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Saturday, May 17, 2008

Lifenet to offer 30% cheaper insurance online

Staff writer

Lifenet Insurance Co., a newly established online life insurer, said Friday it will start selling polices Sunday via the Internet at rates up to 30 percent cheaper than those offered by major life insurers.

Lifenet Insurance is the second to enter the online life insurance business after SBI AXA Life Insurance Co. opened for business April 7.

Since Lifenet does not employ sales personnel — the main sales tool for life insurers — and focuses only on basic life and medical insurance policies, it can cut costs and offer lower premiums, President Haruaki Deguchi told reporters.

"We want to offer insurance products that are the easiest to understand, the simplest, cheapest and the most convenient," said Deguchi, who worked at Japan's biggest insurer, Nippon Life Insurance Co., for 35 years.

For instance, if a 30-year-old man buys a 10-year, ¥30 million insurance policy, the monthly premium will be ¥3,484, which the company claims is about 20 percent to 30 percent cheaper than big-name insurers and even cheaper than its Internet rival.

To ensure cheaper premiums, Lifenet does not offer a dividend — which many life insurers offer clients in return for investing their money — or a refund when a client terminates a contract.

"Our policy is that by asking for only a small amount of effort on the client's part, we are able to slash a large amount of personnel costs," said Vice President Daisuke Iwase, who also attended the news conference.

The company also offers a call center to help guide customers through its online application system.

According to a Lifenet estimate, the online life insurance industry will expand to 1.04 million contracts in 2012, up from 100,000 this year. It aims to increase its target to 150,000 or 200,000 contracts in the next five years and plans to see a profit within 10 years.

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The Japan Times

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