MPP Insurance Creditor s Group Insurance Product Knowledge Training

Transcription

1 MPP Insurance Creditor s Group Insurance Product Knowledge Training Presented by Credit Security Insurance Agency Inc. ( CSIA )

2 Agenda MPP Coverage MPP Benefits Life: Benefits, Notes, Exclusions Disability: Benefits, Notes, Exclusions Free Look & Cancellation Other MPP Features Eligibility & Ineligibility How to Present MPP Insurance to a Borrower How to Complete an MPP Application Documents for Clients How to Report a Claim When Insurance Ends Important Information Privacy Consent Complaint Resolution Contact for More Information

3 MPP Coverage What is Mortgage Protection Plan Insurance? MPP coverage can include two vital insurance products for mortgage protection: Life Insurance Total Disability Insurance Both types of coverage are stand-alone and completely optional.

4 MPP Benefits - Life If a Borrower chooses life insurance, the coverage can: Pay off mortgage balance in full Pay pre-payment penalties and discharge expenses up to 5% of outstanding balance Pay Bridge Benefits If spouses apply for MPP insurance on the same application form, there is a discount for the younger one.

5 MPP Benefits - Life Important Notes: Maximum life coverage - $1 million If the mortgage is a HELOC, or changed significantly since insurance was issued, life benefit may be less than the balance owing E.g. if mortgage was re-financed for a higher amount and client did not apply for top-up MPP life insurance Then the benefit will cover the debt up to the amount that would have been owing on a traditional mortgage that started the day the insurance started, if the debt had equaled the insurance on that day see certificate for details Life benefits are paid directly to the lender

6 MPP Benefits Life Exclusions No life benefit will be paid if death caused by: Drug misuse or sustained alcohol abuse Suicide within the first two years that coverage is in force An actual or attempted criminal offence Driving with blood alcohol over the legal limit War, unless in Canadian Armed Forces or Reserve Any exclusion listed on borrower s Notice Page Please see certificate for full details.

7 MPP Benefits Life Bridge Benefits is a fantastic benefit for the client! Available on a life claim Can cover monthly mortgage payments between receipt of claim documents and the payment of a life claim Bridge Benefits are not conditional on life claim being paid; no repayment is required if the life claim is not paid, except in cases of fraud

8 MPP Benefits Life Bridge Benefits The Bridge Benefit payment may be lower than the mortgage payment if the mortgage has changed significantly since insurance was issued And is paid to the lender toward the mortgage

9 MPP Benefits - Disability If a Borrower chooses disability insurance, the coverage can: Waive the premiums (Life, if applicable, and Disability) during the benefit period Note: A borrower cannot change their premium frequency while they are disabled Pay to the lender the borrower s share of the monthly mortgage payment ( Share of Benefit )

10 MPP Benefits - Disability If a Borrower chooses disability insurance, the coverage can: Pay Borrower s share of the optional Property Tax Protection Benefit Pay a Bonus Payment after Total Disability ends, if the benefit period is less than 24 months E.g. if they return to work prior to the 24 th benefit being paid, then one extra disability payment is provided to the client

11 MPP Benefits - Disability Important Notes: The Qualification Period is 60 Days The insured must be totally disabled at least 60 days before benefit is payable The Maximum benefit period is 24 months The Bonus Payment is also subject to Maximum benefit period The Maximum benefit is $10,000 per month The Borrower s Share of Benefit depends on number of borrowers E.g. if there are 2 borrowers, each borrower s share is ½

12 MPP Benefits - Disability Important Notes: If one of two borrowers waive disability, the premium for the other s disability coverage will be double the amount quoted on application. Disability coverage will double from 50% to 100% of the monthly mortgage payment. Disability Benefit is only payable after Qualification Period, during Total Disability, until end of Maximum benefit period

13 MPP Benefits - Disability Important Notes: Total Disability means: The insured cannot perform essential duties of their own job due to injury or illness; or Cannot do at least 2 of the following Activities of Daily Living ( ADL ) without help: eat, get out of bed, dress, toilet, walk; ADL rule applies if Borrower was not actively at work at least 20 hours per week for 40 weeks during year before disability began.

14 MPP Benefits Disability Exclusions No disability benefit will be paid if disability caused by: Any exclusion listed for life insurance Self-inflicted injury Pregnancy, miscarriage, abortion, childbirth Cosmetic / elective surgery Pre-existing condition in first year I.e. if Borrower consulted a doctor or received treatment for the condition in 12 months before coverage began AND disability starts in 12 months after coverage begins Any other exclusion listed in borrower s Notice Page Please see certificate on the Resources section for details.

15 Other MPP Features Free Look & Cancellation MPP insurance has a 60-day Free Look Period This is a money back guarantee Full refund is provided if cancelled within 60 days Cancellation Insurance can be cancelled at any time. There is no automatic refund if coverage cancelled after 60 days. To cancel coverage (during or after Free Look) Call CSIA Client Services at Or complete the cancellation Form and fax it to

16 Sample Cancellation Request Form

17 Other MPP Features Portable Coverage MPP insurance coverage can continue even if the borrower moves the mortgage to a new arms-length lender. Once insured, a borrower may move, refinance or increase their mortgage amount, and their original MPP coverage remains in force. The Borrower may also apply for new MPP insurance to cover any increase in debt. Coverage ends if the borrower has no mortgage Immediate Temporary Protection Temporary coverage can begin when insurer receives a signed application form, including valid payment information

18 Other MPP Features Underwritten Upfront with 3 levels of underwriting First, for applications with medical questions, if a mortgage is under $300K and a client under the age of 50 has truthfully answered NO to all medical questions, then no further underwriting is required. The $300K threshold is reduced to $150K if the client is 50 or older. The next level is a telephone interview. This interview will occur if: the mortgage amount exceeds the thresholds mentioned previously or if the client answers yes to any medical question or if the client does not answer one or more of the medical questions on the application or the application doesn t include medical questions. The final level consists of a nurse meeting with the client to collect further medical information which consists of the collection of blood, urine, and vitals. The nurse will be required if the mortgage amount is over $500K, or over $300K if the client is over 50 years of age. Vitals consist of taking the height and weight, blood pressure, and heart rate.

19 Other MPP Features Universal Coverage If an eligible Borrower does not qualify for full coverage, insurer automatically provides accidental death and / or accidental disability coverage: 50% of standard life premium will be charged for accidental death coverage 60% of standard disability premium will be charged for accidental disability coverage This feature provides every client who applies for coverage with some form of coverage. Remember that, depending on the client s health history, the certificate might have special exclusions based on the client s particular situation

20 Other MPP Features There is no waiting period for life claims Underwritten by The Manufacturers Life Insurance Company ( Manulife )

21 MPP Eligibility Eligible applicants are: Canadian Residents I.e. File income taxes as Canadian Borrower, Co-borrower, or Guarantor on mortgage arranged through a mortgage broker Must be between18 and 64 years old to apply

22 MPP Eligibility Coverage Limits A Borrower cannot apply for MPP insurance through a mortgage broker: For Life coverage, if the mortgage exceeds $1 million For Disability coverage, if the Monthly Mortgage Payment exceeds $10,000

23 MPP Ineligibility Exceed one coverage limit: If a Borrower exceeds the coverage limit for one of the two types of coverage but not the other, they may apply for the eligible coverage through a mortgage broker. Partial Coverage: If the Borrower exceeds a coverage limit, they may be eligible to purchase partial coverage by calling a CSIA agent. Clarifying Eligibility: If the client is unsure of whether they may apply for coverage, they may phone a CSIA agent.

24 How to Present MPP Insurance to a Borrower Remember: You can offer MPP insurance to a Borrower if the Application System prints an MPP application form and brochure with the Borrower s name on it The slides from here to the end of this section explain how to present MPP insurance to a borrower

25 How to Present MPP Insurance to a Borrower Timing: When you present the mortgage commitment Brochure: Give the Borrower a Brochure Point out benefits and exclusions on the Brochure See Plan Highlights section

26 How to Present MPP Insurance Explain: MPP insurance is optional Who is eligible Borrowers can call CSIA s agents with any questions about eligibility Coverage available is Life or Disability, both or neither (i.e. waive) Basic terms and conditions are on the brochure, including how to make a claim Questions? Borrowers can call CSIA s agents Note: Some provinces require disclosure of compensation

27 Sample MPP Brochure 60 day money back guarantee Exclusions

28 MPP Application Form 1. Do not write anything in the barcode section. 2. When the application is complete and signed, fax to Ensure the borrower s contact information is accurate, in case the insurer has questions. Explain that rates for smokers are 70% more than standard rates shown. Highlight that younger spouse s standard rate includes a discount. Each Borrower must choose either waive or apply.

29 MPP Application and Term Referral Form 4. If you re participating in the Term Life Referral Program, your application form will also contain a section for your client to indicate that they would like to be contacted by a licensed advisor. NOTE: this is still an MPP Application form, and you can still discuss MPP insurance if the Application System prints this form. Note that the logo mentions Mortgage Protection Plan. 5. If your client is interested in this insurance advisory service, be sure to have them complete this section in full.

30 MPP Application Form 6. Borrowers must complete premium payment information. There is no coverage until the insurer receives valid payment information. 7. The Medical Questions must be answered by the client. If the client asks for assistance do not help, just refer them to CSIAs licensed representative OR leave this section blank and advise the client they will be contacted by a representative to complete this section. Note that some versions of the MPP Application forms do not contain health questions. If you are using one of these application forms, an agent will contact your client for more information. It is very important we have accurate client contact information.

31 MPP Application Form 8. Ensure the clients check all special instructions that apply: 1. If a client has existing MPP insurance on the debt and wants to apply for additional coverage or 2. to delay coverage until funding or 3. to remove property tax amount from disability coverage. 9. Always confirm that each client has signed and dated the bottom of the form before submitting it.

32 Documents for Clients When Borrower applies for coverage, the insurer will send the Borrower a Welcome Package, which includes: A Notice Page which includes how the client answered the medical questions A Coverage Summary Page which includes: Certificate # (or policy # if client purchased MPP insurance through a referral to a life agent) Insureds name and their date of birth Coverages applied for and coverages start date Monthly premium, applicable taxes and mortgage information The Certificate s Terms & Conditions A Brochure If further underwriting is required, the Welcome package will also include: Confirmation of receipt of application Explanation of Temporary Insurance Coverage

33 Documents for Clients When underwriting is complete, the insurer will send the borrowers a Confirmation of Coverage Package: Updated Notice Page May include additional exclusions, if any Updated Coverage Summary Page If Borrower is only approved for accidental coverage, this package will explain the coverage limitations TIP: Ensure your clients are aware that they will receive accidental coverage if the insurer is unable to complete the telephone interview.

34 Sample MPP Certificate s Terms & Conditions

35 Sample Coverage Summary Page

36 How to Report a Claim To report a claim, the claimant can contact us by phone, fax, or mail The quickest way to start the claim is by phone The claimant should be ready to provide basic information such as: Borrower s Name, Address, client number if available Borrower s Attending Physician s contact info Borrower s Employment details for Disability claim Mortgage Lender Details Claim forms will be mailed for completion

37 Termination Insurance for a Borrower will end on the earliest of: The day: They have no mortgage They ask the insurer to cancel coverage Premiums are 31 days overdue A life benefit becomes payable The end of the initial amortization period For life insurance, the borrower s 70 th birthday For disability insurance, the borrower s 65 th birthday

38 Important Information Clients can contact the Insurer through the Licensed Client Contact Centre if: There are any questions about their eligibility to apply for coverage They have questions about their insurance coverage or underwriting decision. The client should always contact the Insurer when: They have paid out their mortgage. They have questions about the claim process They make significant changes to their mortgage terms e.g. refinancing with a new lender Or increase their mortgage amount, increase amortization, make a lump sum payment Note: Changes like these can affect the borrowers existing insurance coverage potentially resulting in a situation where their coverage is terminated or they are over or under insured.

39 Privacy Consent As a mortgage broker you collect the borrower s personal and financial information to arrange mortgages on their behalf. In doing this, you obtain the borrower s consent. It is necessary to ensure that the borrowers are aware that you also use their personal information to be able to offer associated financial services like the opportunity to apply for MPP insurance, or to speak to a licensed agent about insurance, with respect to their mortgage. The borrower s consent to use their information for this purpose should be obtained, noted and a record kept on file before you enter their information into a mortgage origination system or MPPQuick. TIP: Keep a record of obtaining this permission on file with your current Broker Privacy Consent so you can provide it to us if a question arises.

40 Complaint Resolution Manulife provides its customers with accessible means with which to communicate their complaint, and will employ best efforts to respond and resolve where possible. Clients can contact MPP Customer Service at If the concern isn t resolved to the clients satisfaction, they can ask to speak with the manager. If they are not satisfied with the manager s response, they can escalate it to Client Relations for an additional review. Toll Free: or Client_Relations_Team@manulife.com For a copy of Manulife s Customer Satisfaction and Complaint Resolution pamphlet visit

41 Contact for More Information Consumer Customer Service Phone number Choose General Inquiries for questions or to report a claim Choose To apply for a CSIA agent Or Help@mortgageprotectionplan.ca Mortgage Broker Sales Support Phone number Support@mppbroker.com

42 Congratulations & Thank You You have completed your MPP Insurance training!