for June 2021
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
Why Is Compulife The Best?
Recently Compulife added a new button on our compulife.com homepage which asks the questions:
When you click on that button (or the link above) a new page appears.
You can read that on your own and we are quite happy to answer any questions about any the claims made there, but I wanted to focus on one of the last points and expand upon it here:
Life Insurance companies do NOT pay to be in Compulife
It is VERY important, and of great benefit to you, that no life insurance company is required to pay Compulife ANYTHING to have their products in our software. All the products, and all the rates, which Compulife has placed into our software database were done at our expense. Where do we get the money for that, FROM YOU. When you pay Compulife for your subscription one of the things that you are paying for is the work that we do to keep the products and rates in our software up-to-date and that includes adding new companies and products.
Wouldn't it be better if the companies paid for that? NO it would not. If companies paid us to feature their products and rates in our system we would cease to be a third party, objective source of information about the market. And it is the fact that we are an objective source of information that makes Compulife a VALUABLE tool to the agents and brokers who market themselves to consumers as independent agents who shop and compare to get their customers the best values and lowest costing products available.
Compulife'e independence underlines our objectivity and that adds credibility to your claims of being an independent agent or broker.
There Are No Barriers
We Want to Quote ALL Companies
In addition to NOT requiring a life insurance company to pay us to quote their products, we do our best to make it VERY easy for a life company to be included in our software.
For example, we do NOT require the companies to enter their data into our system. We do all the data entry. Part of that is to protect our trade secrets, we do NOT want anyone outside of Compulife to learn how we do what we do. If you don't disclose to someone your trade secrets they can't steal your trade secrets.
We do not even demand that a company configure their rates in a particular manner in order for those rates to be included in our database. With over 125 companies in Canada and the U.S., I can assure you we see rate tables in all kinds of different configurations. The initial part of the rate entry job is taking the format that the company provides and getting it organized so that it can easily be broken into the pieces that can be digested by our software. Some rates are easy to work with, others are difficult. Regardless, we never tell a company that they must re-organize their information into a particular format; we work with what they give us.
In some cases we publish the products and rates of companies who did not give us the information that we obtained. In those cases an agent or broker of the company got us the information that we needed to put the company's product in our system. Here is the information that we need to add a company's product:
1. Rates - preferably in electronic form (excel or pdf)
2. Product Description (policy fees, modal factors, minimum face, etc.)
3. State approvals
4. Preferred Health Criteria
We can move ahead without number 4, but until we get the information from numbers 1 to 3 on that list, we cannot add a product to our system.
Recently I was given the term rates for a company via their PDF rate manual. I had everything except the renewal rates - the YRT tables that followed the initial level period. For some of our customers renewal rates are NOT important, the rationale being that no one ever expects the consumer to pay those renewal rates. While I agree with that, renewal rates are a VERY important issue if a consumer becomes uninsurable and gets stuck in the product. I don't know how anyone can sell a level "renewable" term product without showing and discussing renewals.
Disturbing Trend in Term Insurance?
One of the recent trends that I find quite negative is that a number of life insurance companies are opting for their "renewable" term plans to become "decreasing term" after the initial level period. To repeat what I said, I know that the renewal costs for these things are just awful and that if your client is worried about the cost of their term plan beyond the initial level period, then they need to buy a product with a longer level period - PERIOD. Having said that, there is no doubt in my mind that a product that becomes "decreasing term" after the initial level premium period is NO longer a renewable product. I think it is misleading to label a product that does that as renewable. In essence it transforms into a different sort of product, and calling it "renewable" is misleading.
At this present time Compulife has no plans to quote and show decreasing face amounts but never say never. One of the reasons that we are moving toward a database overhaul is to make it easier to make changes to our software to add and simplify the process to add the information that we have. If at some point there is a large number of companies with "decreasing term" plans, or decreasing options after the initial level period, then we will make every effort to deal with it but not until after the data overhaul. And for now, we will show such products as "non-renewable", because that's what they are. A "renewable" product means a product which allows you to continue with the same amount of coverage. It has been that way for decades and we are not going to support re-definitions of terminology.
Personally, I think we are on the edge of a period of rampant inflation which will make the inflation of the Jimmy Carter 70's look like child's play. Did anyone else take note of this story when it broke earlier this year:
The story says:
"The new banknote will be worth just 52 U.S. cents at the current official exchange rate. Interannual inflation was running at 2,665% as of January, according to the central bank."
Persistent and growing government deficits, a bursting national debt, unfunded liabilities to seniors (pensions and medicare) and our upside down population demographic mean that government will resort to using inflation as a weapon to destroy the value of the currency and effectively reduce the value and cost of public debt. The victim in all this will be the person who is sitting on government paper (currency). Think of the poor guy in Venezuela who worked all his life to save a million for his retirement, and now he doesn't have enough money for a cup of coffee.
Back to life insurance. Any level face amount policy effectively becomes decreasing insurance in an inflationary economy. Eventually the $1 million dollar permanent plan is going to turn into a Final Expense policy. Now for those who say "What's the point of buying a longer term life insurance product?", it is all relative. The premium you are paying for that policy is shrinking in value as fast as the face amount, and so a 30 level term plan means you are buying a decreasing face amount policy (in real dollars) and paying for it with a decreasing premium (in real dollars). What you don't want, at the end of those 30 years, is a policy face amount that starts dropping to go along with it.
I remember when I first began to sell life insurance 40 years ago, running into older people who had $5,000 and $10,000 permanent policies. 40 years ago that seemed like very little money, but then I remember my father and mother paying $12,000 for their first brand new house. It's all relative. Inflation means decreasing face amounts and decreasing premiums (in real "today" dollar values).
Life Insurance Companies Do Buy Our Software
Having told you that we do NOT charge companies to have their product in Compulife, we do have a number of life insurance companies who are subscribers to Compulife. We won't tell you who they are, but the reason these companies subscribe is because of some of the reasons you see on this page:
Typically life insurance companies use us for two purposes, both having to do with competitive intelligence.
First, some companies have people in their marketing departments who assist their agents facing a competing situation where that agent may be guessing at to what his competitor is offering. If the agent knows which company that they are competing with, and tells the person in his Home Office which company it is, then that agent can be advised as to what the other company is changing for their competing product. Agents who don't realize that they can get that very same data themselves, from Compulife for as little as $96 per year (Compulife Basic), are impressed by how smart their life insurance company is.
Second, some companies use our software to do competitive analysis of where their products stand in competition with others in the market. Based upon that information, they are able to reconfigure their own pricing assumptions to come up with rate changes that position their products better in the market.
In regard to that second use, about three years ago Compulife introduced a new option to our Windows software called the "Compulife Batch Analyzer". The Batch Analyzer makes it VERY easy for companies to do the kind of competitive analysis that we are talking about here.
Essentially using the Batch Analyzer, the subscriber creates "batch" parameters on the batch data entry screens. Instead of quoting a particular age, the user can specify a "range" of ages with steps between those ages. The user can specify multiple face amounts, and quote for multiple categories based upon sex, smoking and preferred health. After setting up the batch ranges, the software then proceeds to calculation each results and exporting each result to a spreadsheet format that is defined by the user.
We have clocked the Batch Analyzer. It is typically able to run about 100 quotes per SECOND, which is 6,000 quotes per minute, 360,000 quotes per hour.
Because of the sheer power of this tool, we ONLY sell the batch analyzer to life insurance companies and actuarial firms who must sign a very stringent licensing agreement that restricts their use of the data that they generate - they can't give it or sell it on to third parties. If this function fell into the wrong hands it could be used to reverse engineer our database and give a competitor the data necessary to produce a competing quoting system. We do not wish to raise a chicken that eventually scratches our eyes out.
We Do NOT Sign Life Insurance Company Agreements
Not all life insurance companies that subscribe to our software buy the Batch Analyzer. The price for the Batch Analyzer is $1,920 per year. As mentioned, life insurance companies who do buy the Batch Analyzer must sign a strict licensing agreement in order to be able to purchase and use that option.
By comparison, from time to time we have life insurance companies who demand that we sign "Non-Disclosure Agreements". For your information we NEVER sign such agreements. Non-disclosure agreements are completely contrary to the nature of our business. Our entire business model is based upon disclosure of the information that we obtain from life insurance companies about their products.
While we don't sign such agreements, we do have self imposed non-disclosure rules that apply the same for all life insurance companies. For example, we will not tell you which companies subscribe to our software. We will not tell you which companies are changing their rates in the future, only if they changed their rates today or before. There is all sorts of communications with companies that we do not disclose. No company is treated any different than another.
On the other hand, there is NO law that prevents us from putting the rates which companies charge for their products into our database. For example, the information itself cannot be protected by copyright. The documents that companies publish are protected by copyright, but we do not COPY or provide copies of the company documents and give or sell them to you. The company material is used as resource information to obtain the rates which we store in our database. The rates in our database are NOT protected by copyright and are considered "public". To protect ourselves from the theft of that public information, Compulife transforms and encrypts the data so that the ONLY way to access it is through our software which is protected by copyright. If you are NOT a licensed user, or you gain unlicensed access to that data by using our computer source code that is protected by copyright, then you have a legal problem.
It is also worth noting that we ourselves do nothing like that to obtain the rate information from life insurance companies. We are often asked by agents if we can get the rates for companies out of the company software and the answer is that we have never done that and will not do that. We do NOT reverse engineer other people's software to do what we do.
Back to the life company non-disclosure agreements. As I said, many companies ask us to sign them and we never do. Companies want us to agree to NOT disclose their trade secrets - completely reasonable but the solution is not an agreement, it's simpler than that. We don't want to know the company's trade secrets. Everything we need to put a company's products and rates in our database is public information, it's no big secret. Anything beyond that is redundant to Compulife and we don't know any company's secrets. It we don't know them, then we can't ever be held to blame if the secrets become public information.
Some companies worry that we might take new rates, rates that have not yet been made public, and give those rates to their competitors. Compulife has NEVER done that and we would NEVER do that. The minute we would be caught doing such a thing our trustworthiness would be in the toilet.
If a company that is new to Compulife was concerned and not familiar with our non-disclosure practices, and the company wanted to be extra careful, we would tell them to give us their rates at the very same time as they go public with those new rates in the market. Sure, we'd love to have those new rates in our software on the morning of the day that they are introduced, but our ability to quickly turn around such rates changes is well known and the delay is short. Companies that provide rates one day, usually have test software later that day or the next. In fact many companies are SHOCKED by how quickly we can provide test software because it takes longer for their own illustration people to put the new rates into their own software. And we are often not the only third party quoting service given those rates, and many of the others require at least a couple of weeks notice to do a rate change. We are not the weak link in the chain.
The other reason we do not sign non-disclosure agreements is because virtually all of them go way past dealing with matters of disclosing trade secrets. When you read some of these agreements you realize that if you signed them you would be agreeing to become permanently at the beck and call of the company in all matters related to quoting their products, from that point and forever. As I said earlier, there are no laws that stop us from doing what we do, but if we were to sign one of those non-disclosure agreements, suddenly that agreement would become all the "law" that a life insurance company needs to dictate to us what we can or cannot do in regard to that company. The minute we would sign that agreement our third party, objective status would go out the window.
And it's not just the company's dictates that is of concern. Remember, Compulife does not sell life insurance. No one employed by our company sells insurance. Because we don't sell life insurance, we don't need any licenses and that effectively puts us beyond the reach of life insurance regulators, some who do behave in ways that are not in the consumer's best interest (don't get me started on that). By comparison life insurance companies must be licensed by regulators to do business, and life insurance companies can be easily manipulated by regulators and told what to do. If Compulife had a non-disclosure agreement with a life company, that agreement could be an effective conduit through which a regulator could compel a company to step in and dictate to Compulife what Compulife can and cannot do. It can't happen if a life insurance company has no means to do so.
Any agent who has been in this business for any period of time will understand this. Regulators often use life companies to police agents. And when that happens, the agent, who must themselves be licensed, must comply or risk losing their own license and their means to earn a living.
To summarize, Compulife is not licensed and a life insurance company, in the absence of their typical non-disclosure agreements, has no way to dictate what Compulife can and cannot do.
Not signing non-disclosure agreements can mean a loss of company business. In at least one example we have lost a Batch Analyzer sale because of it, but our independence and objectivity are far too high a priority for us to set aside our principals to earn a few bucks. By the way, the unnamed company still provides Compulife with their product and rate data. At the end of the day they do not want to miss out on the free advertising that Compulife represents for them.
Companies Are Not Responsible For Compulife
All of this means that life insurance companies are NOT responsible for what Compulife does or doesn't do. Compulife is NOT authorized or endorsed by any life insurance company. No company is responsible for the quoting information that we publish. If there is a problem, it is Compulife's problem, not the life insurance company. Even if a life insurance company gives Compulife errant information, they are not responsible for our publication of it, we are.
This begs the question, "How then can you trust Compulife to be accurate and up-to-date?" Those who have been subscribers can answer from experience. You can because we are.
Even those who find and report errors, which happens at least a couple of times a month, know that we fix errors VERY quickly. Once an error is fixed there is no one else who is going to encounter that error because it has been fixed. And then, to make sure you have a good experience finding the error, we issue you a 10% coupon toward your next annual subscription to the PC version of Compulife. Not many of those get issued.
And no one person finds all the errors, they are found by different people. It is VERY unusual for the same subscriber to end up with more than one 10% coupon in any given year. And I wonder how much time those who do end up with more than one coupon are spending checking our quotes (thank you for all your hard work and effort).
We Appreciate Companies That Assist Us
While we will not tell you who they are, we have excellent relationships with many life insurance companies. These are relationships that we have built up over the many years that we have been in business. Many companies give us "pre-release" information about new products or rates that they are introducing. They want to make sure that their new rates are in Compulife at the same time as they issue those new rates because so many agents quote their products from Compulife.
Some life insurance companies want to "test" their new rates and products before Compulife puts them in a general release. We are happy to cooperate in whatever way we can. At the end of the day we share the same concern, that we are quoting their products accurately.
And usually companies who want to test our software worry too much about problems that could result from an error. Years ago no companies ever tested anything that we were doing. As I mentioned, if we make a goof such as accidentally using a male rate table for a female (it's happened), the first Compulife subscriber to report it triggers an immediate repair and an update to the software. The only person affected was that one agent who stumbled upon our goof, who earns the 10% coupon for their assistance. Everyone else who got the update never saw it although we do disclose the fix in the midmonth bulletin. When it comes to our mistakes, Compulife tries to be completely transparent.
While we want to work with companies as best we can, we cannot be put into a position where companies dictate what we can and must do. In the end Compulife must remain independent and objective, which is why we are in our 39th year of doing business. We may not be the sexy new thing in the market, and we may not do what some other companies do (CRM's, case submission, etc.) but when it comes to quoting multiple life insurance companies, no one is better. For agents who want accurate, up-to-date, fast and simple quotes, we think we deliver better than anyone else and we certainly do so for a very reasonable cost.
Our Current Programming Plans for 2021
The following is the current order for new work that we will be doing in 2021:
Introduction of New PC Version: CQS.EXE
Overhaul Of Current Product Data Files
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 2021. 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.