One creditor insurance provider is calling your bluff, using this week’s Mortgage Summit to launch a term-life alternative to its traditional offerings – a new product focused on paid referrals and helping brokers retain “ownership of the client."
“We’ve heard it that some brokers don’t feel comfortable selling creditor insurance because they believe there is more value in term life insurance,” David Young, of Protect Secure Insure, told MortgageBrokerNews.ca. “Our term life allows brokers to help arrange that coverage for clients quickly with one of the several insurers we work with and with all the competitive features in the market.
“It’s a way of ensuring that your client is protected at the same time getting referrals on that business.”
More than 100 brokers were introduced to the new offering Thursday, during one of 25-plus sessions at the two-day Mortgage Summit, powered by CMP. The event, now in its second year, comes just ahead of Friday’s Canadian Mortgage Awards in Toronto.
Some of those expecting to attend the gala event were also a the Summit to hear Young’s pitch on the PSI product. Ultimately, the coverage is meant to answer broker concerns around selling creditor insurance, sometimes criticized as a poor, but expensive, fit for certain clients.
Many brokers have traditionally been willing to forgo that commission in favour of referring clients to an insurance broker selling term- and full-life coverage. PS Insure is betting its program will to appeal them and others. A large part of the gamble is based on remuneration that approaches the fees they can claim for arranging creditor insurance.
Still, there is another selling point, Young said Thursday.
“Leaving client to arrange their own life insurance often means that they sign with one of the big banks and while there is a regulated firewall between insurance and banking,” he said, “the broker’s ownership of future mortgage deals from that client may be challenged.”
That is less likely to be the case with PSI-arranged coverage, said Young, pointing to the brokerage’s strong relationships with insurers outside of mortgage lending.