a good chance you won’t be covered if you die in a car accident while driving under the influence of a prescription that prohibits you from driving within a certain time of taking it.

Be sure to read through your policy documents to make sure you’re clear on what is and isn’t covered when it comes to alcohol and drugs.

Fabric Premium

The company markets Premium as the plan you graduate to after using your accidental death plan. However, you can buy it whenever you’d like; you don’t have to buy Instant first.

The term policies Fabric offers are 20 years in length and have coverage levels as high as $5 million.

The Premium plan has far fewer exclusions than Instant. In fact, there are only two: suicide and misrepresentation.

You won’t be covered if you take your own life and, according to their fine print, if “if you misrepresent yourself on your application.”

In other words, be completely honest on your application. If you lie about any of the information, there’s a chance you won’t be covered.

You might be wondering why the plan has no health-related exclusions. Well, part of it is that you’re paying more per month and therefore are getting more comprehensives coverage.

But the other reason why they don’t have any health exclusions is because they perform a blood test before offering you the policy. This test reveals any pre-existing conditions and illnesses and also gives Fabric’s partner, Vantis, an idea of your overall health.

The person administering the test will come to your home and draw blood. Sometime after that, Fabric will let you know if you’re getting a policy and what your premiums will be.

Another important factor is whether or not you smoke, since smoking usually increases the chances of sickness and death.

Basically, the healthier and younger you are, the lower your premiums will be. Smoking and other factors can drive up your rate. These are general principles, though; rate calculations take many more factors into account.

A Disclaimer About Life Insurance Policies

Your insurance company will have its own set of limitations and restrictions on your policy, according to what state law dictates.

Make sure you read over the limitations, restrictions and exclusions very carefully, taking note of anything you don’t understand so you can ask about it later.

There may or may not be rules about when the policy pays out; there might be exclusions for deaths that happen within a certain amount of time of the policy kicking in.

Also, some policies will give you the option of using some of your life insurance payments/funds to invest with the company so you can build wealth while paying into your policy.

How Fabric Compares to the Competition

Ethos is a site very similar to Fabric. Both focus on giving you an online experience via a simple application that takes just minutes to complete.

Ethos, however, offers term life insurance and permanent life insurance, the former being something you pay for over the course of 20 years and the latter something you commit to your whole life.

Term life insurance policies are usually cheaper because they usually end before you get old enough to where your chances of death get higher and, therefore, your premiums rise.

Permanent policies are lifelong and usually cost more per month they’re accounting for your older years.

Also, Ethos uses Assurity, an insurance company that’s been in business for more than 100 years and has an A- rating with A.M. Best.

If it’s an accidental death policy you want, Fabric is the way to go. If you’re looking for term life insurance, use both sites to get a quote and figure out which policy works best for you. Ethos is the choice if you’re looking for permanent life insurance.

Our Final Thoughts About Fabric: Pros, Cons and Who It’s Good For

We believe that Fabric’s insurance policies are a good fit for someone who doesn’t want to deal with an insurance agent in person and wants a simple way to get a policy.

As far as positives go, we think that Fabric, along with other companies like Ethos, make life insurance easy to get. Their site is straightforward and accidental death policies can be obtained in just a few minutes.

However, this strength is also the site’s weakness. Insurance policies are complex products and it would really benefit you to sit down with a life insurance agent so you can ask questions and get answers before making your decision.

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