Mortgage Protection Insurance by Phone??

Discussion in 'Getting Started Selling Insurance' started by tesflex, May 9, 2009.

  1. SportsNut
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    SportsNut Well-Known Member

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    Years and years ago... maybe 24 or 25 to be exact, prior to the term explosion of level and guaranteed term boom, I used to use a decent UL product and a software product which would graph the decline of the clients mtg, based on current amortization, along with c/v accumulation of the UL. At the point where the two intersected it would show that they could use the c/v to payoff the mtg balance, usually about yr 16 or 17 of a 30 yr mtg... (based on then current int rates, which didn't hold up either). Now likely no one ever did so, but the visual was a powerful tool in selling the use of UL for that the purpose you mentioned.

    I have NO idea where that program came from... but it would be easy to resurrect in MS Office, I would think.
     
    Last edited: May 18, 2009
  2. rbrewer
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    rbrewer Well-Known Member

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    If you are able to resurrect it or get a copy I would be interested in a copy. Thanks
     
  3. briko3
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    briko3 Well-Known Member

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    I second that!
     
  4. annuityseller
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    annuityseller Well-Known Member

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    I'll third anything that would make me money.you could use the current amortization and a seperate life Illustration?? A EIUL would be the best candidate??
     
  5. SalemInsuranceGuy
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    SalemInsuranceGuy Well-Known Member

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    I think the EIUL is the best candidate. Keep in mind the only way it could work it to max fund it. So let's say you write the EIUL for the face amount to pay off the mortgage, say 300k. Maybe the target premium is $240 a month, but you can put a total maximum of $400 a month into it without violating the guidelines to turn it into a MEC. So that's an extra $160 a month funding it, which means there will be cash value in year 1. I haven't run a proposal on one in a couple years but I would assume that using max funding the cash value should equal the mortgage payoff somewhere around the 20 year point on a 30 year mortgage. At this point the client could pull the cash value out, pay off the house and surrender the mortgage. It will not work at just target premium though. If the client can't max fund it then you're better off just going with term and letting them pay the mortgage down early another way.

    The benefits are the client still writes off the mortgage interest in full for 20 years. If they simply add that extra $160 to the mortgage each month it would have reduced their interest write off. While at the same time the cash growing in max funded EIUL is growing tax deferred. If the client does lose their job they could borrow on the policy to pay their mortgage unlike if they just paid it down by sending in extra money. Of course when they surrender the policy there will be a tax gain, but all the premiums can be used as part of the cost basis. The risks would be if the EIUL doesn't perform as well as expected.

    A whole life policy wouldn't work because it's a set amount and you can't contribute enough excess premiums to it and the cash value wouldn't accumulate as quickly. A 20 pay whole life would be interesting to run, but still with the lower interest rate probably wouldn't fair as well. The same on a regular UL. I don't think it would fair as well because of the lower interest rate. A VUL has the market risk and that's one thing we're trying to avoid. An EIA wouldn't work as well because it still leaves the owner unprotected in case of death and the tax penalties if the client is under 59 1/2 when they cash out. I would also think this would only work well on a newer, within the first year or two of a brand new 30 year mortgage.

    Definately not for every client and it's a lot harder to explain. Again only good for new mortage clients who are series about a mortgage reduction strategy. I haven't done the research lately and not every EIUL would work as well as others. One would have to do a lot of research or play around on WINFLEX to find the best one for the situation. But it does give another option for some clients.
     
  6. rbrewer
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    rbrewer Well-Known Member

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    Many company's now have software as to prove your point and not be so confusing. I like the idea of EUL as they can borrow from it and use it for income or pay things off like home or car or to make purchase and pay themselves back.
    I also would like to see how much overfunding would be needed verses overpayment to mortgage co.RE: gain/tax write off. Need some good software to compare all the numbers.
     
  7. coreyfgarber
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    coreyfgarber New Member

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    When you finally meet with clients The Insurance Pros focus on finding out financial goals and encourage helping people find money to save through IULs or whole life. I've read some of this material and plan to at least sign up for their online resources for $25 mth. This sounds like a nice bridge to show clients that you are doing more than just getting a quick sale and as an adviser you have something to offer.
     
  8. HipOldGuy
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    HipOldGuy New Member

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    Very smart idea.
     
  9. WinoBlues
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    WinoBlues Well-Known Member

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    Very old concept, new product.
     
  10. Garland Hughes
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    Garland Hughes New Member

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    I don't know about the mortgage protection, but Lamar Skipper is as good as they get. I sold final expense and later sold larger amounts of life insurance by phone through him and work smarter ins. He was honest, up front 100% of the time, helpful in every way. I still consider him as a friend and I have never worked for anyone who treated me better. He is however, very tight with the contract levels and I left to get a higher commission percentage. You can believe what he tells you. I trust him completely and so can everyone else.

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    I have never worked for anyone better than Lamar Skipper. He is totally honest and helpful. Always available and patient with you. I really admire the man. He is however, very tight with the commission percentages. I left to get higher contact levels but he is a good guy
     
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