Errors in Mortgage Life Insurance Plan Can Prove Costly
Be careful when it comes to mortgage life insurance.
Why? Knoxville, Tenn., station WATE recently told the story of a couple that was new to the Knoxville housing market and signed up for a mortgage life insurance plan - only to find their seemingly helpful policy full of mistakes.
Ones that could have cost them plenty.
Under this kind of policy, if one spouse dies, the mortgage is subsequently paid off in full.
So when Margie and Butch Pfeiffer wanted to protect the East Knox County home they bought in June 2006, they purchased a life insurance policy to do just that.
But when the mortgage life insurance policy arrived a couple weeks ago, they were concerned about several mistakes on it. Specifically, Social Security numbers, ages and birthdays - not exactly trivial details.
The Pfeiffers said they were truthful in all their answers. Yet there were many things wrong.
“Let’s see, closing date on our house, October 6. We moved here June 30,” Margie said.
The Pfeiffers said their agent, Shane Vaughn, visited in December and spent several hours explaining their policy and filling out paper work. Vaughn’s card says he is general manager of Tennessee mortgage protection for Chase Financial.
But when the couple attempted to call Vaughn, they couldn’t get answers to their questions. With the mistakes, they figured their home mortgage would not be protected if something happened to either of them.
The Pfeiffers wanted their contract. When they were finally able to contact Vaughn, he downplayed the mistakes on the couple’s policy, stating that they were likely typographical errors.
In a fax to the Pfeiffers, sent two days after the call, Vaughn apologized. He claimed his writing is often illegible, said the errors should not have happened, and he’s refunding their premium and canceling their policy.
The Pfeiffers will search for home loan protection with another company.
The lesson learned here if you do opt for this mortgage loan protection option, make sure your information is 100 percent accurate. Had they not caught the mistakes and helped bring them to the company’s attention, a major problem could have hit this couple at the worst possible time.
SOURCE: WATE 6 - Knoxville