From Jamie Chirio – a new technique he picked up from Grady Polcyn this week:
I was meeting with a 29 year old male looking to protect his mortgage for his wife and 2 kids. He was earning $4,000/month and she was earning $1,000 per month.
We went thru the financial inventory and then I wrote these 3 options on a piece of paper.
I explained that I was going to go through 3 different types of plans and which ever one sounded the best, then that would be the one we would cover and quote. $ would be least expensive, $$ middle price, and $$$ most expensive
$ = Accidental
“Caleb, you and your wife are 29. The most likely cause of death in the near future is not going to be a terminal illness, it’s going to be an accident. Fall down the stairs, slip in the bath tub, get in a car accident, fall off the ladder putting up Christmas lights, etc. So we want to make sure that at minimum there is something place to take care of you.”
$$ = Traditional Term
“This option is traditional mortgage protection. Should something happen to you or your wife over the next 30 years, either your full mortgage or a portion of your mortgage would be paid off. If nothing happens, coverage expires, but you were insured the whole time.”
$$$ = Term + CBO
“This option is the most popular option, but it’s also the most expensive option. This is traditional mortgage protection with a cash back option. In the event that you and your wife out live the term, you will get all of the money back that you paid into it. So for example if you paid $1,000 per year into the policy and it was a 30 year term, at the end when you turn 59, you will get a check back for $30,000. It’s like a forced savings plan. And really life insurance with a cash back option is one of the number 1 loopholes for tax free savings in the entire US Tax code.”
So based on those options, which one would you like to see quotes for?
Result: $250,000 protected on a 30-year term
$1,464.96 HMS CBO