Sales Tip for Bank Brokers

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Aug 3, 2007 12:59 pm

I posted this idea over at another forum but thought you guys might like this.

Hey Bank guys!!Want to increase your insurance sales, get in front of business owners and develop a financial planning relationship with them?  Make money for your branches?  Listen up.  I'll tell you what worked for me.

Background:  I was a commercial lender form many years before getting licensed (insurance and securities) and continued to do loans as well as investments.  I haven't been at a bank for over 8 years, so you might want to check with your bank compliance dept, things may have changed.

Banks can require life insurance (or at least used to be able to) on the primary borrower on a Commercial loan and take a collateral assignment for the amount of the loan.  

The reason that I did this was if the primary business owner (the rancher, contractor, dentist) were to die I didn't want to repossess the collateral or liquidate business assets to pay for the loan, leaving the family of the business owner in even worse condition if there was a death. 

If the client already has insurance, you could take an assignment on that policy, but most of the time the borrower was under insured anyway.  I would offer to write the policy and finance the premiums, if needed, for the term of the loan with an additional amount written into the loan.   Most people took the "package deal".   I still have policies in force from over 15 years ago.

While you are discussing life insurance with the business owner in conjunction with the loan, now is a good time to bring up disability insurance as a further protection for their business.  Most small businesses are solely dependant on the continued ability of the business owner to be healthy and able to work.   Other topics that you can broach are business succession planning and retirement planning.

Since I WAS the loan officer, I already had all of their financial information at my finger tips.  However, I was often called in to present to clients of other loan officers at different branch geographic lending areas, but that wasn't a problem for making the additional presentations.

The bank where  I was employed, had a cooperative program where all commercial loans were given a referral to the insurance specialist and investment planner.  It wasn't mandatory, unlike the life insurance as collateral, and not all borrowers would take advantage of an financial consultation, but enough of them did.   Obviously, not everyone is insurable, but at least you will get in front of the business owner and able to discuss other financial ideas.

I made sales, protected the Bank's interest in loan quality, the loan officers got referral compensation, the Bank made money from the sales, the Branch Managers didn't see this as taking from their deposits and liked the program, the client's relationship with the Bank was further deepened by the insurance and investment products and had personal and business planning issues taken care of.    Win win for everyone.

Write a proposal (Power Point rules!!) with some figures and charts for revenue based on loan amounts, premiums on insurance, percentage of loans that might be eligble etc.  Bring this to the head of the commercial lending dept and sell them on the concept.


Aug 3, 2007 4:33 pm

Thanks you Looney