Wealth technology firm Nitrogen has launched a new AI-powered insurance tool for advisors to calculate coverage needs of a client based on their broader financial plan.
Nitrogen’s new Insurance Center analyzes a client’s household, life insurance, retirement income projections, and long-term care details to calculate a coverage number on a scale that compares the client's existing coverage against their calculated need. It also provides a best interest assessment for annuity coverage.
A score between 80 and 120 is typically considered on track, however Nitrogen says a score below 100 could prompt an advisor to discuss potential insurance coverage gaps with that client, whereas scores above 100 could help flag excess coverage that the client is paying for but does not need.
“[Insurance] products are complicated and can be very salesy. So we just wanted to create something that made it much easier for a client and an advisor to have a conversation about insurance,” said Nitrogen CEO Dan Zitting. “It's never super easy to talk about things like what happens if I die, those sorts of things. The Coverage Number is a very simple way to understand, as compared to your financial plan, are you underinsured, overinsured—what kinds of insurance probably make sense for you.”
A study released last year from LIMRA found that adults aged 30 and younger overestimated the median cost of life insurance polcies by about 10 to 12 times more than its true cost.
Zitting told InvestmentsNews that among the “tens of thousands” of advisors using Nitrogen’s existing products, about 80% deal with insurance. LPL Financial is among the large brokerages to approve Insurance Center usage for its network of advisors, which Nitrogen will sell as a standalone service or give advisors the option to add-on to their existing plans for Nitrogen products.
“The risk number is agnostic, it's not good or bad to be an 80 or a 20. It's not recommending sales, we want alignment with the client's best interest,” said Justin Boatman, CMO and head of product strategy at Nitrogen. “We're not afraid to say, even if someone's goal is to sell insurance to somebody, sorry the [client] assessment says they're well covered or over-covered. This is not going to bend toward selling someone insurance that they don't need.”
Nitrogen (formerly Riskalyze) was founded in 2011 and rebranded to its new name in 2023 with Zitting replacing founder Aaron Klein as CEO. Insurance Center is powered by Nucleus, an AI agent from Nitrogen that first launched in February as tax support for advisors.
Insurance Center was announced by Nitrogen at the LPL Focus event for advisors being held Aug. 9 to 12 in San Diego. Nitrogen also announced new Nucleus Account Opening to automate investment proposals to new accounts, with Schwab becoming Nitrogen's first account opening partner.
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