Timely template letter: Secure new business with a financial planning staple

(May 2003) According to a recent IFIC press release, net mutual fund redemptions in April were somewhere between $1.4 billion and $1.8 billion. With unpredictable markets and worried clients, perhaps it’s time for you to diversify your business and become reacquainted with one of the staples of financial planning business — mortgage insurance. Here’s a letter you can send your clients and prospects to introduce the possibility of getting them better coverage at a lower rate:

Dear [Client/Prospect name],

Are you paying too much for your mortgage insurance?

You may have taken out the insurance that your bank or credit union offered you when you applied for a mortgage. If you did, that was good thinking. What you owe on your home is probably the single biggest debt you’ll ever incur, so it makes sense to have it fully insured.

But, like many other people, you may not have known that you can obtain better coverage at a lower rate by buying your own individual insurance policy!

• Generally speaking, the insurance offered by the bank is a “one size fits all” product. Individual insurance, on the other hand, is based on your own medical condition. If you’re in good heath, why would you want to pay the same rate as someone who smokes a pack a day?

• Should you change banks when your mortgage renews, you may lose your bank insurance coverage and have to reapply at your new lender. With an individual policy, you’re free to shop the market for the best rate at renewal — you can take your insurance coverage with you without ever having to submit new medical information.

• The financial institution is named as beneficiary on insurance from the bank. You pay the premiums, but they’ll get the money should something happen to you. An individual policy, however, allows you to name your own beneficiary — meaning your loved ones can decide when (or if) they want to pay off the mortgage or if they’d rather invest the proceeds instead.

If you’re interested in getting a comparison quote or learning more about how an individual mortgage insurance policy could work for you, please don’t hesitate to contact me at the number above.

Sincerely,

[Your signature]

[Your name]

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.