Compulife
Issues Challenge to Life Insurance Industry
Compulife Software Inc.
is challenging life insurance companies to create a new series of level term
life insurance products to provide consumers with level premium policies to
retirement. In conjunction with this challenge Compulife has introduced the
following level term categories to its life insurance comparison software: to
age 65 level guaranteed; to age 70 level guaranteed; to age 75 level
guaranteed.
(PRWEB) May 10, 2007 --
Compulife Software Inc. is challenging life insurance companies to create a new
series of level term life insurance products to provide consumers with level
premium policies to retirement. In conjunction with this challenge Compulife
has introduced the following level term categories to its life insurance
comparison software:
- to age 65 level
guaranteed
- to age 70 level guaranteed
- to age 75 level guaranteed
Consumers can access the
Compulife database of over 125 life insurance companies by visiting www.term4sale.com.
Term4Sale is the most unbiased comparison software available on the web because
Compulife does not sell life insurance. Consumers using www.term4sale.com can
obtain instantaneous term life insurance comparisons without divulging their
identity which means that no agent will call.
The first product that
Compulife has added to the new categories is American General Life's new
"Select-a-Term". "Select-a-Term" offers insurance buyers a
range of level insurance premium periods between 10 and 30 years. In order to
fit the product into the new 65, 70 and 75 categories, Compulife has hand
picked premiums to fit the age and the period. For example, if a 47 year old
wants a level to 65 policy, they would need an 18 year level term period. Using
www.term4sale.com the 47
year old simply selects the level to 65 comparison category and the premium for
the 18 year Select-a-Term is automatically quoted. If the same consumer wants
coverage to age 70, they select the age 70 category and the program quotes the
23 year level premium.
Compulife president Bob
Barney commented, "The Select-a-Term" product is a good start for our
new categories but there is a problem. Insurance buyers younger than 35 cannot
buy long enough level periods to get to age 65. For example, a 25 year old
insurance buyer needs a 40 year level premium." Barney believes American
General will broaden their selections if they receive a positive consumer
response to the concept.
Compulife has e-mailed its challenge to life insurance companies and has posted
the challenge to:
http://www.americaninsurancebroker.com/showthread.php?t=843
Compulife is pressuring
the life industry to respond to the problem which faces younger insurance
buyers. Barney explained, "It is a serious omission that younger adults
with children, who have the greatest family obligations and the greatest needs
for life insurance, can't get level term premium guarantees longer than 30
years. That's just wrong and it is my hope that the new categories in
Compulife, and the initial product offering of American General, will cause the
rest of the industry to wake up and pay attention."
Initial reaction to the Compulife challenge is mixed. Some companies have
expressed initial interest while some have argued that longer level periods
represent reserve problems. Barney isn't buying that. He asks, "What's a
more expensive and risky proposition for a life insurance company, insuring a
50 year old for 30 years or insuring a 20 year old for 45 years? In today's
market a 50 year old can buy a 30 year level term product from a number of
different life insurance companies. The 50 year old who does so has a level
premium and coverage to age 80. By contrast a 20 year old can't go longer than
the same 30 years. Where's the sanity in that?" In Barney's view there is
much more risk for a company to insure the 50 year old between ages 65 and 80
than there is to insure the 25 year old between ages of 50 and 65."
Some agents have told Barney that most younger buyers just want the cheapest
thing and buy 10 year term. Barney shakes his head when he hears that. In his
view term life insurance buyers need to buy level term that covers them to
their expected retirement age. If that isn't available Barney advises that they
need to go as long as possible. Barney has published an article on the subject
at Term4Sale:
www.term4sale.com/golong.htm
Compulife believes that most agents are not making much effort to sell younger
insurance buyers because premiums are just too small to generate sufficient
commissions. Today a person age 25 can purchase $500,000 of 10 year term life
insurance for as little as $115 per year. A 30 year policy is more expensive
with prices starting at $370 per year. But even at $370 many agents do not
think it is worthwhile making a sale of that size and so many younger consumers
are left to fend for themselves.
Barney guesstimates that prices for a 40 year $500,000 term policy to a 25 year
old non-smoker would start in the range of $450 to $500 per year, making the
sale much more worthwhile for the agent. More important the consumer would be
getting a guaranteed premium for as long as they need term (to retirement). In
today's market the only other option is for the young consumer to buy a whole
life policy and the least expensive products begin at about $1,400 per year.
"Term to retirement, such as level term to 65, is a win-win-win product
for everyone involved", reasons Barney. "It gives the consumer a
guaranteed premium for as long as he or she could possibly need term insurance.
It gives the agent a sizeable enough premium to process the business and it
gives the life insurance company a long term relationship with a buyer who will
no doubt need more insurance as they advance economically."
Bob Barney
Compulife Software, Inc.
My Office Toll Free (888) 798-3488
Main Office (800) 798-3488
# # #