Pmi?

[Student]

I had a phone call today from a recruiter to start selling mortgage insurance. Been licensed for a while but have been putting feelers out there for a good place to start.

I used to write mortgages so I have an understanding of the work on that side of it. There are so many foreclosures here but sales are picking up because of new people buying.

Thoughts?

 

[djs]

Define mortgage insurance....
You mentioned PMI, but usually insurance agents refer to mortgage insurance as a decreasing term life policy, that will pay off (or come close to???) your mortgage should something happen to you.

It's a tougher sale than it sounds. Also, from my experience, the retention isn't all that great. Any decent life agent can come along and replace it with better coverage probably for less money. That said, there are times when it is very appropriate.

The good thing about insurance is there are a lot of areas you can focus on. You have to find one that fits you and go for it.

Dan

 

[Student]

Define mortgage insurance....
You mentioned PMI, but usually insurance agents refer to mortgage insurance as a decreasing term life policy, that will pay off (or come close to???) your mortgage should something happen to you.

It's a tougher sale than it sounds. Also, from my experience, the retention isn't all that great. Any decent life agent can come along and replace it with better coverage probably for less money. That said, there are times when it is very appropriate.

The good thing about insurance is there are a lot of areas you can focus on. You have to find one that fits you and go for it.

Dan

Thanks Dan...was originally interested in selling health, but I don't need to explain my reservations on that right now. Trying to decide which is the best area, is it a tough sell because people are usually broke by the time they get their deal done? Or is it because they view it like extended warranties on big ticket items?
For someone starting out where do you see the most potential for the future?

 

[djs]

It's a tough sale because 12 people have already offered it to them, 5 have told them to avoid it to get a more comprehensive plan AND 30 other companies have called to get a small portion of the 'wealth' that a new mortgage brings.

Then, most homebuyers are trying to figure out how to fit comfortably into the new payments, not all, but a lot. Budgets always seem stretched.

Life sales is a good place to go, I just don't think 'mortgage insurance' is the best focus. It should be one tool in your tool belt, but not the only one.

I long ago gave up recommending any specific area of insurance. It really is what you are passionate about. Like flying? Sell aviation insurance. Like motorcycles? Sell bike insurance. Like boating? Sell boat insurance. People pick up on the fact you are passionate about something, and it helps a lot.

The challenge to insurance sales is having a solid process in place to manage prospects and clients. I personally like selling P&C because it is the simplest sale out there, has the best 'residual income' formula, and after you get established, it takes very little work because your staff does it for you. Others think P&C agents are underpaid, over worked, and basically think they are the scum on the bottom of the used car salesmans shoes. (Some are).

It's very easy to be passionate about life insurance. It's easy to sell the need with health insurance. You have to decide, nobody else.

Since this is the life insurance forum, I will say that in my mind, to sell life you have to have some sort of value add, not just a life policy. For instance, many are financial planners, who sell life as part of an overall plan. This is important when you stop and realize what sale you are after. A 10 year term policy on a 28 year old for a $250K face amount doesn't exactly have enough commission to pay that months mortgage. If you are doing these, you are in the volume game, which is okay, if you realize that is what you are after.

Dan

 

[Student]

It's a tough sale because 12 people have already offered it to them, 5 have told them to avoid it to get a more comprehensive plan AND 30 other companies have called to get a small portion of the 'wealth' that a new mortgage brings.

Then, most homebuyers are trying to figure out how to fit comfortably into the new payments, not all, but a lot. Budgets always seem stretched.

Life sales is a good place to go, I just don't think 'mortgage insurance' is the best focus. It should be one tool in your tool belt, but not the only one.

I long ago gave up recommending any specific area of insurance. It really is what you are passionate about. Like flying? Sell aviation insurance. Like motorcycles? Sell bike insurance. Like boating? Sell boat insurance. People pick up on the fact you are passionate about something, and it helps a lot.

The challenge to insurance sales is having a solid process in place to manage prospects and clients. I personally like selling P&C because it is the simplest sale out there, has the best 'residual income' formula, and after you get established, it takes very little work because your staff does it for you. Others think P&C agents are underpaid, over worked, and basically think they are the scum on the bottom of the used car salesmans shoes. (Some are).

It's very easy to be passionate about life insurance. It's easy to sell the need with health insurance. You have to decide, nobody else.

Since this is the life insurance forum, I will say that in my mind, to sell life you have to have some sort of value add, not just a life policy. For instance, many are financial planners, who sell life as part of an overall plan. This is important when you stop and realize what sale you are after. A 10 year term policy on a 28 year old for a $250K face amount doesn't exactly have enough commission to pay that months mortgage. If you are doing these, you are in the volume game, which is okay, if you realize that is what you are after.

Dan

I was just watching FOX news and turned back to this, I heard from a few friends today and they were asking me life insurance questions.
I have the book knowledge but no actual life sales.

I still have a P & C license and have kept it current. As to your observation about the perception of other people and our profession I think there maybe a trend toward people re-thinking that.

We just had an incident here in Detroit, that woke up the sleepers and already they are asking me questions, I told them I am not an expert but can look into some better companies and get them attached to another relative that is actually a good life agent

Thank you for your straight forwardness!

 

[ergammill]

I get my leads from a direct mail leads and call-ins. The call-ins come from TV ads and I get 4 or 5 a month, 90% of these leads turn into nothing. My other leads come from direct mail. Two types of letters, one a GIN letter, the other a "mortgage protection plan" letter.

I get about 25 leads from the mortgage protection letter to every one GIN response I get. The MP Plan letter strikes a need/emotion they can see and causes them to act.

Selling life insurance is about emotion, no one "wants" to buy life insurance, it's only when they see the emotional need that they buy.

Doesn't matter which letter they respond to, I sell life insurance, period. When you explain to people how the "old type" of plan, paid off the mortgage, and left nothing for your family, they dont want it, you also tell them to be careful of any quotes they get that seem to low, that it's likely someone trying to sell them the decreasing policy, or the letter they get from the mortgage company or credit union for $12 a month is most likely an accidental death policy.

The quote I give them for level insurance, is normally only a couple dollars more then they got for decreasing MPI

Although there is nothing wrong with a decreasing policy, if that's what the client can afford, I have yet to find a single person that had a MPI agent explain the "MPI" quote was for a decreasing amount.

Mortgage Protection is just a way to get in the door, it's your responsiblity to make sure the family has the protection they need, you don't want a widow asking "is this all" why did'nt you tell us.

As the old story goes, I've never heard a widow say "I wish he would have had LESS Life Insurance"

 

[Student]

I get my leads from a direct mail leads and call-ins. The call-ins come from TV ads and I get 4 or 5 a month, 90% of these leads turn into nothing. My other leads come from direct mail. Two types of letters, one a GIN letter, the other a "mortgage protection plan" letter.

I get about 25 leads from the mortgage protection letter to every one GIN response I get. The MP Plan letter strikes a need/emotion they can see and causes them to act.

Selling life insurance is about emotion, no one "wants" to buy life insurance, it's only when they see the emotional need that they buy.

Doesn't matter which letter they respond to, I sell life insurance, period. When you explain to people how the "old type" of plan, paid off the mortgage, and left nothing for your family, they dont want it, you also tell them to be careful of any quotes they get that seem to low, that it's likely someone trying to sell them the decreasing policy, or the letter they get from the mortgage company or credit union for $12 a month is most likely an accidental death policy.

The quote I give them for level insurance, is normally only a couple dollars more then they got for decreasing MPI

Although there is nothing wrong with a decreasing policy, if that's what the client can afford, I have yet to find a single person that had a MPI agent explain the "MPI" quote was for a decreasing amount.

Mortgage Protection is just a way to get in the door, it's your responsiblity to make sure the family has the protection they need, you don't want a widow asking "is this all" why did'nt you tell us.

As the old story goes, I've never heard a widow say "I wish he would have had LESS Life Insurance"

I have also heard stories about widows not having the discipline to use and budget wisely and they end up losing houses if they have a term or whole life policy payout. Is there any advantage to selling PMI over traditional life policies? Are all the companies that are selling PMI selling decreasing mortgage protection?

 

[ergammill]

I have also heard stories about widows not having the discipline to use and budget wisely and they end up losing houses if they have a term or whole life policy payout. Is there any advantage to selling PMI over traditional life policies? Are all the companies that are selling PMI selling decreasing mortgage protection?

MPI is just a marketing plan, it's life insurance, term or UL. Most companies have both level and decreasing, the only decreasing policy I recommend, if they can't afford level, stays level for the first 10 years and then decreases 2% per year, always leaving more than the mortgage. Regardless of the initial face amount it never drops below 25K.

As often as mortgages are sold from one company to another, the spouse should be the beneficiary, never the mortgage company. It's hard enough to get them to change their beneficiary after a death or divorce, much less if their mortgage is sold 3-4 times in the first 5 years of their loan. You would be surprised how many times one spouse gives you the name of a mortgage company, that has since changed 2 or 3 years ago.

As to budget wisely, If they ask, and older people do, about "the old plans like their parents had" I explain that often in those plans there are only two winners, the insurance company and the mortgage company, if you have a 30 years mortgage and die 29 years 11 months into it, the insurance company is happy because they got your money all those years and only had top make your last payment. The mortgage company is happy because they got their money. Meanwhile your widow has to sell the house to pay the real estate taxes, pay your medical bills, and pay for your funeral and ends up without the house you where trying to save, when explaining this to those over 50 they almost always know someone older that this very thing happened too.

It then becomes an easy sell to permament level insurance, or a combo of permanent and term. ROP is also great for those under 50.

You will be surprised at how many people of all ages do not have any life insurance outside their employer, many of my clients are in their early 60's and never bought life when it was cheaper and they were in good health.

 

[jdeasy]

I have also heard stories about widows not having the discipline to use and budget wisely and they end up losing houses if they have a term or whole life policy payout. Is there any advantage to selling PMI over traditional life policies? Are all the companies that are selling PMI selling decreasing mortgage protection?

PMI is just a marketing plan, it's life insurance, term or UL. Most companies have both level and decreasing, the only decreasing policy I recommend, if they can't afford level, stays level for the first 10 years and then decreases 2% per year, always leaving more than the mortgage. Regardless of the initial face amount it never drops below 25K.

As often as mortgages are sold from one company to another, the spouse should be the beneficiary, never the mortgage company. It's hard enough to get them to change their beneficiary after a death or divorce, much less if their mortgage is sold 3-4 times in the first 5 years of their loan. You would be surprised how many times one spouse gives you the name of a mortgage company, that has since changed 2 or 3 years ago.

As to budget wisely, If they ask, and older people do, about "the old plans like their parents had" I explain that often in those plans there are only two winners, the insurance company and the mortgage company, if you have a 30 years mortgage and die 29 years 11 months into it, the insurance company is happy because they got your money all those years and only had top make your last payment. The mortgage company is happy because they got their money. Meanwhile your widow has to sell the house to pay the real estate taxes, pay your medical bills, and pay for your funeral and ends up without the house you where trying to save, when explaining this to those over 50 they almost always know someone older that this very thing happened too.

It then becomes an easy sell to permament level insurance, or a combo of permanent and term. ROP is also great for those under 50.

You will be surprised at how many people of all ages do not have any life insurance outside their employer, many of my clients are in their early 60's and never bought life when it was cheaper and they were in good health.

PMI is not life insurance.

 

[ergammill]

jdeasy, yes pmi is not MPI, however if you read the 1st post he is talking about MPI, not PMI, he may just be dyslexia, like me,

pmi is pretty much a scam, it protects the loan, not the homeowner, if you default, the mortgage company gets their money nand you loss your home. Never buy a home with less than 20% down