Many people hate saying the word insurance. I however, have never steered away from the truth. As a woman in the business world we call finance, being the traditional “smooth talking” salesman doesn’t work for me. No matter what year it is either 2019 or 1950 woman are still looked at differently. So, I prefer to educate my clients on the financial services I offer instead of just trying to sell them. I have come to realize over my decade in the financial industry a salesman can sweet talk his way into a sale, sure, but an educated client who trusts you has a lower cancellation rate and is more willing to come back for additional financial services and tell their friends. If you are reading this post than you are probably aware of the power in referral business.
So, let’s get to the real reason you are here. To find out what really is mortgage protection and why my method to offering this beneficial product is changing the insurance industry. In my opinion for the better.
Mortgage protection is a simplified issue life insurance product customized to fit the parameters of a mortgage loan. 30, 20, or 15-year terms. How this works is the insurance face amount is matched to the mortgage loan amount in a decreasing term following the mortgage decrease over the loan term.
Some insurance companies offer added benefits such as return of premium. This means at the end of the term or mortgage if the insurance policy is not activated then the premiums the client paid into the policy are returned to them. Many clients favor this feature as they can then later invest the returned premiums for retirement, make a large purchase like a RV or boat, or pay off debts etc. This is a great feature for younger borrowers and folks who aren't the best at saving.
Mortgage protection insurance is beneficial to the borrower or mortgagee because it covers the amount of the loan in the event of a family's provider loss. This assures that the family won’t lose their home or way of life along with the providing family member(s).
For example, a 35-year-old married couple comes in to close on their new home mortgage and the wife is a stay at home mother expecting the couples second child while the husband works a regular middle-class job. The mortgage protection comes in to play as a tool to offer peace of mind if anything were to happen to the husband, the wife and mother would not have to worry about paying the mortgage. The insurance is designed to cover the loan in the event of a loss. Without this coverage the wife and mother would have to go back to school for education in job training, go on the hunt for a new job depending on her skills, sell the home, or risk losing it to foreclosure. With the mortgage protection insurance, the loan will be covered and she can redirect her focus on her family and grieving.
Example two, in this day and age as the cost of living rises more and more families are a two-income household. This means when I look at qualifying borrowers for a mortgage loan I typically need both incomes for the borrowers to qualify. Think about this. If both incomes are needed to qualify what happens if one of those incomes is suddenly gone? The mortgage protection insurance is not only used for single income families but even more so for joint two income families. You can write a joint mortgage protection policy that covers both income earners so if anything were to happen to one of the borrowers the policy proceeds are paid out to the remaining joint policy holder to cover the mortgage loan.
The premiums are lower for mortgage protection policies because of the decreasing term amount making these policies affordable for most borrowers. But really who could afford to not have mortgage protection insurance? Another benefit is that the premiums can also be paid annually typically resulting in a discounted rate making it practically not even noticeable. Most of my mortgage protection policy holders prefer to pay their premium at the same time they pay their other homeowners’ insurance and taxes.
The way I have succeeded in selling this protection is as a mortgage loan officer at the time of loan closing. For more information on my method of offering this product that will not only increase earning potential for mortgage loan officers, but also better serve borrowers, protect your lending institution, and aid in reducing the amount of potential foreclosures in your area, please see the consulting page.
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