This topic contains best practices that provide examples of how to configure life memberships.

• Example 1 - One Membership Product

• Example 2 - Separate Life Membership Product

• Example 3 - Kitting Life Membership Products

The purpose of a life membership varies from organization to organization. A life membership may be used to define a membership status, offer special benefits with membership dues, reduce the renewal overhead of a yearly membership, offer extra benefits beyond a regular membership, offer discount pricing, or offer pricing based on life expectancy. A life membership generally has any number of the following characteristics:

• The product's income is deferred over the life of the membership. The deferment concept is the same for all membership dues products except that for a life membership the deferment period is much longer. The length of this period cannot be determined with the same precision as a fixed term membership because the life span of each person is unknown.
• Ordering the product updates a person's or company's member type.
• The membership does not have to be renewed during the life of the member.
• The membership can be offered at a discounted price.
• The membership can be offered with additional products not offered with a regular membership.
• The membership has some type of subscription fulfillment associated with it.

The characteristics of an organization's life membership offering will help determine what configurations to use to create the product in Aptify.

Life memberships are similar to regular memberships; both products defer and recognize income over the life of the membership/subscription and both update the person's or company's member type when they are purchased. Both types of memberships may utilize a pricing matrix to configure different prices based on various circumstances, such as current membership status and quantity ordered.

Because the exact life span of a person is undeterminable, most organizations utilize actuarial tables or set up some kind of table based on age and life expectancy to construct pricing matrices. These matrices evaluate the age of the customer to determine the price of the life membership and the duration of the life membership product for revenue deferment and membership/subscription fulfillment. For example, on average, a customer at age 35 who purchases a life membership will enjoy benefits for a longer period than a customer who orders a life membership at the age 55. It is a common practice to use an actuarial table to estimate the life span of a group of people. Based on these life span estimates, a table can be set up to determine how many years the life membership should last based on the member's age or date of birth. (For this discussion, fictional actuarial resource information is used to configure example price matrices for life membership products. Each organization should utilize its own actuarial resource information to help configure its own pricing schedules.) To provide better customer service, an organization should try to schedule a renewal notice for a life membership two years in advance of the expiration date.

The differences between regular memberships and long-term memberships lie in the functionality that the product performs when it is purchased.

• To track life memberships separately from regular memberships in the member status field, set up a regular membership product and associate it with a regular member type status and set up a long-term membership product and associate it with a specific life membership type status.
• To run a subscription fulfillment on one subscription for all membership types, only one membership product needs to be set up with various prices to account for regular and life memberships.
• If a membership product requires a different membership duration period, it would be best to create separate kit products or product groupings containing different quantities of the same membership product to represent the different life membership periods.

For example, if a regular membership product is configured to last for a period of one year, purchasing a quantity of twenty membership products creates a membership that will last for twenty consecutive years without renewal. To streamline the order entry and subscription fulfillment processes for life memberships, place the regular membership product in a kit product or a product grouping and list a quantity of 20.

The pricing matrix is where an organization's business practices, in relation to price, age, and life expectancy, are defined in Aptify. Based on actuarial life span estimates, a table can be set up to determine how many years the life membership should run based on the member's age (age is simply a function of the date of birth and the current date).

Based on this logic, using a pricing matrix can define the prices for specific long-term memberships. Life memberships can be configured and priced at rates different from regular annual memberships.

There are several scenarios on how to set up Aptify to sell and account for life membership products. Described below are some recommended configurations and the expected results based on these configurations.

Example 1 - One Membership Product

In this setup, the life membership and the regular membership are the same product. The duration and/or the quantity ordered determines if the membership is a life membership or a regular membership. This setup is ideal if tracking information based on membership status or type is not a concern, but the organization prefers to track all membership fulfillments based on one product.

Product Configuration

Product Category

• Create a dues product to be used for ordering regular and life memberships.

Member Type

• Select the Dues Product option and Member member type.

Subscription Type

• Select an established subscription type (annual/monthly/quarterly and enter a matching number of issues). The membership product is deferred at increments matching the subscription type chosen. Generally the subscription type period (annual base) is no more than 1 year (360 days).

Deferred Income

• Make sure the deferred income option is selected.

Prices

• Make sure the Allow Free option is selected.

• When setting up the regular/life membership, create a price matrix that includes Price records for the life membership quantities on the Prices tab. The price for each quantity listed is the total price divided by the quantity. This way when a quantity of 10 is entered on the order form, the price will calculate (price x 10) and return the correct amount in the total column. To accommodate life memberships based on the example actuary table, use the pricing matrix described below.

  Price Name (Age)	Actuarial Years	Quantity (Min/Max)	Membership Type	Price/Qty (enter the amount in bold)
  70 and over	Year of birth to 1937	10 - 10	Member	100/10 = 10.00
  55 - 69	1938 - 1952	20 - 20	Member	200/20 = 10.00
  40 - 54	1953 - 1967	30 - 30	Member	300/30 = 10.00
  0-39	1968 or later	50 - 50	Member	500/50 = 10.00
  Non-Life Membership Order		1-5	Member	50.00

  
  Effects
  Product

• Able to track all the items related to the product in one location: prices, quantities, member type.
• The membership product may be used as part of an assembly kit product or a product grouping, where the kit or group defines how many memberships to purchase.

Member Status

• There is no distinction between a regular member and a life member.
• The life members cannot be tracked because they are labeled Member and not Life Member. This is because the product can only have one member type assigned to it. Also if the member is already a member, when the life member order is taken, the product is trying to update the membership (that may have lapsed) and tries to continue the membership from that earlier date.

Subscription Type

• The subscription type is the same for both life and regular members. The subscription type defines the deferment schedule in the annual base. The length (duration) of the annual base is defined on the subscription type as well. The life and regular membership product use the same annual base.

Quantity

• The quantity entered on an order determines the deferment schedule over the number of memberships purchased. For example, if an annual base is defined as 1 year, the deferment schedule is over the number of years purchased.

Prices

• A pricing matrix helps determine membership duration and scheduled transactions by assigning life membership prices to specific quantities.

Fulfilling Subscriptions

• Subscriptions can be processed in one subscription fulfillment run by selecting the membership product.

GL Transactions

• The membership product as configured will generate the required GL transactions to defer the membership income over the duration of the membership. For a regular or life membership, the product is configured to generate the required number of scheduled transactions to defer and recognize the membership income.

Renewals

• Renewals do not have to be processed each year for each life member because they have ordered a quantity that extends the subscription period.
• Allow free renewals for life members who outlive the ordered life membership period. This will create the subscription at no charge and will not create scheduled transactions because it is has no charge.
• Membership/subscription renewals are processed for free if they outlive the membership period. This avoids any need to recognize more revenue. Some type of reporting will have to be done to view expired life memberships and renew them at no cost to the life member. It is up to the organization to determine the length of the renewal.

Cancellations

• To cancel, just cancel the Subscriptions record at any point in time. To recognize the remaining deferred revenue, if any, create a view of the scheduled transactions for that OrderID record and batch the same view of scheduled transactions. Indicate on the batch that the reason all the future scheduled transactions from this order were included in this particular batch was due to cancellation and the income was not refundable.
• If an organization wishes to issue a refund for the remaining deferred revenue, simply process the cancellation via normal order cancellation practices.

Example 2 - Separate Life Membership Product

This scenario sets up an individual life membership product that is associated with a Life Member member type and contains a pricing matrix. This scenario is useful to track information about life members separately from regular members and only increases the list of products by one product. The order taker determines the quantity after learning the date of birth and age of customer, then applies the age to the pricing matrix and enters the corresponding quantity, which selects the correct price when the quantity is entered on the order form.

Product Configuration

Product

• Create separate dues product for the life membership product.

Member Type

• Create a new membership type called Life Member, if it does not exist. Associate the life membership product with this member type.

Subscription Type

• Select an established subscription type (annual/monthly/quarterly and enter a matching number of issues). The membership product is deferred at increments matching the subscription type chosen. Generally the subscription type period (annual base) is no more than 1 year (360 days).

Deferred Income

• Make sure the deferred income option is selected.

Pricing

• Make sure the Allow Free option is selected.

• Create Prices records for each age range. Take the total price and divide it by the number of years in the life membership. This returns the correct total when a quantity of 10 life memberships for a person in the 10-year range is ordered and creates the deferment schedule correctly. See the table below for examples with specific quantities for each age range.

  Price Name (Age)	Actual Years	Quantity (Min/Max)	Membership Type	Price/Qty
  65 and over	(pre 1942)	10-10	Member	100.00/10 = $10.00
  50-64	1943-1957	20-20	Member	200.00/20= $10.00
  35-49	1958-1972	30-30	Member	300.00/30= $10.00
  0-34	after 1972	40-40	Member	400.00/40 = $10.00

  
  Results
  Product

• The separate life membership product is essentially the same as a regular membership product except that membership status reads Life Member and the membership will not have to be renewed each year or at the end of each annual base period.
• Maintenance of the product requires updating price records if the price of a 20 year life membership changes.
• The life membership product may be used as part of a kit product or product grouping for easier order entry. (See Example 3 for details.)

Member Status

• A separate life membership product provides the ability to track life memberships separately from regular memberships because the Member Type field will list the Life -Member type for those persons/companies that have purchased a life membership product.

Subscription Type

• Subscription type determines the income deferral schedule by examining the subscription type. If required, it can be different from regular membership products.
• The subscription type is generally the same for both life and regular members. The subscription type defines the deferment schedule in the annual base. The length or duration of the annual base is defined on the subscription type, which also helps define the income deferment schedule. The life and regular membership product use the same annual base.

Quantity

• When ordering, a user will have to know what quantity to order for the new life member's age range. This may not be intuitive to the user who cannot select the quantity without knowing the age and range based on that age. The user will need to know what quantities are associated with each age range before entering a quantity for the order.

Prices

• Prices are all contained on the life membership product in separate records with corresponding quantities.

Fulfilling Subscriptions

• A separate membership/subscription fulfillment is done for life memberships because they are a different product from regular memberships.

GL Transactions

• The life membership product as configured will generate the required GL transactions to defer the life membership income over the duration of the life membership. For a life membership, the product is configured to generate the required number of scheduled transactions to defer and recognize the membership income.

Renewals

• Renewals do not have to be processed each year for a life member because they have ordered a quantity that extends the subscription period.
• Membership/subscription renewals are processed for free if they outlive the membership period. This avoids any need to recognize more revenue. Some type of reporting will have to be done to view expired life memberships and renew them at no cost to the life member. It is up to the organization to determine the length of the renewal.

Cancellations

• To cancel, just cancel the Subscriptions record at any point in time. To recognize the remaining deferred revenue, if any, create a view of the scheduled transactions related to the original OrderID and batch the same view of scheduled transactions. Indicate on the batch that the reason all the future scheduled transactions from this order were included in this particular batch was due to cancellation and the income was not refundable.
• If an organization wishes to issue a refund for the remaining deferred revenue, simply process the cancellation via normal cancellation practices.

Example 3 - Kitting Life Membership Products

This scenario requires several kit products containing the life membership product where each kit uses a different quantity of the life membership product to represent the different actuarial groupings. The price matrix is greatly reduced to one or two price records per kit and the order entry person will only have to select the correct kit product and enter a quantity of one. The name of the kit products can indicate the quantity that will be ordered if selected. (For example, Life Membership Kit – 30 Year is the kit product that will order 30 membership products.) This eliminates the cumbersome order entry tasks associated with ordering a life membership when trying to determine the quantity to enter.

The same membership product can be used for single memberships as well as in each kit product that includes the membership for varying amounts of years; or a separate life membership product can be used in each kit product that is configured to offer the life membership. This flexibility can allow an organization to either simplify subscription fulfillment or allow separate tracking of membership status. In both scenarios, the membership can be renewed for free if the life member outlives their purchased membership.

Kit Product Configuration

Product Category

• Create a kit product using a simple product category.

Inventory

• Select the Use Assembly Inventory option on the Inventory tab. This certifies that the membership or life membership products will be listed on the order details portion of the order form and that each membership listed will have its own set of scheduled transaction if necessary.

Prices

• Create Price records as necessary. Enter the total amount of all the products in the kit as the kit price. (If other products are included with the life membership in the kit product, the total amount entered here is tracked proportionally on the Assembly tab.)

Assembly

• On the Assembly tab, enter the membership or life membership product that makes up this kit product. The life membership product should be a dues product that defers income, has the allow free option selected, and may have a member type of Life Member. The life membership product can also be a regular membership product that is used to sell yearly memberships and in this case would not have a member type of Life Member.
• Other products can also be include on this tab if other products are to be sold or included in the sale of the membership.
• For each sub-product, enter the percentage of the total cost of the kit product. Since the membership product is a dues product, this percentage of the total will be deferred over the duration of the membership.
• Enter the quantity of the membership to include when one kit product is ordered. For example, if the purchase of one kit product is for a one year membership enter a quantity of one on the membership sub-product. If the purchase of one kit product is for a 20 year life membership, enter a quantity of 20 on the membership sub-product.

Effects

• The user does not have to calculate what quantity to order; rather they have to know which kit product they need to order based on the customer's age. The quantity of kit products ordered will always be one.
• All life memberships can be fulfilled simultaneously because each kit product is setup to use the same membership or life membership product.
• Order one life membership kit that contains 10 memberships; receive 10 years of membership.
• Member status is updated based on the member type on the membership product included in the kit product.

GL Entries

• The membership products as configured will generate the required GL transactions to defer the membership income over the duration of the membership. For a life membership, the product is configured to generate the required number of scheduled transactions to defer and recognize the life membership income.

Renewals

• Renewals do not have to be processed each year for each life member because they have ordered a kit product which determined the length of the membership period based on the quantity in the kit's sub-products.
• Membership renewals are processed for free if they outlive the membership period. This avoids any need to recognize more revenue. Some type of reporting will have to be done to view expired life memberships and renew them at no cost to the life member. It is up to the organization to determine the length of the renewal. Note that you do not renew the kit product, you renew the life membership product.

Cancellations

• To cancel, just cancel the Subscriptions record at any point in time. To recognize the remaining deferred revenue, if any, create a view of the scheduled transactions for that OrderID record and then batch those records. Indicate on the batch that the reason all the future scheduled transactions from this order were included in this particular batch was due to cancellation and the income was not refundable.
• If an organization wishes to issues a refund for the remaining deferred revenue, simply process the cancellation via normal order cancellation practices.