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.
(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 http://www.term4sale.com. Term4Sale is the most unbiased comparison software available on the web because Compulife does not sell life insurance. Consumers using http://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 http://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:
http://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
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