Infineo Tokenizes $125 Million in Life Insurance Policies

Blockchain startup Infineo has made significant strides in the financial sector, announcing last week that it has successfully tokenized $125 million worth of life insurance policies in just over three months since its launch. This groundbreaking initiative leverages blockchain technology to address a critical gap in the insurance industry: ensuring beneficiaries are notified in the event of a policyholder’s death.

While these tokenized policies are not new, they represent existing life insurance policies that policyholders have voluntarily uploaded to Infineo’s platform for tokenization. At its core, the current purpose of the platform is to guarantee that beneficiaries are alerted when the policyholder passes away. However, Infineo has much larger ambitions, including plans to develop a secondary market where these tokenized policies can be traded and to support lending by using life insurance policies as collateral.

Addressing a Long-Standing Issue in Life Insurance

A key motivation behind Infineo’s solution is to fix a long-standing issue in the life insurance industry: beneficiaries not being informed of their inclusion in life insurance policies. Historically, life insurers have faced criticism for failing to sufficiently notify beneficiaries after the policyholder’s death. A 2016 report by USA Today revealed that insurers were using the Social Security Death Master File to stop annuity payments, but were allegedly not using the same data to alert life insurance beneficiaries. That same year, major life insurance companies agreed to pay $7.4 billion in unclaimed benefits to Florida’s Office of Insurance Regulation, with two-thirds going directly to beneficiaries and the remainder being classified as unclaimed property.

Infineo’s platform addresses this issue by allowing policyholders to upload their life insurance documents and input the contact details of beneficiaries. A hash, or fingerprint, of the policy is then recorded on the Provenance blockchain to create a verifiable record. Importantly, personal information remains secured in an external encrypted database, ensuring privacy and security. While the platform currently doesn’t interface directly with insurers, future developments could include mechanisms to verify policy changes with insurance companies.

A Glimpse into Infineo’s Business Model

For now, Infineo offers its death notification service for free. However, the startup aims to generate revenue through its upcoming secondary market and lending platform. The introduction of a secondary market would enable policyholders to sell their tokenized life insurance policies to interested buyers, creating liquidity in a traditionally illiquid market. Additionally, the startup plans to explore the use of life insurance policies as collateral for loans, offering policyholders another avenue for leveraging their assets.

“The minting of $100 million worth of life insurance policies on Provenance Blockchain is not just a technological breakthrough but a testament to our commitment to democratizing access to one of the most stable financial instruments,” said Cole Snell, founder and CEO of Infineo. “This achievement underscores life insurance as a leading use case for real-world asset tokenization, driving both innovation and growth across the industry.”

Blockchain’s Role in Life Insurance

Infineo isn’t the first to explore the idea of using blockchain for beneficiary notifications. The Institutes RiskStream Collaborative previously trialed a similar concept with its Mortality Monitor use case, though its funding model relied on contributions from insurers. RiskStream’s solution made more sense for insurers, given that they are the primary record holders of beneficiary information.

However, Infineo’s approach adds value as it focuses on the policyholder, rather than insurers, allowing individuals to manage their life insurance policies independently. Critics argue that a conventional database might suffice for the current use case, as Infineo does not serve as the primary record holder. But as the startup moves toward establishing a secondary market and lending platform, blockchain technology will become increasingly vital, especially in verifying the authenticity of uploaded policies and ensuring secure, transparent transactions.

The Future of Life Insurance Tokenization

Infineo’s success in tokenizing $125 million in life insurance policies highlights the potential of blockchain technology to disrupt the life insurance sector. By offering a transparent, secure way for policyholders to manage their assets and ensure beneficiary notifications, Infineo is creating new opportunities for policyholders and beneficiaries alike. As the company prepares to launch its secondary market and lending services, it is poised to further transform the life insurance landscape, offering liquidity and innovative financial tools previously unavailable in this space.

With blockchain technology at its core, Infineo’s platform is reshaping the way life insurance policies are managed, traded, and leveraged, marking a significant step forward in real-world asset tokenization.

Photo by sydney Rae on Unsplash

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