A quick guide to help your customers understand loan protection insurance

Educate your customers about the importance of safeguarding their loan, credit rating, and lifestyle in the event of an unexpected life event, considering optional payment protection insurance. 

Planning ahead and being prepared can make all the difference!

Educating customers on the value of payment protection when discussing a product that offers solutions to life’s difficult questions can be tricky. It’s important to start by explaining the product early in the conversation. 

Payment protection insurance is straightforward: if you lose your job, become disabled, or pass away, your loan payments or negative equity will be covered up to a fixed amount without impacting your family. 

But, being straightforward may not necessarily mean this will be an easy topic to talk about. It’s important to consider the complexity and depth of the questions you will have to ask. It’s critical to educate customers on the importance of protecting themselves and their family’s lifestyles and ask questions that showcase this significance.

Here are five questions that can help assess these needs:
  1. Have you considered what would happen if you couldn’t make your car loan payments due to an unexpected event, like a serious illness or job loss?
    This question prompts customers to consider potential financial vulnerabilities and highlights the value of insurance.
  2. Do you have a financial safety net or savings specifically designated to cover your car loan in case of unforeseen circumstances?
    This question assesses the customer’s existing financial cushion and whether they have provisions for loan protection.
  3. What other financial responsibilities, such as family expenses or other loans, could be impacted if you couldn’t make your car loan payments?
    By understanding the broader financial impact, customers may recognize the need for car loan insurance to protect their overall financial well-being.
  4. Have you evaluated the cost of potential financial hardships, like medical bills or temporary job loss, and how it could affect your ability to maintain your car loan payments?
    Encourages customers to consider real-life scenarios and how loan protection can mitigate such financial risks.
  5. Can you describe your long-term financial goals and how your car loan fits into your financial plan?
    Understanding the customer’s financial aspirations and how the car loan fits within those goals can reveal the importance of loan protection to ensure their future plans remain intact.

Once you identified your customers’ needs, start by communicating the value of credit and loan protection products, and appropriate coverage for each option, so they can make an informed decision based on their lifestyle and needs.

You have the important role of providing helpful information and educating your customers on the value and benefits of Payment Protection Insurance, but ultimately the decision of which product to choose should be left up to the individual’s personal needs and circumstances.

Understand Payment Protection Insurance

Payment Protection Insurance or Loan protection is a type of financial safety net that helps borrowers and their families by covering loan payments in case they are unable to pay due to certain circumstances such as disability, critical illness, loss of employment or death.

Life & Critical Illness

This option is offered as a bundle - A $100,000 maximum insurance available, to protect them during the entire term of their loan.

Protection against the added stress of worrying about a vehicle loan at a devastating time, or leaving their loved ones with the burden of financial hardship, repossession or bankruptcy.

Disability

Offered separately, Disability Insurance will cover their monthly payments up to $1,500 will be paid directly to the lender in the event of a debilitating injury for up to 72 months per occurrence. This benefit will be paid until the person is able to return to work, or their coverage expires, or their loan is paid in full.

Loss of Employment & Disability

Also offered as a bundle - Loss of employment & Disability will cover up to $108,000 altogether. Should a customer involuntarily become unemployed, Job Loss Insurance provides payment protection by making payments on their behalf for a limited period of time.

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