Dayforward Review: Life Insurance That Protects Your Income

Almost all parents need life insurance. A life insurance policy provides for a family’s financial needs following the death of a parent. 

However, most life insurance policies offer large lump sum payouts worth hundreds of thousands or even millions of dollars. It can be easy for surviving family members to mismanage the funds, or they may find that the lump sum is insufficient to cover their needs for the long term.

Dayforward is a life insurance company looking to solve those problems for parents. Unlike typical life insurance companies, it protects an insured person’s income. Following the death of the insured person, Dayforward pays a steady paycheck until the insured person’s youngest child reaches adulthood.

This guarantee ensures that the life insurance is adequate to meet the family’s financial needs and that it won’t run out. If you’re interested in life insurance from Dayforward, here’s what you need to know about it.

What Is Dayforward?

Dayforward is a life insurance company that offers an innovative term life insurance policy designed specifically for parents who want to replace their income until their children are grown up. Unlike traditional insurance companies, which offer large lump sums (often over $1 million) when the insured person dies, Dayforward pays a stream of income until the youngest child in the family reaches adulthood (either 21 or 26 years old).

Dayforward bills itself as a life insurance company designed by parents and for parents. The company focuses exclusively on income protection driven by children’s ages and doesn’t offer tons of fancy insurance products.

While it’s tough to value the insurance product compared to every other product on the market (the value of the payout declines over time), it's very easy to understand the product. Currently, Dayforward is licensed in 35  states and is adding more all the time.

What Does It Offer?

Dayforward offers an income protection life insurance product designed for parents. The company provides a continuous stream of income until your youngest child reaches age 21 or 26 (depending on the policy selected).

Technically, this would be a declining value, term life insurance product. But the technicalities matter less than the application of the product. Dayforward makes it easy for parents to plan for income replacement should they die before their child reaches adulthood.

Term Life Insurance

Dayforward offers term life insurance. The terms range from 10 to 27 years depending on the age of the youngest child. These life insurance policies do not build up cash value over time. Once the term expires, the policy is no longer in force and there will be no payout after the insured person dies.

Level Monthly Payments

Dayforward requires level monthly payments from the insured as long as the policy is in place. This is similar to “level term” life insurance where insured people pay the same monthly premium month in and out.

Steady “Pension” Income For Beneficiaries

Instead of receiving a lump-sum death benefit, Dayforward provides an ongoing “pension” for your family. The length of the pension depends on the age of your youngest child.

Dayforward will continue to pay your income (or very close to it) for a minimum of three years or until your youngest child reaches age 21 (or 26 depending on the option you select).

Dayforward sends the income in bi-monthly paychecks. So your family should continue to enjoy the same standard of living as before. In addition to the pension, Dayforward provides a $10,000 immediate death benefit to cover your funeral expenses.

Declining Benefit Policy

The Dayforward insurance policy is technically a declining benefit policy. Since Dayforward guarantees an income for a set time, the value of the “death” benefit declines as an insured person lives longer.

If an insured person has a 3-year-old child at the time they buy a policy, Dayforward is on the hook to pay up to 18 years of income for that insured person (if the individual dies immediately). On the flip side, if the individual lives 10 years and then dies, Dayforward only pays income for the 8 remaining years of the policy.

Typically Lower Cost Than Lump-Sum Policies

Dayforward advertises that its policies cost about 10% less than comparable “lump-sum” policies worth 12x the insured person’s income. However, the lower cost may be primarily due to the “declining benefit” outlined earlier.

Child And Income Extension Riders

Dayforward insurance policies are term policies that last between 10 and 27 years. However, if you have a child in the first five years of the policy, you can extend the term of your policy until your newest child is age 21 or you turn 67 (whichever happens first).

In some cases, insured people are also eligible to increase the amount of insurance coverage they receive without additional underwriting.

Options For Stay-At-Home Spouses

A spouse who is not earning money may be eligible for a life insurance policy worth up to half of the family’s income. This income can be used for childcare and other expenses if the family loses the parent who takes care of these critical home-based tasks.

Are There Any Fees?

Dayforward insurance has a $5 monthly fee plus a cost for each $1,000 of income insured. Prices tend to be comparable to 20-year term life insurance products worth 12 times the insured person’s income.

How Do I Contact Dayforward?

The best way to Contact Dayforward is through its customer service line at 1-888-434-0228. The responders on this line are licensed insurers who can help issue a policy to you.

You can also contact the company via email at help@dayforward.com or using the chat functionality on the company’s webpage.

The company’s headquarters is located in New York (even though the company itself is based out of Austin Texas). The headquarters address is:

1133 Broadway #525
New York, NY 10010

How Does Dayforward Compare?

Dayforward is an income protection life insurance policy. Most established life insurance companies don’t offer similar products. Typically, insurance companies offer lump-sum term insurance. A company like Policygenius can help people to find low rates on term life insurance.

Dayforward isn’t primarily competing on price but rather on the uniqueness of its product. I believe the Dayforward policy plan offers a useful insurance product for parents. Managing a large sum of cash after death could lead to a mismanagement of funds. Dayforward makes sure that the family’s income is maintained after the insured person dies. Even family-focused insurers like Fabric can't make that kind of a guarantee.

But it's important to understand that Dayforward policies become less valuable over time, in terms of the total income your family would receive if you were to pass away. With a lump-sum policy on the other hand, your family will receive the same payout no matter what -- even if you were to pass just a few days before the end of your term.

Here's a closer look at how Dayforward compares:

How Do I Buy a Policy?

Dayforward has a simple online application that can be completed in about 5 minutes. And it says that 90% of its approved applicants receive their approvals within one day.

It also says that more than 95% of its customers have bought their policies without taking a medical exam. But a medical exam may be required if an individual has health risks that require investigation.

If the individual is insurable, they will find out immediately following the application and can buy a policy online. Individuals that require a medical exam will only find out about their insurability after the results of the exam are processed.

Is It Safe And Secure?

Dayforward is a licensed and insured company. All of its products are also reinsured through Munich Re, which is a large insurance company that's A+ rated by A.M. Best. Because of the reinsurance, buying a policy through Dayforward is no riskier than buying a policy through a larger, more established insurer.

Dayforward also has several “automatic” rider options. These allow insured people to increase the length of their term coverage or the amount of income insured under certain circumstances.

Of course, to be insured by Dayforward, you will need to provide personal information including medical details. In the event of a data breach, this could put your information at risk. That said, this is a known risk each time you make a financial transaction.

Is It Worth It?

Life insurance is an extremely important product, and many parents are underinsured. If you’re a parent, or you have a dependent who requires income, you should consider buying low-cost term life insurance.

At this point, I absolutely recommend Dayforward as an insurance product to consider. The product covers income until a child is grown up and able to provide for themselves. This is a coverage plan that could make a lot more sense than a traditional lump sum plan for some parents.

Over time, I am hopeful that more companies start to develop similar income replacement life insurance plans and that Dayforward will in fact expand nationwide. Until then, parents who live outside of their service area can find low-cost life insurance companies here or compare plans in minutes using an online marketplace like Policygenius.

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