by Guest » Wed Jun 10, 2009 01:57 pm
Hey there, I wanted to check with you all because we have struck out with our local agent/broker.
My 66 year old Dad took out an interest-only loan on his property years ago to build a "dream home" in the country, but differences of opinions (mom), advancing age, and dwindling funds have torpedoed the project. As such he has decided to convert the loan into a mortgage on the current house and expects to have it paid off in 15 years.
Here is the problem. His term life insurance recently expired and his new premium is too much. The children are grown and there is no other debt aside from the new mortgage ($160,000). Since he has no health insurance right now, he was hoping to possibly get Mortgage Life Insurance but the bank has said they no longer offer that. Really, he just needs some insurance to cover the mortgage (for mom) in the event something happens to him.
While Dad is active and otherwise healthy, he is overweight (about 310 lbs, 5'7") and has been hesitant to pursue insurance options because he assumes he would be automatically disqualified.
Ok pro's - does he have any cost effective options here?
Thanks in advance!
My 66 year old Dad took out an interest-only loan on his property years ago to build a "dream home" in the country, but differences of opinions (mom), advancing age, and dwindling funds have torpedoed the project. As such he has decided to convert the loan into a mortgage on the current house and expects to have it paid off in 15 years.
Here is the problem. His term life insurance recently expired and his new premium is too much. The children are grown and there is no other debt aside from the new mortgage ($160,000). Since he has no health insurance right now, he was hoping to possibly get Mortgage Life Insurance but the bank has said they no longer offer that. Really, he just needs some insurance to cover the mortgage (for mom) in the event something happens to him.
While Dad is active and otherwise healthy, he is overweight (about 310 lbs, 5'7") and has been hesitant to pursue insurance options because he assumes he would be automatically disqualified.
Ok pro's - does he have any cost effective options here?
Thanks in advance!
Posted: Wed Jun 10, 2009 02:10 pm Post Subject:
What do you consider "cost effective options"? I am guessing that being 310 pounds at age 66, he is probably on some sort of blood pressure or cholesterol medication. If he is truly otherwise healthy, he would still be able to get underwritten coverage. The key is having an independent agent who can shop the case with 8-12 different carriers to find him the best risk classification (which determines the premium).
Also, mortgage life insurance is a horrible deal. You get to pay the same premium year after year for less and less death benefit, and it's usually a very overpriced premium in the first place. He is better off with fully underwritten level term or UL that will not decline in value. While he may only be concerned about the mortgage now, what happens if he ends up needing long term care? Someone has to pay for it, and what's the easiest way to replace all the money you spend down....life insurance, or going back to work at age 70 or 75 or 80?
What state is he in?
If you want to contact me to discuss his options, my e-mail address and website are in my profile (click my username and then the "about me" tab).
Posted: Wed Jun 10, 2009 03:47 pm Post Subject:
dgoldenz - thanks for the quick reply. He is astonishingly healthy for his weight. Aside from a little arthritis, he is in good condition. No high blood pressure and cholesterol is normal - I'm sure his MD would sign off on that as well. State is Tennessee.
Good point about the long term care piece. He does have health insurance (& AD&D) through Mom's work (govt employee) and Medicare/Medigap will take effect for both when her work coverage terminates when she retires. He just doesn't have anything that could cover the mortgage in the event he gets ill and dies.
Cost effective? Well - he was paying $175/month on his term policy when it termed last June. I think he could stand to pay up to double that amount, but any more leaves the realm of "cost effective" for them.
Posted: Wed Jun 10, 2009 03:51 pm Post Subject:
Based on the above information, he should be able to get coverage that falls within the premium range you are looking at for the full $160k depending on how long of a term he wants to keep the coverage - I am assuming either 15 or 20 years due to the mortgage. We placed a case last year with a major carrier for someone who was 6'0" and 360 pounds with a Table 2 risk class (standard rate + 50% premium increase). We are licensed in Tennessee and would be happy to help - please feel free to give me a call or send an e-mail and we can canvass the 8-12 carriers as mentioned to get him the best available rate. The contact information is in my profile (I don't think we're allowed to openly post it in the forum).
Posted: Wed Jun 10, 2009 03:59 pm Post Subject:
Good stuff dgoldenz - I will pass your contact info along to Dad. Thanks again.
Posted: Wed Jun 10, 2009 04:02 pm Post Subject:
No problem, hope we can help!
Posted: Wed Jun 10, 2009 05:32 pm Post Subject:
66 years old; 5 feet 7 inches, arthrits; 310 pounds: If Goldenzweig can get table 2 for him, he should be all over this offer. The odds are against it.
Posted: Wed Jun 10, 2009 06:34 pm Post Subject:
The odds are against a table 2, but it's been done before. Even at table 3-4 the rates would be in line with the budget. You never know until you actually ask the carriers. There may also be a potential to table shave to standard rates on a UL and if only wanted for 15-20 years, the guaranteed period can be "dialed down" to that amount and essentially end up with a standard rate for that term.
Posted: Thu Jun 11, 2009 03:59 am Post Subject:
Hi TNTitan,
Good point about the long term care piece. He does have health insurance (& AD&D) through Mom's work (govt employee) and Medicare/Medigap
Just for your information that Medicare wouldn't take care of all the long term care needs. He may still need to find suitable LTC policy to cover the expenses of long term care.
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