More so than sales penetration figures suggest.
Just how critical is it to sell Critical Illness Insurance? Judging from the lacklustre sales of this product, not very! But it is worth your while, and that of your customers, to take a closer look at what the product is and what it can do.

First, some history. Insurance dates back to Babylonian times (around 2100 BC), when traders guaranteed the safe arrival of goods shipped by caravan. Much later, in 1347, the first written insurance contract was drafted and executed. That policy contained specific terms and conditions and was signed by individuals or groups of individuals who effectively guaranteed the losses - thus initiating the term ‘underwriters’.

The first actual insurance company was formed in 1688 over a cup of coffee. There was no Starbucks then... it happened at Lloyd’s Coffee House in London, where merchants and businessmen frequently met to discuss commerce. If the name Lloyd’s sounds familiar, it should; that company grew to become Lloyd’s of London, the first true insurance company and the foundation for those that followed.

Importance of insurance
Fascinating as that history might be, and it is much more in-depth than I am presenting here, what really matters are the questions: how beneficial is insurance; does one really need it; is it worth the cost; and can one do without it?

As Finance and Insurance (F&I) specialists we should all know the answers to these questions. Simply put they are: very, yes, yes, and only if you have a crystal ball... and only then if it reveals a trouble-free future. We should all be believers in the advantages of having such protection not just for ourselves but also for our clients, who put their faith in us to counsel them responsibly.

We all know about the features and benefits of the most common of our creditor Insurance products, Loss of Life. We should all be able to rattle off benefit after benefit of our esteemed Accident and Health (aka A&H, H&A, Sickness and Accident) insurance. Some of us (depending on your supplier) may also know about Loss of Employment Insurance (aka LOE or Job Loss), and some may even know about Critical Illness Insurance.

Before I dive into the latter it should be clear that most if not all of the products marketed in Canadian F&I offices are underwritten by an insurance company. Most if not all the ‘pro-packs’ (I hate that term by the way!) have a policy of insurance covering performance, as do your Service Agreements. If they are not insured, then the vehicle manufacturer has taken the risk by putting its name on the document. All others (if they do or would exist) would be risky business indeed for all parties concerned.

Critical Illness coverage
Critical Illness coverage represents one of the greatest opportunities, and values, in the insurance industry. How it works is simple... if an insured person is diagnosed with a covered illness which is deemed to be life-threatening, and survives past 30 days from the date of receiving the bad news... then the outstanding balance of the loan will be paid out. From that time forward all the person has to do is focus on beating the odds and getting well. Whether they do or not, their loved ones will be relieved of the burden of car payments, and their vehicle will be theirs free and clear.

When someone is told ‘to get things in order’, this doesn’t mean that their life is coming to an immediate stop. It means that according to the specialists, this particular person has a limited time left. The last thing someone wants to worry about during such a trying time is money. It is then that people start doing their accounting... "Do I have enough insurance, and how is my family going to cope?"

Certainly some have adequate life insurance (and others believe they do) but we all know it is never enough when it is needed. A&H won’t necessarily kick in yet because these folks may still be able to work! Regardless, this protection will pay out a debt prior to having to use the benefits of one’s Life Insurance Policy, which would be better served paying off education costs, living expenses, and the like for any remaining family members.

Know what you are selling
Are there some complicated terms and conditions relating to this coverage? Of course. Do the policies use medical terms such as ‘in situ’ and ‘thrombosis’? Yes they do. Should you know what these things are when selling such insurance? Most definitely!

Critical Illness Insurance is a level of protection all people should consider having. Cancer, stroke, heart disease - the leading causes of death in our society - can happen to anyone at any time and without warning. As an F&I manager you are helpless to prevent it. What you can do is prevent some of the hardships that would follow.

Read the back of your Critical Illness polices. Get your reps to teach you the ins and outs of the coverage. If you need more detailed explanation, contact me. I’ll be happy to go over it with you.

Once again the message I have shared in previous articles is one that must be repeated; offer this and every product to every person every time. It’s not up to the F&I manager to decide whether the prospect should have a type of coverage or not. It’s up to the customer. So give him or her the opportunity to decide.

You can email Harvey at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Harvey Cohen is the author of four books and principal of Harvey Cohen Learning Systems, Inc., a Canadian company dedicated to automotive F&I and sales training and support. He can be seen as the sales and business coach on the TV show, Style by Jury.

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