Cheap mortgage protection coverage quotes for low cost mortgage life insurance is deceiving consumers. No mortgage life insurance company exists. Cheap quotes to cover mortgages with inferior decreasing term hurts consumers, makes fools of life insurance agents, and profits many insurance companies. Here is the truth exposed.
Most life agents are untrained and unqualified; giving rate quotes that inadequately cover a mortgage, or is not protecting a home owners true needs. Ask owners of mortgaged houses 15 years later if they were insured properly. Ask the families of deceased mortgage payers if the coverage was right when their loved one’s life was taken.
“Only seven out of one hundred life insurance agents last an initial survival term of covering consumers for four years. Even fewer properly help homeowners protect mortgaged homes and give quotes of the cheapest term insurance.” Quote by Donald Yerke, who is an Expert Advisor. In fact when asked what mortgage protection life insurance is, the answer is unanimously decreasing term or level term. This is the same answer given by almost all consumers and unfortunately representatives of insurance companies.
Visualize with me this similar situation of consumers not being properly informed of the risks, even though improper coverage can be a lifetime payable risk. The home owners get numerous quotes to protect against dreaded house break-ins. Each sales agent intentionally provides the lowest rate available to that consumer. The owners evaluate by rating the security systems by cheapest total cost with installation.
Next, picture all protected doors, and door wall entries covered by sensitive alarms. The home owners and family buy this added protection to have a secure feeling of being adequately covered. Of course the selling representative and the alarm company both make a profit off the sale. Well, as you well already know, everything in life does not go as planned.
Now, hear the breaking of the door way glass flying without the sound of any alarm blasting. The professional burglar struts right in without ever touching an alarm activated door. He or she is now an immediate threat to all your belongings, but worse yet is the threat to the security of your family. Had the relatively low cost adding of installing motion sensors been explained, a lifesaver addition could have been easily included.
You might very well remember an old funny shaped board game, called “Life.” Sensibly you and your spouse should be given this reality game by the real estate agent at your house closing. Playing the game quickly demonstrates many of the risky occasions, costs, and unexpected factors that occur despite your desire to determine your own destiny. In fact, you should insist that your agent plays a complete round before providing any mortgage insurance rate costs or advice to you.
Remember that no one has ever won the real game of life.
Same Rates: All insurance companies should charge the same rates for the same coverage. Ask yourself this, “Am I more of a risk to die if I buy insurance with Company X or Company Z”? Each company by insurance laws is required to put the same amount of money in reserves to pay future claims. Now a few things you might consider “unethical” occur behind the scenes to make it look like one company definitely has lower rates than another. After showing you these tricks, you might see why it is unwise to buy mortgage protection with companies quoting the lowest rates.
Too Many Claims: If Company Z suddenly experiences too many death claims, there will not be enough money in reserves to pay out claims, and the company is put into receivership. If you have a claim, your beneficiary may or may not be fully paid. It is very rare for companies to pay all claims, and come back out of receivership. The United States government spent billions with a bailout to AIG Life, which could still go into receivership.
Executive Compensation: Executives, and directors of the insurer will get many years of fat salaries, right up until the time a company needs to be liquidated. There is nothing to stop these executives from starting another term specialty company with high executive salaries and bonuses. Performance of the company to shareholders and payments to consumers that buy protection have no mandated effect on their pay.
Buying Business: It is true that more life insurance will be written by those companies with the cheapest rate quotes. The more money collected, the more executives can pay themselves. For the first five years, the people with mortgaged homes tend to be younger and in good health. For this reason very few claims are paid out. Lots of new policies of people buying lost cost protection flow in. When the claims start catching up to reserves, executives take their money and run.
Overpaying Agents: Compensate an agent 30% higher for writing your term policies, and the agent gets bribed in. Making $30,000 more for selling the same amount of insurance for covering mortgages and other needs is a great deal for the agent. In this case the agent only shows the consumer the policies that pay him or her the highest amount of compensation.
The reality of insufficient reserves and cash assets can occur is suddenly more likely. This puts home owners’ beneficiaries in danger of getting paid. The actual company previously mentioned would be considered by some knowledgeable agents of trying all these tricks.
Now that I unlocked the hidden truth trick vault, I will reveal a couple secrets.
A True Secret: Many companies would like to have my head for telling this. Most salespeople are trained to convince you to buy and have very little knowledge what protects a consumer. It is easier for them to get you suckered in with low price rate quotes, even though the cheapest rates often provide subpar benefits.
Another Secret: Years after buying so called “mortgage protection life insurance”, the consumer meets a professional expert in this protection area and shows them options that should have been presented, but now the low cost rates no longer exist because of health or age.
Should you talk with an agent only about your mortgaged house being paid off when you die? Or should you examine your situation now, when your house is paid off, and when you are retired?
If you have a house with a mortgage there are a dozen questions related to buying mortgage protection coverage you must ask yourself right now.
The Quiz:
1. 20 years from now will you be in the same house, or a home with a higher value and mortgage balance?
2. If you or your spouse should have a heart attack or cancer in the next 15 years, would returning to work to keep making mortgage payments be required?
3. Should after having a major health incident, you decide to purchase more coverage, do you think your rate would be higher? Can any insurance companies deny you coverage?
4. Do you think your chances of having a health problem are higher now or later when you need more protection with a more expensive home and college age kids?
5. Which takes longer in most states, evicting an apartment or home renter or foreclosing on someone unable to make the monthly payments on their home?
6. If a purchase of life insurance was made to cover your mortgage balance, how would it pay the balance if one of you died and you had taken out a second mortgage (due to job loss), or a line of credit for remodeling?
7. If you had purchased a home worth $200,000, mortgaged for 30 years at 6 % how much would you still owe in total payments after 15 years?
8. Did an insurance agent professional ever explain the term deferred annuity to you, where you could pay this same house up to 10 years early and save $150,000 in principal and interest?
9. In case of death, and the home is paid off, would the lack of a paycheck allow for taxes, groceries, clothing, transportation, and entertainment for the remaining family members?
10. How much more interest with guaranteed principal does the mortgage lending company earn compared to your low interest rates at the bank?
11. If you buy decreasing term is it possible for the amount of mortgage protection coverage to decrease faster than the balance on your home?
12. If you are buying level term protection, is it possible that at some point the insurer can refuse to protect you any longer?
13. Why would an agent want to sell you cash value life insurance also called whole life or universal life to keep you protected during the time you are mortgaging the home?
14. Why is it profitable for an insurance company of 10,000 current agents, and in business over 100 years, to hire 3,500 more agents in the next 12 months?
15. For what reasons does a mortgage protection life insurance expert tell you that cheap decreasing term and level term policies based on your current mortgage are a poor decision to buy even with their low cost rate quotes?
Warning: Very few agents of small or large companies understand mortgage protection insurance, and they will not be in the business when you or your spouse die, or health changes occur.
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