Update News for December 2024

Here is a quick run-down on what you will find in this bulletin:

• • Merry Christmas 2024

  • FIRE SALE?
    I Think Prices Are Going Up

  • Term4Sale – Zip Code Listing Warranty

  • Zip Code List FROZEN Until
    January 13, 2025

  • Zip Codes Available At 12 Noon EST
    January 13, 2025

  • Do Some Preparation In Advance

  • Zip Code Renewals Must Be Paid By
    January 10, 2025

  • Our Current Programming Plans for 2025

These topics will be dealt with in more detail throughout this bulletin.

Merry Christmas 2024The birth of Jesus is marked by many as an important Christian celebration but all the characters and players in the Christmas story, with the possible exception of the three wise men, were Jews. And it is the very “Jewish nature” of Christmas that is the basis of my Christmas greeting this year.

The other inspiration for the theme is the fact that there is growing anti-Semitism in the world. That is of great concern for people like me who are pro-Jew, pro-Israel and who are very mindful of the horrors of the 1930’s and 40’s. To learn more you can read my Christmas greeting that follows.

FIRE SALE?
I Think Prices Are Going UpI am starting to see what I believe is a trend of increasing prices for life insurance, both term and permanent. Further, I am seeing some price increases for higher bands that causes me to believe this increased pricing pressure is coming from reinsurance companies.

NOTE:   I said “believe” because I do not know for sure. The fact is that the rates that reinsurance companies are charging life insurance companies for insurance are NOT public information.

As background agents should understand WHY we have a reinsurance market. Smaller (and even some bigger) life insurance companies have retention limits that determine how much “risk” (face amount) they can handle on their own. If you are a life insurance company and you have an average policy in force of say $250,000 (that’s a relatively high average), then you can easily handle a $250,000 risk because the premium volume you are generating supports policies of that size. A claim of $250,000 is something you can and should be able to handle, assuming you have a sufficient number of customers.

But what happens if one of those policies is $20 million. The problem is that if that one $20 million policy generates a claim, you do NOT have the reserves to deal with it because that one particular policy is much larger than your group of average policies. To be able to sell and handle that $20 million policy you have to “lay off the bet” to a bigger insurance company who you pay to share the risk. This can be done through either reinsurance or coinsurance. Either of those options effectively mean that smaller companies are insuring some of their risks with bigger insurance companies. Once again, the specifics of all this vary from company to company and are generally kept secret from those of us not in the upper echelons of the life insurance companies.

Typically, when you look at prices for insurance products, the more insurance that the consumer buys, the cheaper the rate per thousand. I tell people that this is like “bulk buying”. To put it another way, the rate per thousand you pay for smaller amounts of insurance is usually higher than the rate you pay for larger insurance policies.

Remember:   It is those higher face amounts which bring in the need for reinsurance companies to participate in issuing those insurance policies.

With this as background I have been noticing a tendency for some companies to actually have much higher bands with higher rates per thousand than for some of their lower volume bands. What that tells me is that they are running into higher costs for reinsurance (or coinsurance), costs higher than what they themselves think they should be. In addition to that, I am also seeing some companies who are beginning to inch up their overall prices.

So what’s going on. Why these price increases?

There are two key cost factors in the pricing of life insurance. Those factors are mortality costs and interest returns.

The price increases are NOT due to higher interest rates. In reality higher interest rates mean the prices for level guaranteed life insurance products should come down. The more money a company can earn with the money that you pay them, means the less of your money that they need.

The most critical cost factor is mortality costs. People die and life insurance companies must pay claims. That’s what this business is all about. The more claims you have to pay, the more you have to charge for insurance. That’s why term policies are cheap on young people, and a lot more expensive on older people because a lot more older people (per thousand) die than younger people.

Generally, over the past few decades, mortality has improved. The cost of insurance based upon mortality has been gradually going down over time. This is a result of people living longer which is generally a result of the fact that we have improved medical care and technology. This improved mortality has been a contributing factor to insurance prices being lower today than they were decades ago. But I think that is changing and not in a good way. I suspect that COVID has “spooked” the reinsurance companies because they are seeing claims increasing.

NOTE:   During the period when COVID was first hitting I was closely watching the CDC mortality numbers, based upon age groups. For the most part, young people did not die of COVID. Children rarely died from COVID.

COVID has now mutated into a problem that is more like a bad cold or the flu. Deaths from COVID are much less likely with these newer strains. Despite this, we are hearing a lot about unsuspected deaths, particularly in otherwise healthy young people. I suspect that insurers are seeing claims increasing at all ages which tells me it is NOT the disease itself that is now hitting people, it’s the complications from COVID vaccines which appear to be affecting ALL people at ALL ages.

If you are a pro-COVID vaccine person, you are likely to become unstuck by my comment. You will be unhappy with me saying such a thing. OK, then why am I seeing life insurance price increases?

As I said at the beginning, I “believe” based upon what I am seeing at the retail pricing for life insurance products. I am “guessing” as to what is causing the downturn in mortality. Perhaps I am off my rocker, there is no downturn in mortality and some life insurance companies are just deciding that they can and should increase their prices.

What do you think? I am looking for feedback at this point. I would welcome anyone sharing with me what they think (or know) is going on. Feel free to email me:

Depending upon what I hear, I’ll share more next month.

My point in raising this is that we may be at the beginning of a general trend in price increases. If that is the case, you should be letting your clients know that this is an important time for them to lock into longer, level guaranteed life insurance products and to do it NOW before prices increase.

Term4Sale – Zip Code Listing WarrantyThe warranty that Compulife provides is that for every 3 zip code listings that you have, you can expect ONE legitimate email contact through the system per year (we don’t count tests and duplicates; spouses and partners are NOT considered duplicates). If you didn’t receive that one for three contact then those 3 zip codes will be free listings for the following year and the warranty will carry over to that following year as if you had paid the full normal fee.

IMPORTANT:   For those who have ONLY 3 local zip codes, we would encourage you to add a 4th local zip code. For the purposes of the warranty calculation, we round up (in your favor). So, if you have a 4th local zip code, and you get 1 contact the following year, our calculation would be that you should get 2 contacts (4/3 = 1.33 which rounds up to 2). In that situation you would get a credit of $36 against your $48 invoice.

NOTE:  Term4Sale Zip Code invoices for “additional zip codes” (zip codes in excess of your local zip codes) were sent around November 15, 2024; you have until January 10, 2025 to pay that invoice.

If you buy additional zip codes, and you think you did not get the number of contacts you should have this year, do NOT pay your Term4Sale invoice until the last week of December.

In that last week of December (between Christmas and New Year) call us and we will review your email contacts with you, and compare that to the number of zip codes that you had in 2024. If you came up short, we will issue the appropriate credit and reduce your invoice. If you pay that reduced amount you will keep ALL the zip codes you were invoiced for in mid-November.

How is the credit calculated (if you qualify)?

EXAMPLE:  You have 14 zip codes, three local and 11 that you purchased. For 14 zip codes we expect: 14/3 = 5 contacts (4.67 rounded up). Let’s assume that you had only 3 email contacts (note: we do not count duplicate or BOGUS contacts) On November 15th, we would have invoiced you $231 (11 X $21) for 2024 renewal. However, you really only got the activity we would have expected for 9 total zip codes, which would have been 3 local zip codes, and 6 additionally purchased zip codes. Therefore, we will credit your invoice DOWN to $126 (6 X $21) and give you the same 14 zip codes for 2025. In other words, you will have 5 of those 11 paid zip codes for free.

IMPORTANT:  There are NO REFUNDS. What we do is reduce the renewal cost for the SAME zip codes for the following year. After January 13th you can add zip codes (and pay for those) or you can swap your zip codes for other zip codes.

This guarantee is designed to act as a way to retroactively balance out the cost of zip codes listings that have not produced. Sometimes, particularly for those with smaller numbers of zip codes, or with zip codes in poorly populated areas, the results are not as good. We understand that and our warranty is designed to moderate the cost when results are disappointing.

Zip Code List FROZEN Until
January 13, 2025The zip code list is now FROZEN meaning there will be no opportunity to add, remove or exchange zip codes until January 13, 2025.

You should have already received your additional zip code invoice by email for 2025. You can pay in 2024 if you want to expense the advertising in that year, or you have up until January 10 , 2025 to make your payment which allows you to expense the advertising in 2025.

Zip Codes Available At 12 Noon EST
January 13, 2025The land rush begins at noon, January 13th EST.

As it is every year, the second Monday in January, at 12 noon EST, is the best and busiest zip code purchasing time of the year. The zip codes of those who did not renew their previous listings will become available on a first come, first served basis.

To keep this fair and equal for all, we have a HARD starting date and time to ensure fairness. Every year someone complains because someone else beats them to a zip code that they wanted.

IMPORTANT: Do NOT call or email zip code purchase instructions before 12pm EST on January 13th. If you do, your email will be ignored and we may not have time to respond. If you call early to buy zip codes, and get through, you will be told to call later.

Because the phone lines will likely be busy that day it is BEST to do your homework in advance and email your instructions for new purchases or changes as soon after 12 noon as possible. If you have questions then call or email us the week before.

NOTE: You have two basic options for acquiring new zip codes. You can either pay for and ADD zip codes to your current list, or you can trade/exchange zip codes that you already have for zip codes that you think are better. There are limits to the number you can obtain, and you can call to discuss that if you need to.

Available zip codes (ANY zip code with less than 3 agents listed) will be available on a first come, first serve basis. The new list will be published on January 13th early that morning. You can review available zip codes here at that time:

Zip Code AnalyzerAny additional zip code purchased on January 13th, must be paid for immediately. The cost of the zip code will be 11 X the monthly fee ($1.75 for the first 75, $2.25 for zip codes over 75; standard licenses only). Once your new zip codes are added, the remainder of the month of January is free.

If you are switching zip codes for better zip codes we will need specific instructions. Tell us what zip code that you want to add and which zip code that you are giving up in exchange for it. If you don’t know what zip codes you have email us at service@compulife.com and ask for a list of those zip codes ASAP.

Do Some Preparation In AdvanceOnce again, you can research zip codes at:

Zip Code AnalyzerIf I was you, I would print a list of zip codes in the areas that you are interested in, IN ADVANCE of the 13th.

IMPORTANT TIP:  You can use the column titles to sort the list of zip codes.

Typically, when I am assisting subscribers in finding great zip codes, I will sort by the 4th column: “Zip Code Income (Millions)”. The number in that column is a result of multiplying column 5 times column 6 (Number of Households times Income Per Household). You will need to click that column heading twice. The first time you click it sorts from smallest number to the largest. The second time you click it sorts from largest to the smallest.

TIP:  In densely populated, urban areas, increase the “Number of Listed Zip Codes” from the default number of 100. This will enlarge the area of the state that you are looking at.

Once you have the list that you want, print that list. I would then highlight the zip codes that you would really like to get. Once again, make sure that list is done in advance of the 13th.

On the morning of the 13th you will want to replicate the list again, doing the same search and sort. Check your old list with the new list to see if zip codes that previously had 3 subscribers listed now have 2 or less. If that happens, and it’s one of the zip codes that you want, fire off your email at 12pm to:

service@compulife.comTIP:  Don’t wait too long after finding zip codes that you want. You can send multiple emails. Remember, first come first served. I promise you, if you wait too long, some zip codes that you want will be gone by the time you ask for them.

Make sure that we have your name and phone number in the email. Once we get to you in time order, we will call you and ask for your credit card information.

IMPORTANT:  Compulife keeps no credit card records for subscribers. If we don’t have your credit card number, they can’t be stolen from us. Every purchase by credit card, requires the credit card again.

Zip Code Renewals Must Be Paid By
January 10, 2025Nothing compels you to renew your additional zip code listings and you will continue to be listed in those zip codes until January 10, 2025 in the event that you elect not to pay those renewals.

IMPORTANT:   If your payment has not been received by the end of business on January 10, 2024, the additional listings that you have will LAPSE and be made available to other subscribers at noon on January 13, 2024.

If you believe that you did not get sufficient email contacts (as per the warranty) and that we will need to make a warranty adjustment to your invoice, do not pay your invoice until the last week of December. We would encourage you to contact us on December 27th or 30th (mark that in your calendar) and we will review your total number of email contacts and weigh that against the number of zip codes that you have, and the number of contacts that you are entitled to. If you are short, we will determine the credit that we need to make against your invoice for 2025.

Our Current Programming Plans for 2025The following is the current order for new work that we will be doing in 2025:

• • Introduction of New PC Version: CQS.EXE.

• • Overhaul Of Current Product Data Files.

• Introduction of Compulife Mobile* 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 the balance of this year and throughout 2025. 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 its full attention to our web based, Compulife Mobile software. The long term goal is to have a web based product that does everything our PC based software does.