Difference Between Traditional Term & Mortgage Protection Term

MaxReaver

Expert
67
Texas
So,

Been a while since I have been at this and a question came up...

What is the difference between traditionally underwritten term life and "mortgage protection" term?

I know traditional term commissions now seem to cap out around 90% commission but some mortgage protection stuff seems to pay a higher %. What's the catch?
 
Traditional term is fully underwritten. Typically required full blood profile & urine sample.

Mortgage protection term is non medical term which is considered simplified Issue. Although, mortgage protection is just a marketing term just like final expense is.
 
Traditional term is fully underwritten. Typically required full blood profile & urine sample.

Mortgage protection term is non medical term which is considered simplified Issue. Although, mortgage protection is just a marketing term just like final expense is.

Thank you for the reply.

Does mortgage protection term require that the bank be the beneficiary to pay off the mortgage or can the owner designate another beneficiary of their own?
 
Traditional term has a set face amount and the premium is subject to increases over time.

Mortgage insurance tends to be declining face amount with a set premium amount.

In most cases traditional term is underwritten and premium will reflect the insured's health. Good health tends to lead to good rates.

Mortgage term tends to be priced higher in comparison because the health of the insured is not considered.

As far as what pays what, I have no idea. I learned a long time ago that worrying about commission levels, rather than what you can get in place for the prospect tends to have this is the calculation "Commission X zero =" .
 
So,

Been a while since I have been at this and a question came up...

What is the difference between traditionally underwritten term life and "mortgage protection" term?

I know traditional term commissions now seem to cap out around 90% commission but some mortgage protection stuff seems to pay a higher %. What's the catch?

Mortgage protection is simply a marketing term for term insurance.

Having a mortgage for some is just a gimmick to buy SI term up to certain limits.

But mostly it's just about marketing. Pretending to tie it to a mortgage is just a way to generate leads.

Many of the companies that were big in promoting MP are out of the business, F&G, Shenandoah, Chase, just to name a few. And most of the ones still in it, Americo, Foresters, just to name a couple, will do SI term with no mortgage requirements.

It's just a way to get in front of people. The product is still regular ole term.
 
In the beginning, mortgage protection insurance named the mortgage company as beneficiary.

And, mortgage protection was DECREASING TERM just like your mortgage amount decrease as you pay it off.

Then, level term insurance became so popular that is was the same cost so agents felt it was a much better deal.
 
Since 2003 Most Mortgage term products the beneficiary is not the bank. On top of that most Mortgage term products are not decreasing. That being said it's a marketing gimmick.

As far as traditional term commissions don't cap out @ 90% for most of the carriers.
 
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