A new product category is emerging across the prop trading industry: challenge insurance. Several forex firms and futures prop firms have begun offering optional add-ons that reimburse partial or full evaluation fees if a trader fails their challenge. FundCoupon has tracked at least seven firms introducing some form of fee protection or refund mechanism in Q1 2026.
How Challenge Insurance Works
Challenge insurance typically adds a small premium (5–15% of the base evaluation fee) to the checkout price. In exchange, if the trader fails the evaluation, they receive a refund voucher, account credit, or outright cash refund up to the amount of the original fee. Terms vary significantly by firm, and FundCoupon recommends reading the fine print carefully.
- Partial refund model: Reimburse 50–75% of fee if challenge is failed after at least 5 trading days
- Full refund model: Complete reimbursement if trader fails on a rule breach (not voluntary quit)
- Voucher model: Failed fee converted to credit for a discounted re-attempt
- Loss insurance model: Covers losses exceeding a certain threshold during evaluation only
Challenge insurance shifts the risk calculus for new traders — but always check whether the insurance payout is cash or credit before buying.
Which Firms Are Offering It?
Lark Funding's Refund Protocol (covered separately by FundCoupon) was one of the first formal insurance-style products. Since then, Funded Trading Plus, Nordic Funder, and several smaller operators have introduced their own variants. FTMO (ftmo.com) has not yet announced an insurance product, though speculation on social media suggests a similar feature may be in development.
The Economics Behind Insurance Products
For prop firms, insurance products serve a dual purpose: they increase average order values at checkout while also reducing refund disputes and negative reviews when traders fail. From a business model perspective, challenge fees are already highly profitable for firms — the insurance premium adds marginal revenue with minimal incremental cost.
- Average challenge fail rate industry-wide: approximately 70–85% of first attempts
- Insurance premiums are typically priced well above actuarial cost for the firm
- Traders who purchase insurance are statistically more likely to complete the challenge
- Firms benefit from improved Trustpilot scores as failed traders get refunds rather than writing bad reviews
Should You Buy Challenge Insurance?
The value of challenge insurance depends on your confidence level and risk tolerance. If you're a new trader attempting a first-ever evaluation, an insurance product that refunds your fee may provide psychological comfort worth the premium. Experienced traders with high pass rates should focus on finding the best challenge price via FundCoupon rather than paying an insurance premium.
Explore all verified prop firm deals and compare challenge pricing across forex firms at FundCoupon. We list all active insurance and refund offers alongside standard discount codes.
FundCoupon Verification Note
Promotions, rules, and checkout terms can change. Verify the current offer and evaluation rules on the official firm website before paying for any challenge.