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Update News for July 2009
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.
The June edition of Broker World (a U.S. publication) carried an article by Dr. Robert Goldstein, MD, FACE, FLMI titled, "Meeting the Competition". We thought the article was great and that Dr. Goldstone emphasized what we have been saying to subscribers for years on the subject of sub-standard insurance quotations and table ratings.
Before discussing that subject matter further, and how it relates to Compulife, I called Steve Howard at Broker World and asked for permission to reprint the article. Steve contacted Dr. Goldstone and both gave us permission to provide you with a copy. Here is a link to the article:
One of the things that we are routinely asked about is whether Compulife can include table ratings in quotes. The answer is yes, but it is a qualified yes which we will discuss further. In the meantime, if you want to learn how to add a table rating we have a video tutorial you should watch. Click on the following link to launch the tutorial:
Compulife does NOT have an automatic table rating calculation, you need to know the percentage that the company is proposing to add to your client's basic regular/standard premium. We have intentionally avoided making the process simpler because we do not want our program used to "compare ratings". The reason is simple, actual ratings percentages vary from company to company, and they vary because no two companies are likely to respond the same way to the same case. This is all set out in Dr. Goldstone's article, and that article reinforces our understanding of the different ways companies respond to the same case.
Until you have submitted an application to a company, and until the company has made a decision/offer, you cannot be certain what the premium will be. Once the company has made an offer, you can use our software to replicate that offer by adding the appropriate percentage to the premium.
If you want a basic comparison to give your client guidance before they have made a decision to purchase, we suggest that you do a comparative quote based upon the regular/standard premium, then advise your client that they can expect to pay 50%, 100% or 200% more based upon your estimation of what you think a company is likely to add. You should then advise the client to complete a COD application form(s), and submit the case to one of more companies for review. Until a company actually examines the insured, you cannot be certain what the rating will be.
Once again, please read Dr. Goldstones article titled, "Meeting the Competition". In fact I would encourage you to save a copy of the article and share it with a client (particularly a more sophisticated client or large buyer of insurance) who may be facing a rated insurance premium. It will help you emphasize to your client the importance of shopping and trying different carriers to get as beneficial an outcome as possible. Here is the article again:
I know that a number of Compulife subscribers subscribe to the magazine Canadian MoneySaver but if you don't I have a couple of articles coming up that you may want to pay attention to. Before I discuss those article, let me note that a subscription to Canadian MoneySaver is cheap, dirt cheap. For about $25 per year you can get a subscription to the Internet version of the magazine, which I think is a better alternative than the printed publication because Canadian MoneySaver has a historical library of past articles which you have access to with an Internet subscription. That library has dozens of my past articles and I know a number of subscribers who find those quite useful, not to mention all the other articles from dozens of authors.
Here is a link to the site to purchase a subscription:
The first of my new articles is titled "When Fraud isn't really Fraud" and discusses a big problem with the two year contestability clause in Canadian life insurance policies. The problem arises from the fraud loophole and the fact that there are a growing number of incidents where life companies are denying payment of claims outside the two year contestability period on the basis of fraud. In my article I note the fact that no such fraud exception appears in U.S. life insurance policies and I am asking MoneySaver readers to write to their provincial representatives and premiers to urge them to close this increasingly exploited loophole.
The second article, yet to be titled, will deal with the fact that I believe Canadian life agents are sleeping at the wheel when it comes to offering preferred health discounts to consumers. Now note that I say "agents" and not "companies". While the company makes the final decision on such discounts, I think this aspect of the market is driven by the agent and the unwillingness of most Canadian agents to shop the case (not unlike with substandard cases).
Here is what I mean: When an agent in the U.S. calls Compulife to discuss a question with respect to a specific quote, we typically begin by asking them for the client information such as age, sex, face amount, etc. We then ask what health class that they are using and U.S. agents give us a wide mix of preferred plus, preferred, regular plus and regular. By sharp contrast when a Canadian life agent gives us a call, and we go through the same routine, invariably we are told that the health class is regular. It is so predictable that it is a glaring distinction between the U.S. and Canada.
From time to time I will ask the Canadian agent if they ever quote preferred rates and I am told they don't, that they submit the case as standard telling the consumer that the company may offer a lower premium if they qualify for preferred. The agent then leaves it up to the company to decide. A lot of agents will tell me that most of their clients are issued standard.
Let me ask you a question. If a policy sale has already been closed at a higher regular premium, what incentive is there for a life insurance company to provide a lower preferred premium?
Let me use this example. You go in and buy a new car for $29,500, having shopped and negotiated. You sign the papers and are told that the car can be picked up the day after tomorrow. You return to pickup your car. Do you expect the salesman to sit you down and say "good news, we are going to give you the car for $28,000"? Of course not. The deal was closed at the higher price. You agreed to buy the car at that higher price and no one would expect the car dealer to give you a lower price afterward.
Given that, I repeat the question, "What incentive is there for a life insurance company to provide a lower premium" if you have already submitted the application for a higher premium?
And to prove my point we ran a trial balloon at this with an application for key man insurance on one of our Canadian staff. This individual is in pristine health, great height/weight, BP, cholesterol, etc. When we ran his numbers through the Compulife Preferred Health Analyzer everyone's top preferred rates were available based upon the company tables.
But our employee said he didn't think he would get the preferred rates because 3 years earlier he had purchased a policy from one of our subscribers and the life company gave him regular rates. Now truth be told I referred him to the agent in that case but I didn't stick my nose too far into the situation because it was his personal insurance. However, this time Compulife was the owner of the new policy and I get to stick my nose in. I may not sell insurance anymore, but I think I am qualified to be an informed consumer and I hate to pay more than I have to.
After he shared his concern with me I decided to get to the bottom of it and asked the agent (a different agent this time) to complete three applications with three different companies, all on a COD basis. I was suspicious that we might get turned down for the best rates with one or more of the insurance companies, for some non-obvious reason. We let them all know know that they were in a competitive situation for the case and they all shared the same paramedical.
Imagine our surprise when two of the three companies came back with their very best preferred rates "approved" (we have not yet heard from the third company). Not only did Compulife take one of the policies, our employee decided he will take the other policy and replace his previous policy. The new policy gives him more insurance, for a smaller premium, for a fresh 10 years. Win, win, win. The agent was surprised saying he couldn't recall one of the companies ever offering their very best rate to any of his previous clients.
So I will repeat the question again, "What incentive is there for a life insurance company to provide a lower premium" if you have already submitted the application for a higher premium? That's what happened 3 years ago and my guy got regular rates. This time we let them know up front we were aggressively shopping, and suddenly he qualified for the very best rates. Go figure.
Now I know that there is concern that if the agent quotes a preferred rate, and the client doesn't qualify, the client will be upset with the agent. While I hear that point frequently I believe that the solution to the problem is in the Compulife "Preferred Health Analyzer". I suspect most Canadian subscribers are not using it and I think it's time to have a hard look at it. I can assure you that most U.S. subscribers live and breathe it and I don't get the same argument that they are worried that a client will be turned down.
To learn how to use the Preferred Health Analyzer Compulife has prepared a video tutorial. Here it is:
The Preferred Health Analyzer in Compulife lets you compare your client's key preferred health criteria such as height/weight, BP, cholesterol, etc., against the values and conditions set out in the company's documents. While I appreciate that there may be other factors that come into the decision making process, it is a fact that in the U.S., if your client meets the criteria as set out, the client gets the rates associated with that criteria.
And U.S. companies know better than to look for silly excuses to avoid providing those premiums because if they don't have a good reason for rejecting the case at the quoted premium, then the agent will take their client up the street to another company. And in that regard I would urge you to once again read Dr. Goldstone's article. Consider carefully the behind the scenes dynamic which Dr. Goldstone discusses about company responses to competitive underwriting. Here is the article again:
Needless to say my article in Canadian MoneySaver will be discussing all this and will advise consumers to make sure that when seeking out an agent that they find one who does their due diligence in trying to get the best rates possible for them. If an agent doesn't think you can qualify for preferred rates, ask them to give you a specific reason for it.
We released some further updates to our Windows program in June. The area we will spend some time on in the near future will be the addition of joint life quotes for UL with Term to 100 COI. Apart from that, at this point we think we have added all the new features that we can at this stage, and there are no known bugs at this point.
During June we did add one important new feature that we think will make installing the subscription renewal much easier. This is an annual event unless you take advantage of our 2 or 3 year deeply discounted subscription pricing - a number do.
In the past, when you purchased your subscription renewal, we sent you an email with a link to your subscription installation web page. The page lets you update your subscription renewal or install Compulife to a computer that does not already have Compulife on it. To process a subscription renewal you you had to run a program called "renew.exe". Renew.exe installed your new subscription files allowing you to continue to get monthly updates to the software.
For most subscribers that will no longer be necessary. The Windows program itself will check to see if the renewal files are available, and download them automatically if it finds the files on our subscription renewal server.
Currently, if you are within 45 days of the end of your current subscription, the program puts up a squawk window advising you that your subscription is about to expire. With the implementation of this new feature, before the program displays that window the software will check to see if your new subscription files are available. Assuming that you have paid that subscription renewal, and assuming that we have processed the payment, the files will be available on the server and the program will download them automatically. Once that has been done the program will advise you that it has done so and advise you of your new "paid to" date. From that point forward, you are set to get monthly updates for the year.
We decided to make this change given the growing number of customers who do not get our renewal emails (lost in spam folders, etc.), or the growing number whose virus or firwall software won't permit the RENEW.EXE file execute. Those problems will be gone with this change.
Only those subscribers who are actually renewing will see this new feature. Further, this new feature only works for subscribers who have not modified their licensee and/or agent name. The name(s) on your licensee registration determines your serial number and if the serial number changes, the new feature will not work. If you request a change that modifies your serial number, you will still need to link to your installation web page and install as you have in the past. Emails will still be sent when you purchase a subscription renewal, or can be sent anytime you request. That option remains the same.
With completion of our work on the windows software we have been making great progress on the new service for PDA/phones. That work is almost done. The last step in the process is integrating the new service with our database software. The objective is quite simple. When you complete an online application to request the free PDA/phone software, our staff will be able to go into our database, display your record, and click a single button. The database will then install your PDA/phone service to our server and send you an email with a link to your personal PDA/phone page. Further, our database will be able to track the usage of your web page to ensure that it is not being used by multiple agents. Remember, this service is FREE and is intended for the use of subscribers ONLY. Just as we don't want you passing around your copy of the Compulife progam, the new web quoting capability is NOT designed for you to share with others. If you want to setup a public quoting service, that option is already available for an additional subscription fee.
Currently Compulife has an early variation of PDA/phone service running at:
If you have a PDA/phone that can surf the web, we would encourage you to check it out. Once the new upgraded service is available, the above link will cease offering quotes and will offer an application form that lets you apply to have a personalized PDA/phone version created just for you. Once you complete that brief application, Compulife will click that button in our database which will email you a link for your new PDA/phone quote system.
The difference between the generic service that is currently available, and the new service that is coming, is that the new PDA/phone service will be personalized for each subscriber. You will have one web address that is your web address for doing quotes (your personal use - it is NOT intended to be a web site that you let other people use). The web pages and quote format are being specifically designed for the "small screen" of your PDA/phone.
You will also have a second web address that will let you select the companies that you want to include in your quotes.
Some new features will also be available with the improved new service. One of the feature we think you will really like is the ability to quote annual and monthly premiums at the same time.
Once again, your personal PDA/phone web address will be for your use ONLY. Functions in the software will report to us if multiple users are hitting your PDA/phone web page. If it is determined that such is the case, then your site will be disconnected,. Needless to say, if we do google searches and find links to these web sites, that will also cause them to be taken down.
If you want a public web site, that anyone can use, then you need to purchase our internet engine or talk to one of our authorized web providers which can add quotes to you web site for as little as $99 per year. Those are the options we have provided for public web quoting and you can also set up PDA web quotes for multiple agents using those options.
Once the on-line, personalized PDA version of the software is up and running, the many improvements to the web engine, such as showing annual premium and monthly premiums at the same time, will be available in the web based software that is used for public web quoting. We have also added some new features for web quoting that we think you will like.
Once that is complete, those changes, together with our new categories, will be made available in the coming upgrade to our web software. Once that software has been implemented at www.term4sale.ca, we will be making it available as a FREE upgrade to our current internet engine subscribers and to our authorized web providers.
The upgrade will be available with new documentation that highlights the changes and improvements and how they can be integrated into current web sites. We will let our Internet engine subscribers know when that is ready.
Once our work on the web engines and PDA/Phone software is complete, we will be turning our attention to some important maintenance work that is needed to the data entry systems. Those programs have not been updated for quite some time, and some need to be converted to take advantage of the newer programming compilers that we have been using for the Windows software that we already distribute to you. Our goal is to make it easier to program future software, which will ensure that we can roll out changes and improvements more efficiently.
Further, having reviewed where we are heading over the next few years, and the changes that we would like to be able to make in the future, we have decided to stop and do a much more extensive overhaul than simply changing our data entry software. We have determine that we would also like to implement a better data storage structure that will make maintenance easier on both a data entry basis, as well as a programming basis.
To achieve our goals in this regard, we will be spending a fair bit of time reviewing our new data storage needs, and then building conversion software that will convert our existing data files into our new data file structure. Once we have done that, we will then introducing new comparison software that does exactly what it does now, but which derives its results from the new data structure. In other words, you will end up with a new program that does exactly what the old program did/does.
Once this first stage is completed, we will have both old program and old data, with new program and new data. Moving forward we will use the old data entry systems to maintain the old version, then converting old data to the new data forms for general distribution.
The next stage is to create the new data entry systems that talk to the new data format. Once we are satisfied that the new data entry system give us everything that we have now, we will then switch to the new data structure alone. We will only do this once we have thoroughly tested the new software to ensure it gives us no problems in maintaining the date. This may take several months. As far as the part you use, by the time we make that transition, you will have been using the new software for several months.
The point of sharing this with you is that the process will be quite lengthy and so from this fall throughout most of 2009, you will not be seeing many changes and improvements to the software that you use, even though the underlying foundation will be going through a massive change. Once the foundation has been reconstructed, and all the tools to work on the foundation have been built, the program will be in a position to make some substantial moves forward.
Think of it as transplant surgery, where you need to keep the patient alive and well, at the same time as you are swapping out the organs.