Monday, January 01, 2001

Selling Loan Protection


American Dealer January 2001

Dealership personnel often find it a difficult, if not impossible, task to present the benefits of credit insurance at the time of closing a loan. The customer is alive and healthy enough to be in front of the manager to sign the loan documents. It is a rare customer in these circumstances who can imagine illness or injury requiring credit insurance.

The simple truth is that most of us are under insured. We neglect to update our insurance to match current liabilities. Most of us believe we will get around to evaluating our insurance needs later -- when we have more time, more money, or more possessions. "Later" seldom comes until illness and death meet us head on.

After attending one of our F&I seminars, a sales business manager confessed that she no longer presents credit life and disability insurance. Instead, she shares a plan to protect the new loan in the event the customer cannot make their payments due to injury or illness. She describes coverage that will also provide a lien-free title for a loved one if the customer meets St. Peter before the loan term is up. This sales business manager offers loan protection to her customers.

Credit insurance is a tailor-made policy that safeguards the customer's good credit in the even of untimely illness, death or injury. It pays in addition to other benefits the insured may have through their employer or other provider.

Present the benefits of this valuable policy to everyone who qualifies for the coverage. Your clients have the right to make the choice for themselves. How can they make an informed decision without knowing all the facts about the benefits?

According to the Bureau of National Statistics, 97 % of Americans have as their only source of income their ability to work. If the new loan payment they are incurring would be a burden to their family during a period of illness or injury, this protection could come in handy. After all, no debt should out live its maker!

Keep your explanation of credit insurance simple and consistent. Keep your dealership properly licensed to offer this product. Keep the rule of 100% solicitation 100% of the time to 100% of your customers.