12/02/2024 Insurance Innovation


Inclined makes it easier for permanent life insurance policyowners to access their cash value whenever they want for whatever matters most, while simultaneously offering a new and attractive asset class to banks.

Innovation presentation

Owners of permanent life insurance invest in their policies to provide for loved ones after they’re gone, but also to take advantage of the many financial opportunities these policies offer throughout their lives. At Inclined, we call these the “living benefits” of permanent life insurance. Our mission is to give more policyowners than ever before a better way to access the cash value they’ve built up in their permanent insurance policies at competitive rates, with a substantially enhanced customer experience.

Inclined was founded in 2020 by Josh Wyss, Mark Shaw and Graham Gerlach. The three founders started the company because they wanted to simplify the process of borrowing against permanent life insurance policies and enable access to policyowners with smaller cash value balances who are unserved by the current options in the market. With more than a trillion dollars of cash value in whole life policies in the U.S. alone, and only $150 billion borrowed against those policies today, the three founders recognized a huge opportunity to modernize an industry and help more consumers enjoy the living benefits from the cash value of their insurance policies.

As whole life policy owners who deeply understood the journey, the founders had firsthand experience with the parts of the process they found to be unacceptable and a clear vision for how to fix them. Taking out a traditional policy loan from the carrier was, “one of the most painful financial processes I’ve ever been through,” according to Inclined’s CEO, Josh Wyss. It took much longer than he’d ever anticipated, there were only a few loan products available to access his cash value, and rates were not as competitive as they should have been for a cash-backed loan.

The idea of Inclines was to create a platform that connects policyowners with financial institutions in a unique marketplace that maximizes efficiency, lowers barriers to access, improves customer experience, and fosters competitive rates. In 2022, they launched the Inclined Line of Credit, a revolving line of credit designed to give customers the ultimate freedom and flexibility to get the most out of the cash value of their whole life policies. In 2023, Inclined expanded availability of the iLOC by innovating to accept more types of policies from more insurance carriers.

Unlike policy loans and third-party bank loans, the iLOC offers:

- A fast, online application process that takes about 15 minutes

- An online account management experience

- Overnight draws and payments

- Competitive rates

- The ability to establish a line with as little as $25,000 cash value

- No fees, ever

- Established lines do not report to credit bureaus

Through its proprietary technology platform, Inclined manages customer acquisition and partners with a network of banks who are attracted to this asset to originate the loans.The borrower never pays any fees on the Inclined platform, and the process of opening an iLOC is simple and efficient compared to alternative products offered in the market.

Uniqueness of the project

Permanent life insurance is a well-known investment option, but accessing the cash value has traditionally been a manual process that hadn’t yet seen the benefits of modern technology. Inclined is the first company to build a proprietary technology platform that is specifically designed for financial advisors and their clients to access that cash value as quickly as easily as possible.

In addition to the benefits to policyholders, Inclined has opened up a new asset class for banks that want to generate an attractive ROA while acquiring high-quality consumer assets at scale. There is more than $150 billion borrowed against policies in ways that are inefficient. Today, only 10% of this $150B is provided by banks. The remainder is provided by life insurance carriers.

With their lower cost of capital and the value they could bring to permanent life policyowners who want to borrow against their cash value, banks have a unique opportunity within this market. Although the customer demographics are appealing, many banks have been hesitant to offer insurance-backed loan products because the process to do so has been cumbersome and resource-intensive. Other banks have simply been unaware that this investment opportunity exists, and Inclined would like to change that.

Inclined’s technology platform is built to eliminate the time-intensive, manual workload and facilitate loans between permanent life insurance policy owners and banks who want access to this attractive asset class.

The unique benefits of this asset class include:

- Significant over-collateralization plus the power of policy assignment means banks suffer zero credit losses

- Insurance-backed loan products show strong historical performance over decades

- Banks acquire a customer segment with attractive demographic characteristics and a high lifetime-value

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