When I bought my house back in March, I kept receiving the weirdest letters. The cheap-looking envelopes all had my lender’s name on it. Knowing I didn’t owe them a payment I rushed to open it! It was a letter advising me that I should immediately get mortgage protection insurance. Oddly no information stated anywhere that this form was from my lender except on the outside of the envelope. In fact, there was no contact information on the envelope anywhere. I started to get a little angry after realizing someone was attempting to pose as my lender, this type of communication medium made mortgage protection insurance feel like a scam.
You would have thought the letters would have been confined to one. No, not just one I received at least four more of the mortgage protection insurance lead forms. Finally, one had a 1-800 number on it for me to call. I called the number to give them a hard time. Of course, I didn’t get anybody to speak to, so I am not sure how they planned to maximize this as a lead generator. Did they think I was so stupid that I would just fill the form out and send it in? Months later I did have someone call me trying to stress the importance of mortgage protection insurance, I wasn’t that nice due to all the letters pretending to be my lender that I had received from the other mortgage protection insurance lead generators.
Other signs you might be dealing with one of these shady operations is they will have warnings like this on the letter or envelope.
- IMPORTANT NOTICE! PLEASE COMPLETE AND RETURN!
- FINAL NOTICE! MORTGAGE PROTECTION CARD!
- NOTICE OF OFFERING! MORTGAGE FREE HOME PROTECTION!
If you just bought a house, you are probably getting way too many of these unethical lead forms? You are probably wondering if I die, I want my family to keep my house but what exactly is mortgage protection insurance? You are correct in thinking that it is not PMI (Private mortgage insurance). PMI is the insurance to cover the difference in cost if your lender had to foreclose on your house if you had an FHA loan. Most homeowners pay PMI if they have not made a 20 percent down payment.
Mortgage protection insurance is just life insurance.
It’s is life insurance that decreases in value through the life of your home loan. It is usually more costly because there is no physical exam required for it. It is not a flexible policy meaning the money will most likely go straight to the lender instead of where you need the mortgage protection insurance benefits to go. Mortgage protection insurance providers do not much transparency because it is not the type of insurance you can get quotes for online thus cause the prices tend not to be similar. Mortgage protection insurance costs (premiums) are not fixed so don’t be surprised if you get premiums that continually rise from any type of mortgage protection insurance. If a mortgage protection insurance policy is your only choice due to poor health you would still be better off with a term life policy with no physical exam.
The FTC has written warnings about this type of insurance with the questions you should ask before buying it. What is the solution for your family to keep your home if you should die? The solution is simple low-cost term life insurance. There are many policies that can cover your mortgage and then some that cost only a portion of what mortgage protection insurance does. In fact, most term life insurance policies are so cheap that it should pay off the house and other debts you might have if you were to die. Some term life insurance policies could even cut the cost of what you would or are paying for your mortgage protection insurance!
If you have just purchased a home, you probably want an insurance advisor to speak to about these issues. Don’t hesitate to contact us to discuss term life insurance or any other financial issue that might be bothering you. We promise to find a policy that fits you and your financial goals. You can get a quote directly off our website even before we speak. While you are here check out our article about whether bad credit hurts your life insurance premiums.
I am a term life, infinity banking concept, indexed universal life insurance, and annuities advisor. I am looking to give Utahans a choice in life insurance as an independent advisor. I represent over 25 different insurance carriers on your behalf so we can find which one will approve you for the best policy. I started this company (Wasatch Smart Finance) so people like you could finally get honest answers & advice from advisors who have a comprehensive knowledge of finance and estate issues. Also as a Veteran, I want to assist other Veterans in their financial journeys.