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Requesting individual/collective wisdoms of FW.

I wonder if that's a scam or something legit. A quick search on FW has not revealed anything useful.

Bought my first house (in NJ in Dec'12) with a loan from PNC and received a letter in Jan offering life & disability insurance w/o physical exam. "This privilege terminates in 18 mths after close of escrow".

- Pays off full loan in case of death
- Monthly payments in case of illness/injury
- 100% refund of premiums if benefits not used by the end of term

Sounded kinda too good but I gave my info and received a call from Atlantic City (of all places) offering an appointment with their agent.

Agent seems to have another day job and can only do evenings/Saturdays. Wants both me and wife for a 30 mins meeting. Such requests often indicate a potential scam but I can't be sure. (Recent free evaluations from windows replacement companies also required both spouses and had a good dose of other crap, like salesmen going through chemotherapy, calls to the "factory" to secure some rebates, etc.)

And yet another letter (looking very differently but asking for the same info and offering the same benefits) came. From some Mortgage Protection Center.

Is this such a huge market? Seems like an odd business model. Is this a known scam with a catch I don't see?

Before going into another heart-breaking interview with an (overworked, potentially half-dead) agent I wanted to check with the informed FW folk here.

TIA

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You dont know what the premiums are, exclusions if any, nor does it say guaranteed acceptance.

That said, if you really want life and/or disability insurance, shop independently with a good agent.

In general, "return of premium" if you use it type of policies are much more expensive and rarely worth it.

Throw those letters in the trash. If you need life insurance, do your own research. Stop responding to cold calls.

dcwilbur said:   Throw those letters in the trash. If you need life insurance, do your own research. Stop responding to cold calls.

truth. usually those letters offer $1000 of coverage for free, and any over that requires a physical or other information

b100cks said:   Requesting individual/collective wisdoms of FW.

I wonder if that's a scam or something legit. A quick search on FW has not revealed anything useful.

Bought my first house (in NJ in Dec'12) with a loan from PNC and received a letter in Jan offering life & disability insurance w/o physical exam. "This privilege terminates in 18 mths after close of escrow".

- Pays off full loan in case of death
- Monthly payments in case of illness/injury
- 100% refund of premiums if benefits not used by the end of term

Sounded kinda too good but I gave my info and received a call from Atlantic City (of all places) offering an appointment with their agent.

Agent seems to have another day job and can only do evenings/Saturdays. Wants both me and wife for a 30 mins meeting. Such requests often indicate a potential scam but I can't be sure. (Recent free evaluations from windows replacement companies also required both spouses and had a good dose of other crap, like salesmen going through chemotherapy, calls to the "factory" to secure some rebates, etc.)

And yet another letter (looking very differently but asking for the same info and offering the same benefits) came. From some Mortgage Protection Center.

Is this such a huge market? Seems like an odd business model. Is this a known scam with a catch I don't see?

Before going into another heart-breaking interview with an (overworked, potentially half-dead) agent I wanted to check with the informed FW folk here.

TIA


It isn't a scam. You will get exactly what you pay for...overpriced life insurance and overpriced terrible disability insurance. "w/o physical exam" simply means that they are assuming that you are unhealthy and will price it that way. Also, if it pays off your loan, that means that it is a decreasing benefit. You don't want insurance to go to pay off a loan. You want the benefit to go to your spouse so that she can do whatever is best with the money.

If you need life insurance, buy it! If you need disability insurance, buy it! Shop and find the best value.

I think OP believes he has found a "free" 18-month insurance option with significant benefits (if he suddenly and unexpectedly dies in the coverage period -- and if not, he gets a full refund) and he's just curious if he is missing something.

Obviously this should not be his only insurance. And yes, insurance that pays out your mortgage when you die are less great than others which pay a flat $x to your spouse to use as they wish. But given what he is paying ($0 at the end if he lives; $?? if he dies, I'm assuming that amount is not more than $1-2k tops) for what he's getting, does this make sense? I think the answer is: maybe. Obviously the company is planning for a large percentage of people to stop paying premiums before the coverage term has expired -- that is how they profit off this. Also I'm sure the cost of this insurance will be terrible.

Hoping we get more posts, or if OP will come back after doing some more reading on his own. At the least, this is an interesting topic and I'd be curious to hear actual numbers to compare how terrible this is vs other options.

wfay said:   I think OP believes he has found a "free" 18-month insurance option with significant benefits (if he suddenly and unexpectedly dies in the coverage period -- and if not, he gets a full refund) and he's just curious if he is missing something.

Obviously this should not be his only insurance. And yes, insurance that pays out your mortgage when you die are less great than others which pay a flat $x to your spouse to use as they wish. But given what he is paying ($0 at the end if he lives; $?? if he dies, I'm assuming that amount is not more than $1-2k tops) for what he's getting, does this make sense? I think the answer is: maybe. Obviously the company is planning for a large percentage of people to stop paying premiums before the coverage term has expired -- that is how they profit off this. Also I'm sure the cost of this insurance will be terrible.

Hoping we get more posts, or if OP will come back after doing some more reading on his own. At the least, this is an interesting topic and I'd be curious to hear actual numbers to compare how terrible this is vs other options.


You are a little bit confused. The policy is not for 18 months. The 18 months is how long he has to buy the policy with no physical exam. Depending upon the language of the policy, to get the refund, he will either have to keep the policy until his loan is completely paid or possibly for 30 years even if the loan is paid sooner. These policies are overpriced decreasing term insurance. The price is probably more expensive than a level term policy, but with the disadvantage that the benefit decreases every year.

BrodyInsurance said:   wfay said:   I think OP believes he has found a "free" 18-month insurance option with significant benefits (if he suddenly and unexpectedly dies in the coverage period -- and if not, he gets a full refund) and he's just curious if he is missing something.

Obviously this should not be his only insurance. And yes, insurance that pays out your mortgage when you die are less great than others which pay a flat $x to your spouse to use as they wish. But given what he is paying ($0 at the end if he lives; $?? if he dies, I'm assuming that amount is not more than $1-2k tops) for what he's getting, does this make sense? I think the answer is: maybe. Obviously the company is planning for a large percentage of people to stop paying premiums before the coverage term has expired -- that is how they profit off this. Also I'm sure the cost of this insurance will be terrible.

Hoping we get more posts, or if OP will come back after doing some more reading on his own. At the least, this is an interesting topic and I'd be curious to hear actual numbers to compare how terrible this is vs other options.


You are a little bit confused. The policy is not for 18 months. The 18 months is how long he has to buy the policy with no physical exam. Depending upon the language of the policy, to get the refund, he will either have to keep the policy until his loan is completely paid or possibly for 30 years even if the loan is paid sooner. These policies are overpriced decreasing term insurance. The price is probably more expensive than a level term policy, but with the disadvantage that the benefit decreases every year.

You're at least partially right. I realized this and adjusted most comments about it being an 18-month policy to say "coverage period" instead. Except the very first mention.

A 30-yr policy like this would be a terrible idea. But a drastically shorter period, like 1, 2, or 3 yrs might work. But most likely the shortest policy term available would be 10-15yrs.

And most people would sell their homes before the 10yrs was up, so I'm sure you wouldn't qualify for a refund, and instead of getting a "free" policy for the period you owned the home by getting a full refund of premiums, you'd just lose all your money and you would have bought a generally crappy product for a bad price.

TL;DR - I agree with what you and others said, unless you can get an extremely short policy period, then it MIGHT be worth considering.

Keep in mind you will never want to use this policy for disability/illness. Lets just say you are in the hospital for 1-2 months, you could use your insurance and not have to make the mortgage payments those two months. However, you will then no longer be eligible for the end of term refund which is probably more money than 2 mortgage payments.

Get a life insurance policy large enough to pay off the home+whatever else you feel you need. I would throw extra money in savings instead of getting this policy for the disability/illness benefit.



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