Jeffrey Wade
Selling mortgage protection insurance is a powerful way to guarantee your client's family can stay in their home without worrying about mortgage payments. It's a policy that offers peace of mind and ensures children can continue their lives as normally as possible, such as staying in the same school, even after the death of either parent. When selling mortgage protection insurance, it's important to remember that you are a field underwriter, not a salesperson, and that honesty about the product is key. This insurance is a non-medical term life insurance policy, meaning no exams are necessary for the client, and it focuses on faster underwriting. The presentation is key, and it's important to confirm the mortgage amount and monthly payments, including escrow. This insurance is a great combination of helping others and earning a good paycheck.
| Characteristics | Values |
|---|---|
| Purpose | To pay off the mortgage balance for the surviving family in the event of the death or disability of the primary wage earner |
| Target Audience | People who recently bought a home |
| Selling Point | No medical exam is required, making the process faster and easier for the client |
| Presentation | Be casual and confident; be honest about the product; confirm the mortgage amount and monthly payments |
| Referrals | Ask for one name at a time |
| Product | Term life insurance, final expense insurance, level term cover, serious illness cover, etc. |
| Payment | Premiums can be as low as $10 per month; the average monthly premium ranges between $70 to $80 |
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What You'll Learn
How to pitch mortgage protection insurance to prospects
Mortgage protection insurance is a powerful product to sell as it offers peace of mind to your clients, guaranteeing their children can continue their lives as normally as possible after the death of either parent. It keeps a family in their home without them having to worry about making mortgage payments.
When pitching to a prospect, it is important to be casual in dress and confident in your ability. Remember, people don't like to be sold to, but they love to buy. You are not a salesperson, you are a field underwriter, there to help your prospect find the right program for them. Begin by confirming the information you have and asking any additional questions. For example, you could say: "I am the field underwriter assigned to your case and today we are going to find out which program we qualify for to either pay down or pay off your mortgage in the event something catastrophic happens."
The next part of your pitch should be about being honest about the product and the program. Explain that mortgage protection insurance is a type of life insurance policy. Confirm the mortgage amount and ask about the monthly mortgage amount, including escrow (property taxes and homeowner's insurance). Explain that mortgage protection insurance is there to pay off the mortgage balance for the surviving family in the event of death or disability of the primary wage earner. This will eliminate the mortgage payment from the surviving family's living expenses moving forward.
You could also mention that mortgage protection insurance is compulsory and that it is a decreasing form of life cover, meaning that the cover will decrease in line with the mortgage. This means it tends to be cheaper than life insurance. You could also mention the different types of cover available, such as reducing term cover, level term cover, and serious illness cover.
Finally, ask for a referral. The most effective approach is to ask for one name. For example: "It was great meeting with you today and as a field underwriter, I realize that not everyone was lucky enough to receive the same opportunity as you did, so I wanted to give you the chance to pass on these same programs to someone you think may benefit from this."
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The benefits of mortgage protection insurance
Mortgage protection insurance (MPI) is a type of insurance that covers your mortgage payments if you pass away, get injured or become unemployed. Here are some benefits of MPI:
Guaranteed acceptance
MPI policies are often issued on a "guaranteed acceptance" basis, meaning you can't be denied coverage based on your health condition. This is especially beneficial for those with underlying health conditions or high-risk jobs who may struggle to obtain traditional life insurance or would typically have to pay higher rates.
No medical exam required
Most MPI policies don't require a medical exam or even a health questionnaire, making it more accessible for those who don't want to undergo exams or have health issues that would preclude eligibility for standard life insurance.
Peace of mind
MPI provides peace of mind for both you and your family, knowing that your mortgage payments are covered if you pass away or become disabled. This ensures your family won't face financial stress or lose their home due to foreclosure.
Convenience
MPI policies align with your loan balance and pay the lender directly. This convenience factor means your beneficiaries won't have to manage the funds, and you can rest assured that your mortgage will be taken care of.
Customization options
MPI policies often offer riders or add-on coverages that allow you to customize your policy. For example, a waiver of premium rider can cover your premiums if you become disabled and unable to work.
While MPI offers these benefits, it's important to consider its limitations, such as higher premiums, lack of flexibility in payout usage, and declining payout values. For some, a standard term life insurance policy may offer more flexibility and control over how the payout is used.
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The different types of mortgage protection insurance
Mortgage protection insurance is compulsory and must be taken out when getting a mortgage. It offers financial protection to both the mortgage lender and the borrower. The insurance runs for the length of the mortgage and pays off the loan if the borrower dies during that term. The remaining balance is sent to the borrower's estate.
There are several types of mortgage protection insurance:
Reducing Term Cover
The most common and cheapest form of mortgage protection. The amount of cover reduces as the borrower pays off the mortgage, and the policy ends when the mortgage is paid off. The premium remains the same, even though the level of cover reduces.
Level Term Cover
The amount insured remains the same for the term of the mortgage. If the borrower dies before their mortgage is paid off, the insurance company will pay out the original amount insured. This type of cover is more expensive than reducing term cover.
Joint Cover
A joint policy will pay out on the death of the first person only, and then end.
Dual Life
Dual life protection can pay out twice, and is sometimes no more expensive than a joint policy. For example, if one partner dies during the policy term, the mortgage would be cleared. If the other partner dies before the term ends, a second payout would go to their estate.
Serious Illness Cover
This can be added to a mortgage protection policy. The mortgage will be paid off if the borrower is diagnosed with and recovers from a serious illness that is covered by the policy. It will also be paid off if the borrower dies. This type of cover is more expensive than other types.
Life Insurance Cover
An existing life insurance policy can be used as mortgage protection insurance if it provides enough cover and is not assigned to cover another loan or mortgage.
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How to stand out from competitors
Mortgage protection insurance is a powerful product to sell, as it is often a necessity for new homeowners. To stand out from competitors, you must first understand the product and its benefits. The product is about keeping a family in their home, giving them peace of mind and ensuring children can continue their lives as normally as possible. This is a unique product as it is not just insurance, it is an emotional purchase.
To stand out, you must be able to communicate this emotional benefit to your clients. You are not just selling insurance, you are selling a guarantee that their family will be looked after. You are also selling a simple process, with no medical exams, and a fast approval time. This is a product that is easy to buy into, and that is an important selling point.
You can also stand out by offering a personal service. As a field underwriter, you are not a salesperson, so presenting yourself in a casual and friendly manner is important. You are there to help your clients, and this should be clear in your approach. Be honest and educate your clients, and they will trust you. This trust will lead to more sales and referrals.
Finally, you can stand out by being proactive and responsive. Mortgage protection insurance is often sold via direct mail, so be sure to respond quickly to any leads and follow up with a phone call. This will show you are keen to help and will make your clients feel valued.
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How to close a sale
Selling mortgage protection insurance is a great way to offer peace of mind to your clients. It guarantees their children can continue their lives as normally as possible, going to the same schools, and keeping the family in their home without the worry of mortgage payments. It's a policy you can feel good about selling, and it also generates more secondary life insurance leads than other sales models.
Know your product and your customer
Understand that you are the field underwriter, not a salesperson. Dress casually and be confident in your ability. Be honest about the product and explain how it works. Confirm the mortgage amount and the monthly mortgage payment, including escrow (property taxes and homeowner's insurance). Be clear about the purpose of the insurance—to pay off the mortgage balance for the surviving family in the event of death or disability of the primary wage earner.
Identify the decision-makers
Figure out who the decision-makers are and start building a list. Use social media platforms to identify prospects and look up their email addresses. Start conversations with those decision-makers.
Consultative selling
Ask clarifying questions to understand your prospect's true needs and offer objective solutions. Consultative selling builds trust and although it may take longer, the prospects that are a good fit are more likely to close and have better results.
The assumptive close
This technique assumes the prospect wants to buy and that the deal is almost done. Ask how many products they would like or when the solution could be implemented, rather than if they are ready to buy. Be assertive without being aggressive, which may ruin your rapport with the prospect.
The gauge close
Ask the prospect how interested they are in your product. For example: "On a scale of one to 10, with one being 'let's end this conversation' and 10 being 'let's implement this solution on Monday', how likely are you to move forward with the purchase?" This technique helps you understand if you've communicated the value of your product effectively and gives you an opportunity to address any objections.
Follow up effectively
On average, it takes eight touchpoints to close a deal, so make each one count. Add value with each touchpoint and use a communication-focused CRM to track conversations and schedule follow-ups. Offer limited-time incentives like discounts or free add-ons to encourage a faster commitment without rushing your prospect.
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