Tips for selling credit insurance

My boss, Steve, always did an excellent job of handling credit insurance objections. I think the secret to his success was that he believed in it. I always knew that if Steve were buying a vehicle himself, he would include life and disability insurance in his own contract. Steve had a favorite phrase from which you could summarize why he was such a successful business manager. It also described what he thought the main ingredient in anyone else's success should be. He'd say, “You gotta believe.”
What he meant was you had to believe that credit insurance would be invaluable to a family the day someone became ill or was injured. Additionally, you had to believe in the importance of the extended protection plans you were selling. You had to believe that the extended protection on the vehicle would really come in handy and save customers a lot of money if they needed it.
While you may also have employment insurance (covering the customer who is laid off), we will concentrate only on protecting one's credit for reasons of health or death.
It's important to differentiate between credit life and credit disability insurance. With credit life, the insurance will pay the loan balance, either in full or up to the policy maximum (whichever is less) if the customer should die. In this case, the survivors are protected from any payment liability.
On the other hand, credit disability insurance only makes the monthly loan payments (up to the policy maximum). This takes place if the customer is under a doctor's care and unable to work for 14 days or more (specifics vary among policies - these are the more common guidelines). With credit disability insurance, the customer is secure knowing that his payments will be made in case of an unfortunate accident or illness.
Advantages to the dealership
Part of Steve's, “You gotta believe,” philosophy about protection plans also centered on the advantages to both the dealership and the business office. He felt there are several important reasons why a business manager and the dealership should take every opportunity to offer credit insurance to their customers:
– A dealership gains a competitive edge. Since not all financial institutions offer credit insurance to their customers, a dealership is offering an additional service, which helps to develop a personal relationship with its customers.
– Goodwill and customer satisfaction are created. Credit insurance means that the bank won't have to pursue payments from the family of a disabled customer. Therefore, goodwill is created when these benefits make the customer's payment.
– It increases income. The business office and the dealership receive income on everything they sell.
Customers really want credit insurance. Many studies have confirmed that a large number of consumers actively favor credit insurance. The decision to purchase credit insurance usually stems from rational economic motives. Note the following studies:
– A federal survey of more than 1,200 families found that almost 75 percent thought credit insurance, in general, to be “good,” 20 percent rated it “fair” and only 5 percent thought it was “bad.”
– When credit insurance was described in another national survey, more than 50 percent indicated a desire to have such coverage.
– Customer satisfaction with credit insurance has been measured by asking current customers if they would like to cancel their credit insurance. In survey after survey, fewer than 10 percent indicated that they wanted to cancel.
– More than 700 respondents were asked if they thought credit insurance was expensive. A full 30 percent said their credit insurance was inexpensive, 52 percent said it was priced about right, and only 18 percent would label their coverage “expensive.”
– Would they buy it again? Nearly 95 percent of credit insurance customers indicated “yes,” they'd buy it again.
Conclusions: People generally like credit insurance, when it is properly explained to them. After customers buy credit insurance, they are satisfied customers.
Who buys credit insurance?
Some customers are more likely to purchase credit insurance than others. Steve always seemed to know which customers he could successfully sell and which ones would be difficult or impossible.
Your best candidates for credit insurance are customers who:
– Are unsure about their financial future.
– Have inadequate insurance.
– Are incurring high levels of debt.
– Have lower income.
– Have experienced credit problems in the past.
Remember, under-insured, financially insecure, high-debt or low-income customers have the greatest need for credit insurance protection. This protection will provide customer satisfaction by giving the additional monetary cushion needed to survive uncertain times.

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