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Update News for May 2008
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 bulletin.
During April we were able to complete work on our forms retrieval software. We have begun the process of developing custom web sites for life insurance companies that will give them our forms technology as an alternate version (at the very least backup version) of whatever technology they currently have to provide forms to agents. As we have said over and over again, this technology is FREE to any life insurance company that provides its forms to Compulife for use in our forms library.
At this point Compulife is turning its attention to making some changes that we need to accommodate our Canadian subscribers.
Critical Illness (CI) insurance has become a fairly popular product line in Canada and we have now come up with a design that will allow CI comparisons to be added to our software. Comparing Critical Illness insurance is not as simple as life insurance and so we are including parts of the Canadian bulletin to help you understand how we are going to deal with that.
Like any change to Compulife's software, the change has the ability to be employed for one country or the other, or both. For example, in Canada Compulife does NOT quote ROP life insurance products. Changes to the tax code in the 1980's killed the idea of ROP and so there is just no demand for such product. Even though the software program for Canada is the exact same as the U.S., ROP is not an option that appears for Canadian subscribers.
In Canada we quote Universal Life products that have "term to 100" as the cost of insurance (COI). The term to 100 COI gives the buyer a fully guaranteed, level premium insurance program within the shell of a UL policy. If the consumer wants to add more money, and have the excess money with investment returns help carry the cost of their guaranteed level COI, then the consumer can do so. The ability to put in more money annually allows the construction of limited pay variations. Even though the ability to quote these UL products is in our software, it is NOT an option turned on for the U.S.
U.S. companies offer a comparable alternative through no lapse premium guarantees. The no lapse guarantee has the affect of turning a UL product into a term to 100 like variation. If you want to pre-pay premiums some companies will allow the consumer to select a higher guaranteed no lapse premium for limited pay variations. No lapse UL policies are not something you would find in Canada.
Note: Last month we indicated a willingness to expand our no lapse UL categories to offer comparisons of common limited payment periods. We remain very willing to move forward with that enhancement. Unfortunately NO COMPANY has yet to provide us with data for that purpose. If you want to help us get the ball rolling, you can start lobbying your company to get Compulife the data that it needs.
In Canada we quote joint life, last-do-die insurance policies. In the U.S. such policies are referred to as survivorship policies. The technology to quote survivorship policies is ready to go because we have already built it for the Canadian market. As with limited pay no lapse UL, we would be happy to offer that option to U.S. subscribers when and if we get companies providing us with their joint age calculation formulas. This is an example of a function/feature that we originally built for Canada, that is ready to go when and if we can use it here in the U.S.
With that in mind the work we will be doing to develop Critical Illness comparisons for Canada will mean that we will be ready to roll out CI comparisons for U.S. subscribers when and if such policies become common or popular in the U.S. market.
In that regard I would be curious to hear what U.S. subscribers think of Critical Illness insurance. Personally, I don't own one and I don't see the need.
In my mind insurance is used to replace a financial loss caused by a named risk. If you die your dependents lose your paycheck and so you buy life insurance to give those dependents the money that is then used to replace the income that they lost because you died. You buy house insurance to replace your home if it burns down or is blown apart by a tornado.
Financial loss may or may not be triggered by a critical illness. If a heart attack is covered by the policy, and you have a heart attack, then the policy pays a lump sum (congratulations, you're a winner). My point and question is, "What was the financial loss that was caused by the heart attack?" Many people have a heart attack and are back to work in a week or two while others are disabled and unable to work. But being able to work is not a determining factor in whether you collect a large lump sum from a CI policy, it pays the owner that money regardless of whether there was financial loss. If you are paying premiums in order to receive money when there has been no loss, the concept is much more like gambling than insurance.
It seems to me that if you are concerned about loss of income because of disability arising from an illness, then you really need disability insurance. Disability insurance covers a much broader range of risks and is much more focussed on replacing an income lost due to ANY accident or illness, not just a list of predetermined illnesses. And if you have disability insurance why would you then need a lump sum if the illness happens to be one of the ones named in the CI policy? For example, if you have enough real life insurance, why would you need or want accidental death insurance?
It seems to me that buying insurance should not go beyond covering financial loss caused by a catastrophic event. Sure you could use your money to buy a policy that covers you for cancer or heart attack, but is that really a good use of your money? As I said before, I see the need for an insurance policy to pay me the value of my house if it is wrecked by a tornado. The question is, do I need a policy to pay me the value of my house because a tornado came close?
What do you think and what do you know about the subject? Feel free to email your comments to me at barneyrl@compulife.
The balance of this bulletin is taken from our Canadian Bulletin and is for information only.
With the completion of the forms library system Compulife is now turning its attention to the construction of a Critical Illness comparison option. This option will be provided to all Compulife subscribers at no additional charge.
Compulife's Critical Illness comparisons will be PREMIUM ONLY. For that reason work on the project will go quite quickly as there will be no need for any new mechanisms to store and retrieve data.
The problem with a premium comparison ONLY is that unlike life insurance, which provides standardized coverage no matter which policy you buy, two different CI policies may cover totally different risks and there is NO standardization of coverages. With that in mind Compulife does not want our comparisons to ignore that issue. On the other hand, and as we have discussed before, we lack the expertise to analyze these differences.
Previously we advised you that Compulife was teaming up with the individual who has been a Compulife subscriber for over 25 years - Dick Gilbert of Megacorp Insurance. Dick has become an expert on the subject of the differences between Critical Illness insurance policies and is recognized by many agents as the most knowledgable individual on the subject.
The joint project with Dick will be an "agent only" web site called www.cianalyzer.com. The site will be a password protected site which Compulife subscribers will have direct access to by the click of a link. Agents who are NOT Compulife subscribers will be able to register FREE to use the site. The site will be a resource for information and comparative analysis of different policy contracts and a discussion of the differences between policies.
Because it will take time to get the new site up and running, and because we do not wish to delay rolling out the premium comparison software, we have devised an interim and permanent way for our subscribers to obtain information about CI policies and the things they cover.
Before Compulife adds any life company's CI policies to our software, the company MUST provide Compulife with a sample policy contract in PDF file format. That PDF sample policy will be added to Compulife's forms library and will be directly accessible from the "Display Single Product" window for any individual policy which the subscriber double left clicks in the comparison.
To ensure that agents know about this new feature, the following WARNING will appear on the top of all comparisons:
WARNING: The following is a price comparison ONLY of Critical Illness policies.
Different policies cover different Critial Illnesses. You must carefully consider the
coverages provided by any policy that you are recommending or buying.
IMPORTANT: To review the policy contract for any of the following policies,
double left click on any of the products quoted. This will display a single product
window. At the top of that window, select "options". The last option on the list is
"sample policy". Select "sample policy" to review coverages for that policy.
When the agent click on "sample policy" on the options list, the forms library will retrieve the sample policy and display it in a PDF window, just as it does with any other form.
A modified version of the above warning will appear on the bottom of any CI comparisons or individual quotes you print. It will say:
WARNING: The above is a price comparison ONLY of Critical Illness policies. Different policies cover different illnesses.
In other words, one policy may NOT cover you for something another policy does. Your agent has the ability to provide
you with a sample policy for any of the above policies. Make certain that you obtain and read that sample policy carefully.
Compulife will NOT add the CI products of a life insurance company unless the company also provides a sample policy for those products. Typically a sample policy will be a copy of a typical contract for that product WITHOUT information for an individual client and usually with a VOID disclaimer on the pages.
Given that we have already built our forms retrieval system, and given that we have already produced our premiums comparison software for life insurance, which will be used for CI policies, this work will go quickly. While our programmer is making the necessary modifications to get these changes made, we will be adding data files as companies provide them.
During March significant improvements have been made to our websites, both www.compulife.com and www.term4sale.com. The changes make our websites more attractive on the new generation of wide screen, LCD displays.
We think the new pages are better organized and look more professional. The question is, did anyone notice? Tell us what you think? Do you have any suggestions?
We are also obtaining the software and hardware that we will need to begin offering on-line tutorials. From our website you will be able to link to a Windows media program that will give you a multi-media tutorial which will have video, computer image displays and voice instructions on how to use our software. You will see us use the program, and talk about it while we do. We have decided that we will use a two person audio track where Jeremiah and Bob will actually discuss the software and its use during the course of the tutorial. For those of you who have listened to director/producer audio tracks provided with many DVD versions of movies, you will understand how this will work.
Tutorials will be short and topically arranged. For example, the first tutorial will be an audio visual presentation of the Dare to Compare Challenge, which is a training tutorial we use for first time users. Someone will actually be able to sit and watch us do that tutorial in a video. We think for those who fear touching the keyboard, this will be useful.
The second tutorial that we are planning will explain how to use our "ROP Analysis". We think that function in the software is overlooked but is very useful, particularly when selling ROP products to high end insurance buyers who actually understand the time value of money. Once we have that tutorial ready, we will talk about it in the future Update News, and invite you to check it out. At that point we will ask if there other features and options in Compulife that you would like us to cover in the tutorials? Let us know.