Here is a quick run-down on what you will find in this bulletin: New GOWIN.EXE…
Here is a quick run-down on what you will find in this bulletin:
Forms Library Development Completed
Time for Some Canadian Changes
Critical Illness Comparisons – UNDER CONSTRUCTION
Critical Illness – Comparing Coverages
Critical Illness – Sample Policies
Sample Policies are MANDATORY
This Will Go Quickly
Improvements to Web Sites
These topics will be dealt with in more detail throughout this bulletin.
Critical Illness (CI) insurance has become a fairly popular product line in Canada and we have now come up with a design that will allow CI comparisons to be added to our software. Comparing Critical Illness insurance is not as simple as life insurance and so we are including parts of the Canadian bulletin to help you understand how we are going to deal with that.
Like any change to Compulife’s software, the change has the ability to be employed for one country or the other, or both. For example, in Canada Compulife does NOT quote ROP life insurance products. Changes to the tax code in the 1980’s killed the idea of ROP and so there is just no demand for such product. Even though the software program for Canada is the exact same as the U.S., ROP is not an option that appears for Canadian subscribers.
In Canada we quote Universal Life products that have “term to 100” as the cost of insurance (COI). The term to 100 COI gives the buyer a fully guaranteed, level premium insurance program within the shell of a UL policy. If the consumer wants to add more money, and have the excess money with investment returns help carry the cost of their guaranteed level COI, then the consumer can do so. The ability to put in more money annually allows the construction of limited pay variations. Even though the ability to quote these UL products is in our software, it is NOT an option turned on for the U.S.
U.S. companies offer a comparable alternative through no lapse premium guarantees. The no lapse guarantee has the affect of turning a UL product into a term to 100 like variation. If you want to pre-pay premiums some companies will allow the consumer to select a higher guaranteed no lapse premium for limited pay variations. No lapse UL policies are not something you would find in Canada.
Note: Last month we indicated a willingness to expand our no lapse UL categories to offer comparisons of common limited payment periods. We remain very willing to move forward with that enhancement. Unfortunately NO COMPANY has yet to provide us with data for that purpose. If you want to help us get the ball rolling, you can start lobbying your company to get Compulife the data that it needs.
In Canada we quote joint life, last-do-die insurance policies. In the U.S. such policies are referred to as survivorship policies. The technology to quote survivorship policies is ready to go because we have already built it for the Canadian market. As with limited pay no lapse UL, we would be happy to offer that option to U.S. subscribers when and if we get companies providing us with their joint age calculation formulas. This is an example of a function/feature that we originally built for Canada, that is ready to go when and if we can use it here in the U.S.
With that in mind the work we will be doing to develop Critical Illness comparisons for Canada will mean that we will be ready to roll out CI comparisons for U.S. subscribers when and if such policies become common or popular in the U.S. market.
In that regard I would be curious to hear what U.S. subscribers think of Critical Illness insurance. Personally, I don’t own one and I don’t see the need.
In my mind insurance is used to replace a financial loss caused by a named risk. If you die your dependents lose your paycheck and so you buy life insurance to give those dependents the money that is then used to replace the income that they lost because you died. You buy house insurance to replace your home if it burns down or is blown apart by a tornado.
Financial loss may or may not be triggered by a critical illness. If a heart attack is covered by the policy, and you have a heart attack, then the policy pays a lump sum (congratulations, you’re a winner). My point and question is, “What was the financial loss that was caused by the heart attack?” Many people have a heart attack and are back to work in a week or two while others are disabled and unable to work. But being able to work is not a determining factor in whether you collect a large lump sum from a CI policy, it pays the owner that money regardless of whether there was financial loss. If you are paying premiums in order to receive money when there has been no loss, the concept is much more like gambling than insurance.
It seems to me that if you are concerned about loss of income because of disability arising from an illness, then you really need disability insurance. Disability insurance covers a much broader range of risks and is much more focussed on replacing an income lost due to ANY accident or illness, not just a list of predetermined illnesses. And if you have disability insurance why would you then need a lump sum if the illness happens to be one of the ones named in the CI policy? For example, if you have enough real life insurance, why would you need or want accidental death insurance?
It seems to me that buying insurance should not go beyond covering financial loss caused by a catastrophic event. Sure you could use your money to buy a policy that covers you for cancer or heart attack, but is that really a good use of your money? As I said before, I see the need for an insurance policy to pay me the value of my house if it is wrecked by a tornado. The question is, do I need a policy to pay me the value of my house because a tornado came close?
What do you think and what do you know about the subject? Feel free to email your comments to me at barneyrl@compulife.
The balance of this bulletin is taken from our Canadian Bulletin and is for information only.
Compulife’s Critical Illness comparisons will be PREMIUM ONLY. For that reason work on the project will go quite quickly as there will be no need for any new mechanisms to store and retrieve data.
The problem with a premium comparison ONLY is that unlike life insurance, which provides standardized coverage no matter which policy you buy, two different CI policies may cover totally different risks and there is NO standardization of coverages. With that in mind Compulife does not want our comparisons to ignore that issue. On the other hand, and as we have discussed before, we lack the expertise to analyze these differences.
The joint project with Dick will be an “agent only” web site called www.cianalyzer.com. The site will be a password protected site which Compulife subscribers will have direct access to by the click of a link. Agents who are NOT Compulife subscribers will be able to register FREE to use the site. The site will be a resource for information and comparative analysis of different policy contracts and a discussion of the differences between policies.
Because it will take time to get the new site up and running, and because we do not wish to delay rolling out the premium comparison software, we have devised an interim and permanent way for our subscribers to obtain information about CI policies and the things they cover.
To ensure that agents know about this new feature, the following WARNING will appear on the top of all comparisons:
WARNING: The following is a price comparison ONLY of Critical Illness policies.
Different policies cover different Critial Illnesses. You must carefully consider the
coverages provided by any policy that you are recommending or buying.
IMPORTANT: To review the policy contract for any of the following policies,
double left click on any of the products quoted. This will display a single product
window. At the top of that window, select “options”. The last option on the list is
“sample policy”. Select “sample policy” to review coverages for that policy.
When the agent click on “sample policy” on the options list, the forms library will retrieve the sample policy and display it in a PDF window, just as it does with any other form.
A modified version of the above warning will appear on the bottom of any CI comparisons or individual quotes you print. It will say:
WARNING: The above is a price comparison ONLY of Critical Illness policies. Different policies cover different illnesses.
In other words, one policy may NOT cover you for something another policy does. Your agent has the ability to provide
you with a sample policy for any of the above policies. Make certain that you obtain and read that sample policy carefully.
We think the new pages are better organized and look more professional. The question is, did anyone notice? Tell us what you think? Do you have any suggestions?
Tutorials will be short and topically arranged. For example, the first tutorial will be an audio visual presentation of the Dare to Compare Challenge, which is a training tutorial we use for first time users. Someone will actually be able to sit and watch us do that tutorial in a video. We think for those who fear touching the keyboard, this will be useful.
The second tutorial that we are planning will explain how to use our “ROP Analysis”. We think that function in the software is overlooked but is very useful, particularly when selling ROP products to high end insurance buyers who actually understand the time value of money. Once we have that tutorial ready, we will talk about it in the future Update News, and invite you to check it out. At that point we will ask if there other features and options in Compulife that you would like us to cover in the tutorials? Let us know.