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Securian Unveils Debt Protection Products
By Alton Gary Simpson
ST. PAUL, MN--Securian Financial Group Inc., a provider of credit life and disability insurance, debt protection and other products and services here, has unveiled its new suite of debt protection products. Generally, debt protection products cancel or suspend loan payments without penalty in the event of a covered event, such as accidental death, disability or involuntary unemployment. This helps protect borrowers' credit ratings due to an unforeseen life event.
Debt protection products and credit life insurance are similar loan protection programs. However, debt protection is a lending product--an agreement between the borrower and the lender--not insurance. As a result, debt protection has more flexibility when it comes to design, marketing and pricing. Securian's debt protection products are a result of the company's experience serving financial institutions in the marketplace as well as client research conducted throughout 2006.
The forced purchase of mortgage life insurance products by subprime borrowers has been considered by consumer advocates to be a predatory practice.
Dave Seidel, second vice president/actuary, in Securian's financial services business unit, stated that the company's client research looked at best practices in institutions with successful debt protection programs. "We analyzed actual purchase behavior and noted the common themes in successful program," he said. "What we found is that consumers are focusing on core protection in the form of death, disability and unemployment protection, and will buy if the monthly cost is affordable."
He added that debt protection is flexible in the types of loans and life events that can be protected, how it can be priced and the ways it can be marketed (e.g., point-of-sale by the loan officer and direct response after loan closing). Another aspect of its flexibility is that is more easily standardized from state to state because it is not an insurance product and so is not subject to different regulations in each state.
John Gibbons, national sales consultant, Securian Financial Group noted, "We were one of the first to market with debt protection programs for consumer loans, and we continue to innovate. We possess a deep understanding of this business and make it a priority to focus on the business of our clients--lending. The flexibility of debt protection truly presents the best framework for protecting today's varied loan types."
Securian's debt protection programs can be customized by individual financial institutions for their respective borrowers. Online servicing of financial institutions' debt protection borrowers is available and Allied Solutions, a subsidiary of Securian, offers help with training, tracking and marketing services. The new line-up includes seven turn-key products, designed to fit each loan type's distinct characteristics: EquitySafe Debt Protection for home equity loans; HomeSafe Debt Protection for mortgage loans; VentureSafe Debt Protection for commercial and agricultural loans; ConsumerSafe Debt Protection for consumer loans; EverSafe Debt Protection for all personal loan types; CreditSafe Debt Protection for credit card accounts; and AutoSafe Debt Protection for direct and indirect auto loans.
In addition to the new turn-key programs, Securian continues to offer customized debt protection products to meet the unique business needs of financial institutions.
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