Mortgage Protection

[bill3173]

The customer paid a level premium for 15 or 30 years. It was an easy sale. I don't know if that's still available these days.

Protective absorbed two of the carriers that I used for those policies: Western Reserve and Empire General. Life Investors also had a decreasing term, but I don't know if TA still offers it.
I remember them being a lot of trouble, to do it the right way, making sure that it was filed properly with the carrier, and with the Bank of the insured.

 

[Todd King]

Americo has a decreasing term.

 

[Allen Trent]

Americo has a decreasing term.

is it more expensive than most level term though? that is what I had seen in the past with the very few carriers still offering mortgage/decreasing term

with inflation & consumers consistently refinancing houses/cars, it is rare to see people need less face amount each year

 

[bill3173]

is it more expensive than most level term though? that is what I had seen in the past with the very few carriers still offering mortgage/decreasing term

with inflation & consumers consistently refinancing houses/cars, it is rare to see people need less face amount each year

Yes, it was more expensive, and the last guy I sold it to demanded the dt. The reason that I got him to buy from me is that I didn't try to sell him anything else. He sort of gruffly told me that he only wanted to cover his mortgage, and didn't appreciate the other salesman explaining to him the great deals on level term.

The others weren't as vocal but I think it was pretty much the same sort of thing. They didn't mind paying a little more to leave less...personal/family reason is what I guessed.

 

[Allen Trent]

They didn't mind paying a little more to leave less

I love it, I can see the advertising now.

"irritated with your loved ones? Worried what they might do if there is a little extra money left over after banker/used car lot guy get paid? For just 20% more than having the better policy, you can get this mediocre one to assure your loved ones dont speak highly of you after you are gone"

Call now to apply for our innovative "pay more, leave less" policy

 

[Todd King]

I love it, I can see the advertising now.

"irritated with your loved ones? Worried what they might do if there is a little extra money left over after banker/used car lot guy get paid? For just 20% more than having the better policy, you can get this mediocre one to assure your loved ones dont speak highly of you after you are gone"

Call now to apply for our innovative "pay more, leave less" policy

Beautiful!!

 

[bill3173]

I wonder how many agents that bill themselves as selling MP, actually tie it to the Mortgage. It's an easy way to set yourself apart from the herd, but in practice it's a lot of trouble for a small premium.

 

[Allen Trent]

I wonder how many agents that bill themselves as selling MP, actually tie it to the Mortgage. It's an easy way to set yourself apart from the herd, but in practice it's a lot of trouble for a small premium.

For sure, likely more of a concept. Almost none of it it is directly tied to a specific mortgage & likely shouldn't be. Definitely wouldn't be good for a family to make the bank the actual beneficiary.

Then, most life carrier collateral assignment forms are not loan specific, they are bank specific. I have several horror stories in my carrier of outdated collateral assignments that didn't get updated:

1. Commercial client put collateral assignment on his UL for a business loan. 30 years later at his death & 10 years after business loan paid off, the collateral assignment was still on policy. While there was no business loan, the client did have a car & house loan with same bank. The bank took those amounts from the claim before signing the collateral release.

2. Client had crashing VUL & wanted to 1035 exchange to new better policy. He had a collateral assignment fr a very small town bank that had been sold twice & had closed all local branches. After 18 months of the client trying to locate someone at the new parent bank to sign the release, they have up. The bank couldn't verify or confirm the loan was satisfied.

3. Several other situations where clients wanted to convert to WL, but when there is a collateral assignment the bank controls 100% the changes that can be made.

In short, I see few reasons a mortgage protection concept agent would want to really formalize it compared to just say the proceeds will be there for the need if it is decided to pay the loan off or if there is a more pressing need at the time like kids education or spouse income who is out of work etc

 

[bill3173]

Then, most life carrier collateral assignment forms are not loan specific:

Ugh, I never placed one that wasn't loan specific. The loan number is identified on the collateral assignment form, and a copy is filed with the loan docs at the bank, and the carrier keeps a copy. It is in the language of the assignment, that the bank only gets the amount necessary to satisfy the loan, and the remainder goes to the bene.

If the loan has been satisfied, the carrier will pay the beneficiary the full amount of the policy. The bene only has to provide the document showing loan satisfaction to the insurer. There is no reason in the world for what happened below, unless the agent didn't know or didn't care. That is truly sad and ridiculous.


1. Commercial client put collateral assignment on his UL for a business loan. 30 years later at his death & 10 years after business loan paid off, the collateral assignment was still on policy. While there was no business loan, the client did have a car & house loan with same bank. The bank took those amounts from the claim before signing the collateral release.

 

[Allen Trent]

Ugh, I never placed one that wasn't loan specific. The loan number is identified on the collateral assignment form, and a copy is filed with the loan docs at the bank, and the carrier keeps a copy. It is in the language of the assignment, that the bank only gets the amount necessary to satisfy the loan, and the remainder goes to the bene.

If the loan has been satisfied, the carrier will pay the beneficiary the full amount of the policy. The bene only has to provide the document showing loan satisfaction to the insurer. There is no reason in the world for what happened below, unless the agent didn't know or didn't care. That is truly sad and ridiculous.


1. Commercial client put collateral assignment on his UL for a business loan. 30 years later at his death & 10 years after business loan paid off, the collateral assignment was still on policy. While there was no business loan, the client did have a car & house loan with same bank. The bank took those amounts from the claim before signing the collateral release.

Agree. Maybe true mortgage/decreasing term is loan specific. But many WL/UL/level term collateral assignments I have seen have no spot for a loan #. Never made sense to me

For instance, here are a couple forms that I believe do not have loan specific info:.

https://www.google.com/url?sa=t&sou...gQFnoECB0QAQ&usg=AOvVaw1D5pyvaGF5YIeKyPLLNc8N

Individuals | Lincoln Financial › ...PDF
Assignment of Life Insurance or Annuity Policy as Collateral Security

https://www.google.com/url?sa=t&sou...gQFnoECAUQAQ&usg=AOvVaw2wFPYxQfqOm3qN5VvD9APW

https://www.google.com/url?sa=t&sou...gQFnoECB4QAQ&usg=AOvVaw2_7Sz5bTWS_CqRPVhaDzog

https://www.google.com/url?sa=t&sou...gQFnoECAoQAQ&usg=AOvVaw0HiiyEPSkkOy97FrNwPUSP