for June 2020
Here is a quick run-down on what you will find in this bulletin:
These topics will be dealt with in more detail throughout this
Term Life Insurance Renewals
Compulife is one a very few third party quoting platforms, and is one of an even smaller group of those, which offers our customers (agents and agencies) the ability to see renewal premium costs for term life insurance products. We also give you ways to compare those renewal premium costs.
During this past month we published a midmonth bulletin that was designed to "grab" our customers' attention. The reason was quite simple. We discovered that for a period of almost 3 months we continued to quote two companies' term life insurance products showing the previous renewal system which offered a level face amount and increasing ART renewal premiums. Unfortunately the companies had changed that at the end of January and neglected to mention that change to us. In the example given in the midmonth bulletin, the face amount for the quote we first saw decreased the face amount to 5% of the initial face amount. In that particular example the face amount dropped from $1m to $50,000. Not something an unsuspecting widow would want to discover after it happened, and after the insured suddenly died.
Clearly we were not the only folks ignorant about the change. It was brought to our attention by a subscriber who, like us, was unaware of the change until they examined a newly issued policy. He was completely taken back by what he found, and once I got a copy of the renewal premium schedule from that policy, I went into panic mode. I gutted the reference to renewals from those products and placed a midmonth update on the web, all within a couple of hours. I worried about how many sales of those products had been made accompanied by a quote from Compulife showing a level face amount continuing after the level period. I wanted to make sure that our customers were made aware of the problem and so my bulletin was very LOUD.
To summarize, we do say at the bottom of every quote (and we mean it):
NOTE: Every effort has been made to assure the accuracy of this information
but we cannot guarantee accuracy and are not liable for errors or omissions.
We put that on each quote because we are human and mistakes can and clearly do happen. The sad part about this one was that no one caught it for over 2 months and we were not informed by the company of the change until we asked about it.
In response to the bulletin I got this email from a subscriber:
Bob, I know you must be fielding a lot of attention regarding your "updates" on AIG. I emailed you twice last week too and here is another.
While you are focused on educating the field force about AIG, I think you should share your opinion about other carrier product designs that function like AIG.
Two carriers to start with could be Protective Life and Lincoln as both 'feature' a similar product design on one of their term products with the face amount "plummeting" so to speak, at the end of the level term period. Whether it is a "drop off the cliff" or a less significant drop that is levelized for a period of time or simply begins to act like a decreasing term plan, how many agents know and how many consumer care or did they just sell and buy the cheapest term for the period chosen. How will the insured/consumer/their family feel if the insured is convalescing at the end of the term period and when beyond the conversion?
This face reduction design is not new. And in my opinion, it is a consumer/agent "issue" waiting to happen. You already have agents telling you they didn't know about AIG's even though you have seen the home office documentation... I know "no one" ever reads all of that though or even the policies as evidenced by a change made in January just coming to some of their attention.
To their credit, when Protective introduced their product they did a whole mail out campaign around "no surprises in your mail box" sending out little squishable "stress" mailboxes and postcards over and over again with the marketing focus on having a decreasing face amount instead of increasing premium after the level term period as a benefit to the consumer. YET agents still don't seem to realize what they sold or are still selling.
The term life sale is still too often who has the cheapest premium, otherwise terminal illness riders, living benefits and even conversion opportunities would be more readily sold in the market place.
With Compulife and other comparison engines term is commoditized and not based on "value" way too often. Embarrassing as it is, I have "lost" a term sale over 16 cents a month b/c of comparisons and consumers who "don't care" about anything but price. That was a haven life product that beat everyone else by 16 cents. The fact it offered no conversion privilege meant nothing... just it was 16 cents cheaper.
So while you are at it I would like to see you address nonconvertible term plans offered in particular by haven life and then hit on some of the conversion time limitations on products such as for 5 years only or cutting off conversions prior to the end of the term period or before the traditional age 65. Afterall, education of the agent and consumer is important. There is a lot of variation in term plans and even in some cases in the multiple plans offered by the same carrier.
As a GA and as an agent, I applaud you championing the education of the consumer and field force alike. Maybe you can help put value back into term sales beyond the price. This is not an "AIG" thing, it is a market thing.
The agent who wrote the above email is quite right. In fact there are now about 4 companies in total that offer term or term-like products that do not have level face amounts after the initial level period.
In fairness to Protective Life, they have two product lines, one which behaves as is explained above (it's the last of the term-like, no lapse UL's still in the market) and the other which offers a traditional level face amount after the initial period. Regarding that product, Protective has introduced a grading calculation into the renewal premiums which makes their ART rates after the intial level period much more attractive for a handful of renewals. And yes, you can compare those renewals with other companies using our agent software. But it's also worth pointing out that that product has a conversion period that ends at least 2 years before the end of the level period and for level premium periods longer than 20 years, it ends after 18 years (and never exceeds age 70). So, one thing that is positive, another that is negative.
Hard to tell the players without a program? Compulife is the program that makes it easy to get the basic facts. I don't know how anyone keeps up with this stuff without Compulife.
Back to renewal premiums. Products that do not offer level face amounts after the initial level premium period are shown in our software as ONLY renewable for the initial level premium period, which is why you will not see renewal information beyond that period. If the face amount starts going down, our quote ends. If you want to see the roller coaster ride from there, you will need a life company illustration.
As to convertibility, I've been in thie business for 40 years and I have watched the back and forth debate over that issue and it is one of those things where agents will have to agree to disagree. We show the period of convertability and that's all. Beyond that you will need to make up your own mind about what you emphasize to your customers. It's not our job to take a position one way or the other.
And finally, I can only respond to the well written email by saying what I say to consumers at our public website term4sale.com:
While initial premiums are a very important part of comparing term, the fact is that the cheapest product is not always the best. COMPULIFE recommends that you speak with an agent in order to investigate which products and companies would be best for you.
To obtain a list of the 3 COMPULIFE subscribers selling insurance in your area, use one of the "How to Purchase" buttons in the quote results.
Once again, the lowest cost policy isn't always the best policy. There are other differences that you should consider before choosing the company and product that is best for you. Many of those other differences are subjective. This means that they cannot be compared by simply placing values side by side on a piece of paper, as we can do with premiums.
COMPULIFE Software cannot advise you with respect to specific products or how they are different from others. COMPULIFE does not have a license to sell life insurance. COMPULIFE produces and sells a much more complex term comparison software program to over 3,000 life insurance brokers and agents throughout the United States and Canada. Your best course of action is to locate a properly licensed agent who uses the COMPULIFE program.
And if you are a life insurance company reading this, and provide information to Compulife about your products, and want to avoid attention in our midmonth bulletins, please don't skip over changes to your products like this. They are IMPORTANT.
Some Good News On the Legal Front
After some bad news in March 2018, with a legal decision that was completely bewildering, we had a much different 3-0 result in the 11th Circuit in Florida. You can read more about that here:
We are very grateful to our lawyer who has worked his butt off on this case, and who has demonstrated great perseverance in the face of the initial loss which I think bewildered him more than us. It turns out he was right. Now it's back to the lower court to see if we can find some justice.
Low Interest Rates Are A Problem
We are getting very close to "last call" for some no-lapse UL products that are very competitively prices, and which will not be as completitively priced much longer. We have already processed a large number of price changes for no lapse UL products (none of those rates went down) and there are still more coming up.
Regarding price inceases, we told you in March in the midmonth bulletin:
Compulife has just been notified by one of the
life insurance companies selling 30 year term,
that due to the ultra-low interest rate environment,
and the current uncertainty about the future of
interest rates, that they intend to temporarily
cease offering 30 year term as of mid-April.
When that information is public, we will let you
We have no idea how long this embargo will last,
or if any other companies will follow suit, but
now would be a very good time to let your customers
know that low interest rates may very well lead
to price increases for longer level term products
and no lapse GUL products. This is definitely
an excellent time to buy 30 year term and longer
What I do think is that it would be smart to start communicating the impact of this to your clients and prospects using it as an opportunity to reinforce the value of recent purchases of competitive term life, and the need to get longer level term while prices are still low. I realize that some insurance buyers are hurting financially and that may not be possible, but for those with the means now is a good time to buy. Prices are not going to be lower for a long time.
Term4Sale - API Version
We are SOOOOOO close.
You can check out the new API running at term4sale.com by clicking on the link:
There are a couple of functions not yet working, and so work will continue until the NEW Term4Sale - API version is identical to the old/existing term4sale.com. Once we are satisfied the new is doing what the old was doing, we will make the jump.
One of the changes you will note with the API version is that the number of results have been kicked up to 75 from the current 25. Now that we have better control over hackers trying to worm their way into our system, and use it without permission or authorization, and that the system will notify us of unusual use, we are going to give visitors to the site more results to see and compare. API users will also have the ability to show more results.
For those of you who are listed at term4sale.com, we will be doing a press release to announce the changeover, and the increased number of results. Hopefully, over time, that will build traffic back up and we will see better search engine rankings than we have had for the past year.
API customers who purchase the option, will be given "starter software" that looks much more like this:
That page will incorporate the same foundational access to the API that you see at Term4Sale - API version. The difference is the work that has been done to customize our version of the API that you see at term4sale, versus what you might choose to do for your version. The point of doing the Term4Sale - API version first, was to ensure that we ourselves went though one example of a more complicated implementation, to ensure that the structure we have set up, could easily transition from simple to more complex functionality without undue effort or complications. During the process Jeremiah and Chris have been setting up a VERY slick system of documentation that should make implementing the API as simple as possible.
To summarize how the API works, the server that is operating the API service will be receiving and processing requests coming from other servers. Before processing the requests, the API checks the request against a database that determines if the request is legitimate and authorized. The database "counts" and records the request (for the purposes of volume/billing). The database will notify Compulife if the request is unauthorized or if the request is a series of requests that represent unusual or peculiar volumes. If the request is determined to be legitimate, the API communicates that request to the Internet Engine which is on the server where the API database is located. Once the quote results have been obtained from the engine, they are then assembled into a file format that uses JSON standards, and ships that back to the server/site that made the original request.
While there is a lot going on in this process, results (as you can see by trying it) are virtually instantaneous. Having said that, it will be (milliseconds) slower than having the Internet engine on your own server.
We Maintain The Product/Rate Files
If there is anything Internet Engine users do not like it is that they must transfer company and rate files from their PC to their servers. Compulife does NOT touch the customer's server. Personally I do all this updating of servers with data files at Compulife for our Term4Sale site, Web Quote options and the Compulife Basic product. None of this is hard to do and with modern internet connections it can be done in less than a minute. But it's a job that must be routinely done and some subscribers have trouble getting someone in their operation to do it with regularity. If you let the company and rate data get out-of-date, it can lead to problems.
With the API function that will all be looked after by Compulife (just one more server that we update). As I post monthly and midmonth updates to the web for our PC software, I obtain those same updates and transfer the necessary files to the various servers that we have. Once again, it's not hard but it must be regularly done and I am nothing if not regular.
API - You Will Still Need Someone To Do Programming
For those who want an easy/simple solution to add a quoting system to their website, the web quote option is still the simplest way to put quotes on your website. Most subscribers simply make a "iframe" on the web page (or pages) where they want the quote option displayed, and then put the link that we give them in that frame; DONE.
The API function will give you some rudimentary page examples, but you will still have to design and format how you want that to look and function on your website. And building web pages is "programming" and either you know how to program or you don't. And if you don't you will need to find someone who can do that programming.
Typically, when a prospective buyer of the Internet Engine inquires about obtaining the engine, we explain it is a CGI-executable program that they will need to placed into the cgi-bin of their server. We explain that the package we ship comes with sample/example pages and that whoever is tasked with setting this up needs to use our example pages and get the thing working on their server WITHOUT any modifications to those pages. The important first step is to get it functioning and producing quotes.
This will be the same process with the API, however it will not require any effort to make sure that the server is set up with the right environment to run the CGI-executable, because all of that will be handled on our end. The initial objective will be to place the sample pages we provide on your server, and ensure they are working as in this example:
After that, the pages that obtain client information and display quotes will be on your server and you will need to have someone design and create the solution so that it works the way that you want it to. And there the devil is going to be in the details. What we have noticed over the past few years is a growing number of programmers, that agents have retained to do their sites and who want to implement our internet engine, are being told by those programmers that they need an "API". Those programmers may not have worked with a CGI executable before and seem to have no interest in learning how to do so (even though it is easy). Some actually INSIST they can only work with an API.
Here's a little perspective as we roll this out. I believe that many programmers who tell our customers they need an API were using that as an excuse, not an objection. Programmers who are not willing to follow our well laid out instructions to set up the internet engine on our customer's server, and work with that, will more than likely balk once they get our new API package. Why? Because these same folks are NOT very capable programmers. They can design pages for websites, but when it come to interfacing those pages with internet programs they have not worked with before, there is a learning curve and some programmers stall out because it's something they have not done before.
I have often told prospective customers who obtain our Internet Engine for the first time, that they need to INSIST that the web programmer they have hired, put the engine and sample pages on their sites, WITHOUT making ANY changes and get the quoting system working first. If the programmer cannot accomplish that simple task, which should take no more than a couple of hours, then they need to shop for a new programmer. The advice I give to new customers of our API option will be the same. If the web programmer can't get the basic API sample page functioning on your site, then you can assume that they really don't know what they are doing.
As an aside, some wonder why Compulife markets to new customers using a 30 Day Free Trial and a 4 month free subscription for those who do a tutorial. I consider the process an "aptitude test". Is the prospective life agent smart enough to follow instructions? Some are not. We want to know that because we don't want those folks as customers. Through the years I have had some agents who insist they don't want to do the tutorial, they just want to buy the software. It seems like anytime in the past that we let someone buy the program without going through the tutorial process it ended up badly. Either they demand we refund their money or they complain that the program is not something they use. All that is sorted out by the tutorial and the 4 free month reward. In a similar way our Internet Engine and API technologies are great aptitude tests for internet programmers. If they can't work with the technology, you don't want them working on your website.
To summarize, the new API will not be a "programmer in a drum". Web pages will not program themselves and you will need someone to do that. And, just as with the Internet Engine, none of Compulife's existing staff is available to do custom work for customers.
The API service will be volume based. Here's a tentative pricing schedule:
1,200 or less quotes per month - $396 per year (includes Compulife Basic)
6,000 or less quotes per month - $780 per year (includes Compulife Personal Use)
30,000 or less quotes per month - $1,200 per year (includes Compulife Standard Use)
All of these prices are less than the current cost of the Internet Engine, which is $1,500 per year (including Compulife Standard Use). The price for the engine will remain the same for customers doing 60,000 or less quotes per month. Any customer doing over 60,000 quotes per month will have the price of the Internet Engine increased to $2,200 per year (in addition to their Standard License of $300).
Some current subscribers to the Internet Engine, who are doing smaller volumes of quotes, will probably want to switch to the new API version of the software because their volume is relatively low and they will save money with the API version of quotes. The API customer will still be able to produce the very same quotes that they are producing now and still be able to fully customize their user interface and quote functions. Instead of delivering pages to the customer's website, the API delivers raw output: company information and premiums. The user takes that data and imbeds it into their web pages and systems.
The other advantage of the API over the Internet Engine is that Compulife will take over the updating of rates and software, which means the user has less maintenance. The downside is that quotes will be coming from our server, and if our server goes down, so do your quotes. Having said that, reliability seems high. We have not had many issues with the web quote option for customers, and so we hope the same is true for the API (I should add that I don't trust the internet).
Those doing over 30,000 quotes per month will need to buy the Internet Engine. First, we don't want their high volume use dragging down our server performance. Second, anyone doing that kind of volume needs to pay for the server that they are running the quoting software from, and depending on volume they can get whatever type of server service they want/need, from shared hosting to stand alone equipment.
Our Current Programming Plans for 2020
The following is the current order for new work that we will be doing in 2020:
Complete API Introduction
Overhaul Of Current Product Data Files
Introduction of New PC Version: CQS.EXE
Introduction of Compulife Basic Plus (with Pick 12)
Anyone with questions about any of these upcoming projects can call Bob Barney to discuss:
Please don't email me essay questions, just call. If I'm not in, email me your phone number, I'll call you.
These planned objectives will easily consume our programming time during 2020. The good news is that once the product data files have been converted, and we have introduced the new CQS.EXE, and upgraded our internet engine to use the new data files, Compulife will be turning it's full attention to our web based, Compulife Basic software. The long term goal is to have a web based product that does everything our PC based software does.