Why life insurance matters for members and credit unions
Life insurance isn't easy to talk about for obvious reasons. However, increasing member awareness of life insurance could play a vital role in helping members, especially middle-income families, stay financially secure in times of need. The simple truth is if something unexpected happens, life insurance can help the people your members care about most stay afloat. Nobody wants their passing to be the reason their family is scrambling to cover expenses. A basic life policy can prevent a lot of stress for members and their families.
The biggest hurdle: Procrastination
Most people put off thinking about life insurance because they don't want to consider their own mortality. Others assume the process will be a hassle, requiring medical exams or other testing. With automation and instant decision tools however, most members can find out in minutes if they're approved. The purchase process really is starting to look like shopping for everyday items online. And that's a good thing. We should want the process to feel easy — clear, quick and stress-free.
Helping members understand life insurance
Life insurance can be confusing. That confusion can lead to hesitation when it comes to purchasing this invaluable protection. Case in point, only about half of consumers have coverage¹. A big reason more people don't have life insurance is, they think it costs much more than it does. It's only through conversation and education that they realize life insurance can be surprisingly affordable. That's why taking a budget-first approach is critical. Instead of starting a conversation about life insurance by talking through the "right" amount of coverage, start by helping the member understand what can be afforded comfortably.
Simple ways to help members get started
Members are juggling a lot of priorities. Couple that with the many economic pressures all of us are feeling and that could be the recipe for reprioritization of life insurance. After all who has the time to shop for something they may feel they don't need right now. Truth is members don't need a big, complicated plan to add meaningful protection. Keep it simple. A modest policy can make a big difference.
Quick ways credit unions can simplify life insurance for members:
- Start with budget first
- Explain the difference between term and whole life in one sentence each
- Offer digital tools or calculators
- Use plain, simple language
A lot of people are unsure about the kind of coverage they need. Whether a member prefers talking with an agent or exploring options online, things need to be broken down in a straightforward way. Often, helping people understand the options available to them is just as large a hurdle as procrastination.
What life insurance means for credit unions
Credit unions benefit from this work, too. Loan growth has been softer than usual, and many leaders are looking for ways to strengthen their income statements. When members purchase life insurance through a credit union, it creates member-friendly, noninterest income the credit union can rely on. It's a meaningful way to diversify revenue without adding complexity to the member experience.
Beyond the financial benefit, life insurance can also help protect the credit union's portfolio. When a member with a loan passes away, the financial strain on their family can make repayment difficult. But if that member has life insurance, their loved ones are in a better position to stay current and avoid hardship. It's a protection that supports the member and reduces risk for the credit union.
One benefit that often gets overlooked is relationship building. Offering life insurance gives credit unions another way to show they're truly looking out for members' long-term well-being. It's a chance to reinforce the message that the credit union is a partner through every life stage — even the ones no one wants to imagine. When members feel that level of support, it builds trust and loyalty that lasts.
Life insurance isn't just a financial product. It's a promise that someone will be there for a family during one of the hardest moments they'll face. For credit unions, offering life insurance is another expression of people helping people. It strengthens members, strengthens the institution and strengthens the relationship between the two. That's exactly what the credit union movement is all about.