Oct

10

Top 10 Questions To Ask: Mortgage Protection

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National Agents Alliance is the # 1 provider of mortgage protection leads in the nation. Below is a good resource you can use when shopping for mortgage protection.

1. How much insurance do I need?

Calculating the amount of insurance a family needs is unique to each individual. It really depends on two things, your personal goals and your budget. Your budget is really the most important because that will dictate how much you can afford. Monthly premiums range from $5 to as high as $10,000 depending on your unique situation. The best way to start is to ask yourself the difficult question, what would change if something would happen to me?

In addition to emotional loss there will be a financial loss of income. Some families are able to afford a policy that will pay off the home, provide the spouse with a lifetime income and send the children to college.

Most families just starting out are able to simply provide enough to pay off the house so the spouse only has to earn enough to pay bills.

Yet, many families are only able to provide enough money to keep the family in the home for 5 years giving them enough time to adjust and sell the home without a loss. There is more than one way to calculate your insurance need.

Here is a financial work sheet you can use to get started.

Death Benefit

Add the following:

+ Mortgage Balance

+ Other Debt

+ Families Annual Expenses X 50 years

+ College for children

+ Other

Total Need = _______________

Now subtract what assets you have available to cover what you need.

- Existing Insurance Policies (Do not include group plans.)

Total Need = _______________

2. How should I include my policy at work?

This day in age the average worker stays at his company for 3 years. Each time you change companies you lose your benefits and must reapply for new.

As you grow older you naturally become less healthy, more prone to sickness and weakness thus reducing your chances to ever obtain protection outside of your company.

You can never be assured that your company will offer the right amount of coverage for your situation.

A rule of thumb is to consider any decent offering in your company benefits as icing on the cake and not to use the benefits in calculating your insurance needs.

3. Which is right for me – Term or permanent mortgage protection insurance ?

The answer to this question completely depends on your goals. Permanent coverage will require a slightly larger monthly outlay of cash but you are guaranteed to have that coverage forever.

If the decision is between waiting to afford permanent coverage vs buying term now, always buy term now and convert to permanent coverage later. Waiting is never worth the risk of not qualifying for coverage later.

How do you know if you need the coverage forever or just for the short term? That’s easy. Do you plan on being wealthy and having a significant taxable estate or will you just be scraping by?

Having permanent life insurance in your plan can substantially maximize the legacy you leave behind, increase your tax free income in retirement, provide for college expenses, and pay for final expenses including services and taxes.

4. How can I find the lowest price for insurance?

The life insurance industry is a government regulated industry so the prices most all fall within a certain range which makes them not much better than each other.

Shopping for life insurance can be a draining, time consuming task and 99% of the time you come to find out the $20 you thought you saved in premium is for people in the best of health like professional athletes and Olympians, a whopping .001% of the population.

You will also notice that all of the online quote tools make reference in fine print to something like this “subject to more detailed application review and medical exam.” You end up wasting a lot of your time for savings that never really existed in the first place.

The best use of your time is with a qualified agent helping you determine your needs with his expertise in the industry to find the best possible match for you.

5. Where can I buy life insurance?

You can buy insurance over the internet, over the phone, and or in person. Because life insurance has so many features that accomplish different goals, the best way to understand what you qualify for and what is appropriate for your family is to meet a qualified agent at your home.

Remember, that an agent willing to take the time to drive to your home, sit down at your kitchen table, look you and your family square in the eyes and help you determine what your needs are based on your unique family goals is someone you want to do business with.

It’s a shame how many agents out there will try to spend 5 quick minutes over the phone with you for a quick commission and then you’ll never hear from them again.

What’s even more challenging is reaching folks over the phone these days. (Push 1 for sales, push 2 for ……..”Ahhh, can I please just talk to a person!”)

As far as the internet goes… how is a computer supposed to understand me and my family’s unique needs?

6. How can I get the lowest premiums available?

Health, hobbies and lifestyle. All of the following result in higher rates: smoking, over weight, high risk hobbies (sky diving, scuba diving, cliff climbing etc),poor driving record and criminal history.

If you are in a situation where you would like to change some of these habits and you are contemplating waiting to apply for coverage, don’t!

By waiting you run the risk of attracting a more serious disease due to your current behavior and you may never qualify for insurance again.

The best thing is to apply for coverage under your current condition and when you improve or change your condition you can retake a medical exam and get your premiums lowered or apply for new coverage.

7. How to get more insurance for less $.

The best time to buy for insurance is when you are young. Contrary to what many people think, (You shouldn’t buy insurance unless you have kids.) buying insurance when you are young guarantees that you will have insurance even if you attract some condition in the future.

For the less than a soda per day you can guarantee coverage for yourself and your future family.

Also, be conscious of your birthday. Some companies rate you by your last birthay (which is best) or your nearest birthday thus effecting your rates.

The insurance works similar to most products. The more you buy, the cheaper it gets. You are usually best off buying at a price break like $250k, 500k, or a million to save the most money.

8. How long of a term is right for me?

Determining the length of your coverage has everything to do with your personal goals. Refer back to question # 1.

9. Should I buy a policy for my children?

Refer to question # 7. In addition to guaranteeing coverage for a child when he is young, a insurance policy can also jump start a child’s retirement savings replacing the disappearing social security income.

10. What ratings should I look for ? Buy from a financially strong company.

The insurance company should have an “A” rating or higher from rating agencies such as A.M. Best, Standard & Poor’s, Duff & Phelps, Weiss, Moody’s and Fitch Ratings.

Here are a couple bonus questions.

11. How often should I review my policy?

You should review your policy annually. Be aware of old rate tables which may dramatically result in you paying higher premiums than necessary.

Your life insurance needs will change over the years when you buy property, marry, divorce, have a child or start caring for an aging parent.

By reviewing annually with your agent you can rest assured that your family is protected and aware of any changes in your policy or the industry.

12. Do I have to take a medical exam?

You have the choice of taking a medical exam or not. Many people are pressured into taking a medical exams to obtain lower rates and often it backfires causing them to be rated up and costing them even more money than if they would have become insured without a medical exam.

In some cases, people are even declined due to a surprise found in their medical exam.

Had they not taken the medical exam and not known about their condition they would have been answering the health questions honestly and qualified for protection without a medical exam.

If you are somebody in of mortgage protection consider working with National Agents Alliance. You can learn more about working with our team at

The #1 National Agents Alliance Team