Let’s face it-life is a gamble. Help your credit union members see the wisdom of payment protection We all take risks every day, whether we know it or not. Accidents can occur while driving, flying or working in our job. Just as smart gamblers cover their bases to make sure bets won’t break their bank account, consumers who borrow big money from their credit unions for that dream house or vehicle can safeguard their lifestyle simply . By purchasing credit life and disability coverage, smart consumers are doing the same thing when it comes to their financial obligations In fact, for a few dollars a month, credit union members can create a “safety net.” for themselves and their families by helping to secure Credit insurance may help consumers and their families secure financial stability in the event of disability or death. The cost of credit union-provided credit insurance is a small price for a consumer to pay to gain consumer peace of mind-especially when one considers that: * One death occurs every five minutes (source: 2000 Injury Facts, National Safety Council). * One person suffers from a disabling injury every two seconds (source: 2000 Injury Facts, National Safety Council) For consumers/credit union members and their families, credit insurance offers an affordable way to hedge the risks that naturally present themselves in life. CU-provided credit insurance gets a “Thumbs-Up” from consumers Regardless of the harsh words consumer groups level at it, consumers who buy credit insurance consistently give credit insurance a positive review-particularly when the coverage is purchased through a credit union. In fact, in a 1997 review of credit insurance, Steven Brobeck, president, Consumer Federation of America remarked that although CFA studies have criticized credit life and disability insurance as a rip-off because it was overpriced and returned little to insureds, CFA has always singled out, and made exceptions for credit insurance sold by credit unions as a good value. Protection for Members In 1999, a survey for the Life and Health Insurance Foundation for Education conducted by Roper Starch Worldwide found that 25 % of U.S. households have no life insurance. And those Americans who do have life insurance frequently do not have adequate coverage, particularly if they rely solely on employer-provided coverage. Most consumers need to supplement their existing insurance-especially if they are borrowing large sums of money. When you offer credit insurance to your members , you enable them to efficiently and economically allow them to have an efficient and economical way to help provide additional financial security for themselves and their families. But it’s up to the credit union to show members that credit insurance is a good product and worth while investment. After all, many members borrow money to purchase their dream home or a new car to purchase a certain kind of lifestyle, yet they don’t want to pay just a bit extra each month for payment protection should misfortune strike. How can your credit union help members better understand the importance of protecting their investment? Take four key steps: 1. Provide ongoing training. Your member service representatives will not feel comfortable pitching credit insurance unless they fully understand and believe in the product. Make formal training sessions a regular event at your credit union. One excellent training tool is to share the real-life stories of credit union members who actually have had to use the credit insurance. In some cases, the payment protection may have saved members or their family members from financial ruin. 2. Track performance. Now that you’ve trained your lenders to sell payment protection, it’s essential to track individual results. Accountability is critical. When employees know their cross-selling results are being monitored and compared, their performance invariably improves. 3. Offer incentives. Formal incentive programs are worth every penny you spend on them. Set monthly growth targets on both loans and insurance sales, and then devise a system to reward great results. You can give monetary bonuses on an individual or team basis, or award prizes such as merchandise, complimentary dinners and the like, or decide upon some combination of the two. Fostering friendly competition among colleagues and awarding prizes to the top performers is a fool-proof way to grow your credit insurance sales. 4. Management buy-in. If your employees know that senior management is behind the product 100%, then they are more likely to believe in it themselves. 5. Always present loan payment with insurance cost. Rather than pitch credit insurance as an afterthought, make sure your lenders include the cost of the coverage with the initial monthly loan payment. Of course, members need to know that the coverage is optional, but quoting the cost of the insurance at the outset makes it easy for the lender to say, “For the cost of your daily cup of coffee, you can have peace of mind with this loan.” Our credit union clients have told us that this practice is extremely effective. Protection for your CU Realize that training your staff to effectively promote credit insurance is smart business for your credit union. Quite simply, the more credit insurance you sell the more fee-based income you will earn for your credit union. A strong credit insurance program is instrumental to growing your organization. And don’t forget that by increasing the number of loans that are protected with credit insurance you will automatically decrease the heavy costs-both monetary and in terms of member goodwill-that are associated with collections procedures.