Rest assured, the risks are minimal, if at all. I consulted with Patrick Leary, vice president of distribution research at research organization LIMRA International, about how life insurance compares to other products offered through credit unions.

Per Patrick, “From the perspective of the financial institution, I think the DOL environment should actually have an indirect, positive impact on the sale of life insurance. Many feel (or hope) that the new fiduciary rule will help move licensed agents who are employed by these institutions to deploy more of a 'planning' mentality, which should include discussions about life insurance.”

Traditional term and whole life insurance products purchased by “core” credit union members (typically middle income) are generally not affected by the DOL rule because they are not funded by tax-deferred, or “qualified,” retirement money.

While there are exceptions, including situations where required minimum distributions (RMDs) from retirement plans are used to fund life insurance costs, life insurance products are an excellent choice for credit unions that want to offer a valuable product and earn noninterest fee income.

In a survey conducted by LIMRA International in 2016, investment program managers of financial institutions overwhelmingly reported that they see life insurance as benefiting from the requirements of the DOL rule.

That satisfies the question of whether life insurance is a “safer” product to offer in the post-fiduciary rule environment. However, the next logical question is whether credit union members actually need life insurance.

According to research from LIMRA International on middle income consumers' financial health, they unequivocally do! If the primary wage-earner in the household were to pass away, nearly two-thirds of middle income households would have “immediate” trouble paying everyday expenses or only have enough money to pay everyday living expenses for “several months.”

With that in mind, it's apparent that offering life insurance to members of credit unions is not only important, but, in most cases, absolutely critical because the majority need more protection.

Credit union investment and insurance program managers can get started on a comprehensive life insurance program by contacting a life insurer that has significant experience helping institutions build such programs. Having an experienced team at a life insurance company can help you identify appropriate products for your members and build effective distribution points through which to offer these products.

Craig Simms is SVP/CMO for Vantis Life Insurance Company. He can be reached at 860-298-6005 or [email protected].