How CUs Can Turn Death & Disability Into A Positive Dialogue

SAN ANTONIO, Texas - The thing about selling insurance is, everyone knows they probably ought to have it, but it's hard to get excited about talking about things like death and disability.

But credit union loan officers who are squeamish about getting into these topics need to recognize that in addition to the potential fee income that selling insurance brings, it also really is a service to the member, according to SWBC VP Mark Hein.

Credit unions can educate their members about the value of credit insurance and point to very real-life situations where such insurance can come in handy, such as various natural disasters and the high number of military deployments that affect many thousands of people nationwide, he said.

Instead of pushing just one insurance product, some credit unions are offering bundles of protection for their members, noted SWBC Regional VP Charlie Mangan. For example, Mangan said a credit union could offer credit, life and disability insurance combined with GAP, debt cancellation and also extended warranties for automobiles.

And it's not just selling these products that can sometimes be tough for the faint of heart. After all, the other thing about insurance is, when someone actually needs it, it usually means something bad has happened.

Take a member who has let an auto insurance policy run out or is injured on the job, for example. It typically means someone has to deal with a member who's already in a foul mood.

Support Insurance Systems Agency, Inc. CEO Rhoda Sheets said a new way to administer CPI is a bit friendlier and fits in with the traditional CU mission of helping the membership.

Sheets said SIS's Continuum CPI product called Premium Alternative is a true monthly premium that isn't assessed on the lifetime of the loan, but the outstanding monthly balance. Sheets said CPI is a product that can potentially reach every member of any credit union, but needs to be used fairly and with the right member.

"You can't drive members away. If you don't get it right, it could drive borrowers away for next loan," Sheets said.

Sheets said a monthly premium versus a large, single payment based on the entire loan won't frighten or burden an already struggling borrower with more debt or angst. Sheets said that Continuum uses intense tracking and monitoring of a CU's core data to correctly identify members who need loan insurance, all of which is done electronically with little or no bother to the CU.

SIS VP Helen Salas said CUs using the Premium Alternative usually have a member's loan insurance lapse three or four months before they get back on their feet after a sickness, divorce or even bankruptcy. As other CPI insurance experts told CU Journal, CPI or debt cancellation is a true service to the member while maintaining CU revenue. If they're hit with a $2,000 assessment, a member might just keep the car and force the CU to track them down.

"It keeps them in their cars and paying their loan," Salas said. "We don't want the premium itself to become a problem." SIS presently tracks 100,000 accounts in seven states around the nation.

CU JOURNAL ONLINE SURVEY

Given the margin squeeze, with respect to insurance sales we:

Are placing the same importance on it 54%

Are placing more emphasis on it 33%

Would like to place more emphasis on it but lack the skill to do so 12%