What is mortgage protection? And what is “Simple Issue”. I’m going to break it down into two quick parts.
Mortgage Protection is a term life insurance structured policy that’s built around paying off the mortgage upon death, or if you’re diagnosed with certain medical conditions.
Typically, these policies are going to be the length of the mortgage itself, but they can be anywhere from 10 years to 30 years, depending upon your age. Many of those policies can be extended past the 30 years, as well.
And there are options you need to be aware of. Be very cautious of that. Are shorter than 10 years. AARP is infamous for providing a one-year renewable term structured policy. It is very high risk if you already have one. Call us immediately. We can talk about it. But you’re not well protected in most cases with that sort of a policy. Every year they reassess whether you will be approved for continued coverage. So that’s a pretty scary thing.
So that is mortgage protection now. Simple issue. What that means is that you can get your coverage, you can get your mortgage protection policy without the need of a medical exam, without the need of extensive requirements by the insurance carrier.
So a simple issue is typically going to work like this through your agent. You apply for mortgage protection coverage. That application goes over to the insurance carrier. They review everything and make sure nothing looks awry, nothing looks incorrect, and nothing is an automatic decline or health rating.
And then they glance at your might be that is the database where all your medical information is just kept every time you go to a doctor, the information from that doctor’s appointment, your prescription medicines, health diagnoses, things like that, that all goes into that database. So they look at your report and they assess it. Usually, that’s a simple issue procedure, sometimes they’ll require an ape’s attending physician statement. You don’t have to do anything about that.
They contact your clinic or your doctor. And by the way, this is a normal thing. So those clinics and doctors are used to receiving those calls from insurance carriers. No big deal, just normal. And so sometimes they have that process in there as well. But that is a simple issue. Now, what is the other, what is not a simple issue? It’s not a complicated issue. It’s called fully underwritten. Is the other option fully underwritten?
Mortgage protection means that there’s going to most likely be a medical exam in the way that works, as you usually don’t even have to go to your doctor or go to a clinic. It’s a third-party person. They’ll call you up. A company will call you up and schedule a time and day when someone can come to your home when it’s convenient for you.
And then they arrive and they do. They get a blood draw, they get a urine sample, they check your height and weight and they ask you some health questions and they send everything over. You don’t have to do anything past that point. They send everything to a laboratory. The laboratory looks at everything. They send all the results to the insurance carrier. And then it’s all the same as everything I mentioned was a simple issue beyond that. So there are big advantages to some simple issue mortgage protection policies.
Some of the examples are some of the big advantages of the simple issue. Mortgage protection is that. It is more likely to prove if you get declined and I’m seeing this happen all the time, especially right now with covid, if you get declined on your insurance, that goes on your MIB. So you don’t want to take a high risk, a big gamble when you apply for insurance. And your agent should know this. Any agent that cares about your well-being and wants you to get the best result possible, needs to be assessing short and long-term risk versus reward for you.
And they should be looking out for you with that. There’s a balance between going what’s easiest and going what has a little bit of risk but gets you a significantly better price. And there’s a balance thereof what is the best. And that is how all of our agents are trained as far as assessing that middle road and proposing to you what is the best way to go and why. So if you have any other mortgage protection questions, please reach out to us.
We’re happy to help you any time. And beyond that, stay safe out there.