HOW TO EXPLAIN LOAN PROTECTION
March 19 2020
Customers applying for a vehicle loan often don’t think about how they would cover their loan payments if something unexpected were to happen to them. Help your customers plan ahead and be prepared by explaining how optional insurance can help protect their loan, their credit rating and their family lifestyle against a sudden life event.
EDUCATE YOUR CUSTOMERS
How do you get your customer to understand the benefit of a product that provides answers for life’s tricky questions? Start by ensuring the customer understands the product early in the conversation. In line with the Fair treatment of consumers, you will want to empower the customer to make an informed decision..
As a whole, Loan Protection is simple to understand with a straightforward explanation: If you lose your job or you’re disabled, we make your loan payments – and in the event of your death, your loan or your negative equity disappears up to a fixed amount without burdening your family.
Educate your customers on the importance of protecting not only themselves, but also their family’s lifestyle. Consider asking some questions they often haven’t considered beforehand that demonstrate the value of Loan Protection.
- In the event of your death, who would be responsible for the remaining amount on your loan?
- In the event of illness or disease, how would you make your payments?
- If you were sick or injured, would you want your car payment covered?
Once you have some of these answers, you will be able to identify your customers’ needs, clearly communicate the value of credit and loan protection products and recommend appropriate coverage options, all of which will allow them to make an informed decision according to their needs.
ENSURE YOUR CUSTOMER IS PROTECTED
Unlike car and house insurance, loan protection is optional and voluntary. One of the most common objections heard in the financial services office is “I don’t need it, I have good coverage at work.” The best (though often time consuming) response to this concern is to investigate how loan protection may fill gaps in existing insurance coverage and highlight what they’re covered for if they purchase the product.
FAIR TREATMENT OF CONSUMERS – THE ULTIMATE GOAL
Your role is to ensure the customer has all of the information they need to make an informed decision. It is not for you to recommend a product, but simply to educate the customer on the value and benefits of Loan Protection so they can decide which product is best suited for their individual situation.
LEARN MORE ABOUT LOAN PROTECTION
WHAT IS LOAN PROTECTION?
Loan Protection is designed to be a financial safety net for your customers and their families when they need it most – such as if they are unable to work. Loan Protection takes care of the loan payments (the loan balance or the negative equity) and minimizes any financial obligation from falling on their family or dependants in the event of death, disability, critical illness or loss of employment.
DESIGNED FOR THE CUSTOMER
Loan Protection offers two distinct plans with customizable options to meet your customers’ unique needs. As an added bonus, you don’t have to worry about the dreaded health questionnaires, as they aren’t required.
Carefree works for customers who want specific coverage in place, as it’s a customizable plan with the option to select coverage for life, critical illness, disability and/or loss of employment.
Essential is a bundled plan with a competitive premium and just enough of the coverage from Carefree to bring peace of mind to your customers. Essential is a pre-packaged option, including coverage for life, disability and loss of employment, which appeals to many Canadians for its great value with an affordable price tag.
In any purchase decision, the purchase price must be less than or equal to the perceived value. By offering more coverage for less money in the Essential plan, consumers can clearly understand that value.
Want to learn more about Loan Protection? Contact your LGM dealer development manager or call 1-866-287-6200.
This blog is written by LGM Financial Services Inc. and posted for informational purposes only. While we want to provide you with valuable insights into vehicles and protection products, none of the information posted in this blog is intended to provide you with any mechanical, financial, legal or other professional advice. LGM is committed to integrity and transparency; we want you to know that LGM may have a financial interest in certain products mentioned in this blog. We only blog about products that we know and trust. Product information is provided in summary form; please be aware that contractual terms and conditions apply to each product. LGM Financial Services Inc., “LGM”, “SecureDrive” and applicable logos are trademarks of LGM Financial Service Inc. All Rights Reserved.