Bitcoin (BTC) is gaining recognition as the ideal financial asset to complement a life insurance product, as explained by Meanwhile CEO Zac Townsend. In an interview with Axios, Townsend elaborated on how his life insurance company leverages BTC as its exclusive currency and unit of account instead of traditional fiat currency.
“We accept all our premiums in Bitcoin. We pay all our claims in Bitcoin,”
One of the biggest advantages of incorporating Bitcoin into their operations is that it eliminates the impact of Bitcoin’s price volatility. Townsend remarked, “Because all our assets and liabilities are in Bitcoin, the price of Bitcoin doesn’t matter.”
Bitcoin, known for its volatility compared to traditional currencies like dollars or euros, is considered a risky choice for businesses to adopt as their internal currency or as an asset on their balance sheets. However, Townsend believes that the Bitcoin community’s “culture of HODLing” makes it an attractive option for a life insurance product. Holding Bitcoin through volatile periods and utilizing it as a long-term savings vehicle aligns with the Bitcoin ethos.
Recent data supports the notion that saving in Bitcoin over the long term has been profitable, regardless of the starting point in its history. After Bitcoin’s surge to $36,000 on Thursday, many individuals who held onto Bitcoin long-term realized significant gains. This reinforces the potential appeal of a life insurance product tied to Bitcoin.
The Advantages of a Bitcoin-focused Life Insurance Product
In the realm of estate planning, Meanwhile’s Bitcoin-based life insurance product provides customers with attractive tax advantages. Townsend explained that if a customer contributes 10 BTC to Meanwhile, their beneficiary could receive 20 BTC upon the customer’s passing, although this is an approximate estimate.
Currently, customers are required to buy-in with a minimum of 5 BTC (equivalent to approximately $183,000) for a term of 5 years. Meanwhile maintains a credit risk of 3% – an amount that exceeds the necessary coverage for death benefits.
Furthermore, Townsend mentioned that customers can borrow against their benefits without incurring taxes over time, making the Bitcoin-focused life insurance product even more appealing.
Growth and Future Prospects
Meanwhile recently completed a successful fundraising round, raising $19 million across two funding rounds, with participation from prominent figures in the tech industry like Open AI CEO Sam Altman. The involvement of Bitcoin-focused fund Stillmark pushed the funding to just over $20 million. Townsend noted that this investment resulted in a valuation of $100 million for Meanwhile.
Despite its small team of seven individuals, Meanwhile aims to scale efficiently by implementing artificial intelligence for specific tasks, including customer service. Townsend expressed confidence in the company’s ability to endure, stating, “We have already worked on policies right now that are going to outlive me.”
