Dime Bancorp is crediting a simplified sales process for boosting sales of a term life insurance product it recently began offering.
The product, featuring a one-page application, no medical exam, and rates that are guaranteed for 10 years, has attracted 1,700 approved applications since March.
"It has far exceeded my expectations-a successful rollout would have been half of that," said Robert J. Mittel, director of insurance for the New York thrift.
In fact, Mr. Mittel said, the "Protect 10" policy, which targets Dime checking account holders, is selling at a record clip for a newly introduced insurance product.
Protect 10, developed by Essex Corp. in cooperation with underwriter Continental Insurance Cos., was born in 1996 but has since been simplified.
The policy gives simple term coverage of either $50,000 or $100,000. Flat-rate premiums are determined by five-year age groups. To qualify, an applicant must supply only basic address and beneficiary information and answer four yes-or-no questions.
For a $100,000 Protect 10 policy, a 36- to 40-year-old would pay a monthly premium of $22.67, deducted directly from a checking account.
Applicants are asked whether they have seen a physician in the preceding five years for heart, lung, kidney, liver, cancer, or any of several other disorders.
They are also asked whether they have been treated for alcoholism, substance abuse, mental disorders, or AIDS. Finally, they are asked whether they have been hospitalized for more than seven days in the last two years. No question addresses smoking.
Traditionally, people have been offended when brokers quote preferred rates that turn out to be less than actual premiums, said Thomas G. Waters, vice president at Essex, a New York investment marketing firm that caters to banks.
With age banding and simplified questions, the customer is told the actual rate immediately, he said. It's a quick process, and fewer than 5% of applicants in the 46 states where the product is approved for sale have been rejected, according to Essex.
"With life insurance it has always been a multiple-step process," said Mr. Waters. "The longer it goes on, the more people you lose just because of a lack of interest."
Protect 10 serves middle-market customers who are largely ignored by traditional life agents, Mr. Mittel said.
But there are skeptics. Michael D. White, an insurance consultant in Radnor, Pa., said term products like these do not build relationships even in conjunction with a checking account. "I view that method as transactions," he said. "The bank hasn't learned any more about where assets are."
But Mr. Mittel countered that the checking account is the cornerstone of the banking relationship. Therefore, he said, by linking term insurance with checking, the bank can "strengthen and retain the relationship that will allow it to provide the customer with more advanced financial products over time."
