April 1, 2014
Have you ever been told that you can never win the lottery if you never play? The same motto holds true that you will never know if a member is interested in purchasing credit insurance if it's never offered. Your credit union may be missing out on helping clients and adding revenue to your bottom line primarily because no one asked.
In a recent Transamerica study, 33 percent of respondents were not offered credit insurance when they took out a non-mortgage loan under $100,000. Almost half of those respondents had never heard of credit insurance before the survey, and most of them liked the idea of it.
Of the 33 percent who were not offered credit insurance:
- 16 percent had never heard of credit insurance.
- 75 percent felt it is a good or excellent idea.
- 64 percent of respondents agreed that credit insurance fills a need for them.
Now think about the number of non-mortgage loans your credit union processed last year. If your CU follows the same pattern as the survey, it is possible that one-third of those members were not asked if they would be interested in credit insurance. That may add up to a lot of members who wanted the additional security but did not know it was an option.
Your credit union may be missing out on an opportunity to better protect your members and add to your bottom line.
In this volatile market, your members may want to protect themselves and their family by protecting their loans from unforeseen circumstances, and credit insurance can help them do exactly that. Credit insurance may not be for everyone, so each borrower's needs should be considered independently. But if your loan officers aren't offering credit insurance at the time of the loan, your financial institution may be missing out on a few things:
- Creating an "even more" loyal member: 92 percent of respondents who did purchase credit insurance said they saw the value in it and would purchase it again with their next loan.
- Meeting a need that helps your clients feel more at ease: The primary reason consumers purchased credit insurance was because of the peace of mind it provides.
- Offering options to help meet your members' needs: Credit life and disability insurance was considered the most valuable benefit by 30 percent of purchasers. Beyond that, the top benefits in popularity order are critical illness, terminal illness, hospitalization, skip a pay, and credit involuntary unemployment insurance.
- Confidently achieving financial objectives with less risk: Loan protection products can help avoid catastrophic losses due to members' adversity, reduce bad debt reserves, allow you to secure better borrowing terms and expand your sales safely.
- Growing your credit union: Credit insurance also allows you to motivate your staff by providing new skill sets and goals, promote your institution through educating your borrowers, create strong customer relationships, and grow fee-income opportunities.
Encourage your employees to embrace a cross-selling and client-centric mindset.
A client-centric sales process that includes a suite of financial protection products allows your staff to present a complete consumer financial package. Your credit union can expand relationships with your members and cultivate employees who have the ability to satisfy members' needs.
- Embrace training within the culture of your credit union and inspire employees to become well-educated.
- Set goals for employees, including sales and member satisfaction.
- Reward employees for providing service that will have your members returning for more.
- Motivate employees to educate your members on all financial protection products available.
It may not quite be winning the lottery, but the successful implementation of loan protection products can be an accelerator of growth. Combine that with an expertly trained sales force and you will create stronger client relationships and grow your credit union across various financial product lines.
Tom Kazar is VP/sales and leader of the sales team for Transamerica - Financial Solutions Group. His focus is on adding new insurance industry products, expanding marketing distribution channels and helping agents grow their business. With more than 20 years of experience in the financial institution and credit union industries, Kazar has a talent for homing in on the most strategic, cutting-edge marketing opportunities that move our business and partnerships toward exponential growth. He can be reached at 630.215.6042 or email@example.com.
Transamerica Life Insurance Company (Home Office - Cedar Rapids, Iowa) and affiliated Transamerica companies provide insurance products and services. Through the Life & Protection division, the Transamerica companies offer a wide array of life and health protection solutions with a common purpose: to protect families and their dreams.
As part of the Life & Protection division, Transamerica Financial Solutions Group caters to the needs of credit unions, community banks, and larger financial institutions. We offer specific programs for credit insurance and debt cancellation products including marketing strategy, training, marketing support, technology software, and related services.
Transamerica - Your Complete Loan Protection Product Provider
Transamerica's overall approach and philosophy positively impacts and creates a successful culture with credit unions of all sizes. Learn more about the Transamerica Financial Solutions Group and the products and programs available to help expand your business and improve member services.