WHEN IS A PREMIUM NOT A PREMIUM?

Since the beginning of this author's Technology column, the focus has been on the practical application of technology in the professional agent's or adviser's daily life. We've looked at the perfect office (you have finally migrated to XP Pro, haven't you?), evaluated financial planning software, and considered whether high technology is always the best solution for a given problem. Sometimes it's not; just ask anyone with a crashed Palm Pilot whether the transition from paper to silicon was worth the loss of the next six months of appointment notations! But those of us on the bleeding edge of technology and gadgets trudge on, undaunted by something as trivial as a crashed hard drive.

Since this issue's Journal theme is "insurance issues," it seems natural to look at life insurance technology. At one level, our industry strives to be on the cutting edge of technology: document imaging, intranet access for agents and brokers, and secure inquiries and updates for customers. While we haven't yet figured out how to take lab samples via desktop computer, virtually every other aspect of underwriting is in some stage of technology upgrade to make it faster-and less expensive.

Some of our products are pretty "high tech" as well: indexed universal life and annuity products are one example. They couldn't exist without heavy duty mainframe support from the insurance carriers offering such products. Even the more traditional whole life policy has undergone a significant transformation in the last 25 years, allowing blended-term, paid-up additions riders, and the ability to insure a second (or multiple) lives. Without high-speed computer processing to design, sell, and administer these products, we'd be back in the "dark ages" selling vanilla whole life and strawberry term.

It is noteworthy that life insurance agents were thrust to the forefront of the personal computer/technology revolution with the introduction of universal life and other current assumption and/or indeterminate premium products in the late 1970s and early 1980s. Indeed, at an industry level, insurance agents were among the first to (pardon the pun) univetsally own or have access to PCs in order to run illustrations for these high-tech products, and suddenly illustrations went from the very low-tech "sample ledger book" of my early days selling life insurance to the necessity of...