When selecting a mortgage protection policy for yourself, it is all about the overall value! Mortgage protection policies stand apart by the living benefits added to the policy for no additional charge (for more details on living benefits, click here). Therefore, it is important to review the living benefits and other add-ons the policy has access to. This article will go over what I have seen are the most popular mortgage protection policies and why they are popular.
Americo Cash Back Option 100
Americo’s mortgage protection product, the CBO 100 is hands down one of the best products on the market that has the best value overall. Their living benefits they come with are critical, chronic and terminal illness, as usual. All of their living riders’ payout up to 100%. The best part, if the policy isn’t used in any way, the payments are returned 100% tax free. Most of my clients do a 25- or 20-year CBO on their 30-year mortgage and use the returns from the policy to pay off their mortgage 5 or 10 years early. Imagine having your mortgage protection policy being used as a dual purpose to also pay off your house. The one downside is this is the most expensive plan out of this entire group. However, if this is the only one that will pay you back all of the money, does it really matter? For most of my clients, that answer is no. Clients know there is a possibility of paying for life insurance and outliving the policy, therefore losing their money put into it. With this they ensure that doesn’t happen. Other companies also have cash back, or return of premium (ROP) policies, however, these other companies remove the critical and chronic riders from the policy which makes them less effective. When comparing Americo’s CBO to other companies ROP policies, the monthly premiums are all within the same ballpark figures.
American Amicable Home Protector
American Amicable gets second place because of their pricing and underwriting. This is the only mortgage protection that will approve at a level benefit, without a medical exam, if someone has had cancer and it has been over 7 years since the last treatment. Great policy to utilize for specific medical conditions. Their living benefit riders are different than most. They have the chronic and terminal illness rider attached but instead of the critical illness they have a confined care rider. You can add a critical illness rider for an additional charge; however, it makes the policy one of the most expensive mortgage protection policies on the market. It is for this reason their policy isn’t top on the list. If they had a critical illness policy added automatically, like most other companies, its price and underwriting guidelines would make it the top choice.
Foresters Strong Foundation
Foresters Strong Foundation is a strong competitor to American Amicable’s Home Protector. They have their critical, chronic and terminal illness riders that all pay out at 95% of the policy. It can be converted to a whole life within a conversion period. The price is one of the cheaper ones on the market. Additionally, this is the only mortgage protection term policy that approves diabetes type I and II. With all of the overall benefits from this policy, and if you’re someone that suffers from diabetes and uses insulin to control it, this is the policy of choice for you. The only reason I put it under American Amicable because there is no potential option to add in a return of premium or cash back option rider.
Transamerica Trendsetter LB
Transamerica stands itself apart by offering mortgage protection term policies that can go up to $2,000,000, (Americo’s and Forester’s max amount is $400,000 and American Amicable’s max is $300,000). Their living benefits are the standard critical, chronic, and terminal, however their payout on living benefit riders is confusing even to those in the industry. At best they may pay out up to 70% of the policy. This policy’s underwriting is also a challenge, since it will be a full underwritten with paramedic exam based on prescription history, age and amount requested. On the bright side, if you’re very healthy you can get a preferred elite pricing plan to significantly reduce your monthly payments from the standard. I would only use this specific policy if you were very healthy, by which I mean you have no prescription medications, and you need over $500,000 in coverage.
John Hancock Vitality
John Hancock Vitality is the only product on this list that doesn’t have a critical and chronic illness rider attached to it. Although, it does have the terminal illness rider, and some really unique extra benefits. It comes with the following:
- Up to 15% in premium cash back
- Earn Apple Watch® for as little as $25 plus tax by exercising regularly
- Up to $600 in annual savings on fresh produce
- Shopping and entertainment rewards
- Exclusive discounts on Hotels.com
- Coming to John Hancock Vitality: Amazon Halo
In addition, they do have an optional return of premium rider that also returns 75% of the premiums at the end of the term, in addition to all of the benefits mentioned above. Benefit amounts are instant decision, up to $500,000 and have 10, 15, 20, 25, and 30 year terms. With the low price point for the coverage, and so many ways to earn money back from the policy, John Hancock delivers a coverage plan that nets out to be free, or nearly free if taken full advantage of. When considering everything, it’s a great alternative for those that don’t mind losing the critical and chronic illness riders.
Which Policy Is Best For Me
When deciding what is the best possible mortgage protection policy for yourself, consider speaking with an advisor or broker that can guide you. Never pick a product simply on price, it may not have the lasting value you are truly searching for in your policy. Speak with an advisor, do a financial inventory and assess all options that are available to you based off your health and preferences. If you would like to speak to one of our advisors or receive a mortgage protection term life insurance quote, click here. Fill out the information and request to apply to any of the programs. An advisor will reach out to you and help you determine which policy is best for your situation. Until next time!