Challenge to life companies

[Robert L. Barney]

In conjunction with an article I am doing for www.term4sale.com, called "Go Long on Term Life Insurance", I am challenging life insurance companies to create a series of level term to 65, 70 and 75 products. I have even suggested a brand name called "Term to Retire".

IMPORTANT: I feel so strongly about this idea that I am undertaking that Compulife will create Term to 65, 70 and 75 categories if ONLY ONE company introduces these products.

The product idea should be quite simple to price.

For example, a Term to 75 product is nothing more than a 10 year term for a 65 year old, 15 year term for a 60 year old, a 20 year term for a 55 year old, 25 year term for a 50 year old and a 30 year term for a 45 year old.

A Term to 65 product is nothing more than a 10 year term for a 55 year old, 15 year term for a 50 year old, a 20 year term for a 45 year old, 25 year term for a 40 year old and a 30 year term for a 35 year old.

As you can see, lots of these products are already available. Here what's missing:

1. The oddball years in between. For example, if I am 52 and I want a Term to 75, I need a 23 year term plan. It's currently not available.

2. People under age 45 cannot get term periods long enough to get them a level premium to age 75. People under age 35 cannot get term periods long enough to get a level premium to age 65.

It is the second area, and the lack of products for younger people, that needs to be addressed by insurers. It is why I am issuing this challenge and will be pushing this development concept over the next year.

For example, I have a son who is 26. I would like him to be able to get a Term to 65 policy which would require a level premium period for 39 years. Such a product is NOT available that I am aware of.

Having noted that Empire Life, before it ceased selling policies, did offer a no lapse U/L product where you could dial in the coverage period and get a premium guarantee. One of my other kids, who was 26 at the time, needed a Term to 65 and so we got a 39 year guaranteed no lapse U/L product. The premium wasn't that much more than a competitive 30 year term.

Are there other companies offering no lapse U/L on this basis? If yes, I would like to get my hands on no lapse premiums for level premium/coverage to age 65, 70 and 75. I would be happy to include those no lapse U/L products in the categories even if only one company provides me with the rates for this scenario.

Normally I don't do stuff like this but in my view, this is an area which needs to be addressed. Younger people cannot get term products with level periods that are long enough and I think introducing these product categories will put pressure on the industry to respond.

I also think it will give agents more expensive term for younger people, making sales of insurance to younger people more profitable without having to ignore the amount of insurance younger insurance clients need.

I think this is a great product concept - Term to Retire - because a lot of people will see the need for term insurance until people stop working at retirement. I suspect the media and most finanancial gurus will be keen on the concept.

And one last idea. I think Level term to 65, 70 or 75, with ROP is also a very sellable concept. Insurance until you retire, and some cash back for your retirement. Of course I would also like to see the option of a reduced paid up policy, in lieu of taking the cash, as an option.

So what about it life companies, anyone ready to take on the Compulife challenge.

What do you folks think?