As banks assume a higher profile in the insurance business, they are beginning to come under fire from consumer advocates and the media for marketing particular policies.

Of particular concern are two narrowly focused insurance products-credit life insurance, a mainstay of banks, and accidental death and dismemberment, a newer product for most.

Critics contend these policies are of dubious value.

A recent story in The Washington Post, titled "Insurance Pitches Worth Being Tossed into the Junk Pile," took banks to task for offering these products.

James Hunt, a consultant for the Consumer Federation of America who was quoted in the article, saved his harshest criticism for accidental death and dismemberment policies, which banks often offer through the mail.

"That's what we would call junk insurance, and that should be avoided by virtually everyone-unless you like to jump out of planes or scuba dive," Mr. Hunt, a former banker, said later in an interview with American Banker. In recent years, banks have been striving to make a name as sellers of life insurance and property and casualty policies. Many industry observers say banks are in a position to take share away from insurance agents.

But Mr. Hunt and others warn that banks could undermine their legitimacy by pushing questionable products.

Gerri Detweiler, author of "The Ultimate Credit Handbook," said credit life insurance, which insures that a loan will be repaid in the event of a borrow's death, can often sour a relationship with a bank customer. When the insured or family members try to collect, they learn about product limitations.

"Most consumers who accept these offers don't realize that they are not good deals," she said.

Mr. Hunt said he dislikes the variations in price to consumers for credit life policies. Because the maximum premiums are set by states, a consumer in a high-rate southern state might pay three times more than a New York resident for identical coverage, he said.

For these products, banks typically get a 40% up-front commission, Mr. Hunt said. Because the cost of the policy is built into the loan, the bank also garners interest income off the 60% sent to the underwriter, he said.

At least one bank insurance industry representative argues that the critics are overstating the problems with certain policies.

E. Kenneth Reynolds, executive director of the Washington-based trade group, Association of Banks-in-Insurance, argues that both credit life and accidental death polices have their place.

"The benefit of an AD&D policy is that it's inexpensive and simple, and it's helpful to people who have little or no coverage at all," Mr. Reynolds said. "The realities are that a large part of the American population aren't insured at all, and many of those who are insured are underinsured."

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