Offering small, no-cost policies (often they're life or accidental death and dismemberment policies) is a popular method of seeding insurance relationships with members. William Bushlack, who is EVP at the Greenwood Village, Colo.-based insurance consulting company Gateway Services Group, said the effort serves two goals: Building goodwill with members and generating income through cross-sales.

"You typically offer $1,000 free, and then the member gets to have the opportunity to buy more," he explained. "Most credit unions like the whole vibe of providing something free to membership."

The move can generate new business though, according to TruStage Vice President Corrin Maier.

"A lot of people do take out the no-cost policy and additional coverage at the same time, but about 25% of our business comes from people who enrolled in that no-cost policy at one point and then now are coming back to say, 'I can now afford some additional coverage and I now want to buy some,'" she noted.

The Raleigh, N.C.-based State Employees' Credit Union is another recent example of how the idea can work. The credit union, which has $38 billion in assets and about 2.3 million members, has offered $1,000 of free group term life insurance to certain members since 2014. Earlier this year, though, it targeted families via a promotion of a special open-enrollment window during which members could raise their coverage to $10,000 for $18 a year if they had certain accounts for their kids and teens.

Of the 10,493 members who opened the accounts for kids and teens during the three-month enrollment period, 46% bought the additional coverage, the credit union said. More than 2,500 existing members with kid or teen accounts increased their coverage to $10,000.

"We wanted to use that as an opportunity to educate the parents about the need for life insurance and also segue into the conversation about individual life insurance," Stacey Waddell, SVP of member insurance services at SECU, said. "So, this open enrollment was an opportunity for us to relaunch our efforts to have those conversations."

2.  Tap into some new lines and/or refresh the existing ones.

Operating a modern insurance business means offering modern policies to people with modern lives. That's why more credit unions are rethinking their product lines and going beyond traditional offerings in auto insurance, for example, by adding things such as car repair coverage and usage-based, pay-by-the-mile policies to the menu. It isn't just a market-differentiation tactic or an effort to be trendy; cutting-edge policies can boost margins by diversifying away from traditional products that might carry thin margins, require huge volume in order to make money and face fierce competition, Bushlack said.

"Credit unions think that P&C [property and casualty], especially auto coverage, is a golden goose. It's not," he explained. "You're competing with some of the best brands in the world – State Farm, Farmers, Allstate. And there are many local companies in certain regions that just are very, very competitive … we've got credit unions that are making 1,500 to 1,600 auto loans a month and can't make P&C work."

But don't overcorrect and let the shiny new objects tarnish truly productive insurance lines, Bushlack added.

"Credit unions underestimate the value of debt protection, gap and extended-warranty coverage," he warned. Roadside assistance is another example, he said. Many credit unions may not get a lot of member participation in those products and so they disregard the value to the member, even though the credit unions know they can deliver those products to members cheaper and more easily than auto dealers and big banks can, he noted.

"We've got credit unions that earn in the millions of dollars on these products," he said. "Those really have been around the longest, they've got the most traction and everybody offers them in some form or fashion – some better than others."

3.  Make insurance procrastination-proof.

Credit unions that want to build their insurance businesses are investing in technology that cuts down application time – or they're investing in partners that are investing in that technology.

Either way, faster onboarding can help conquer the procrastination barrier that often stands between members and insurance, Maier said. At TruStage, new systems that can transfer information from auto loan applications to auto insurance applications have shrunk the time it takes to generate a provisional insurance quote down to minutes, giving members the extra push they may need to get started, she explained. Response rates have been about two-and-a-half times higher thanks to the technology change, she said.

"They're hitting that member when they need it the most," she said. "We can give them a provisional quote that gives them a gut check to say, 'Wow, this stuff looks like it could save me more money or provide me more value than what I have today.'"

4.  Get rid of those jarring pitches.

Credit unions can damage their insurance efforts if they're approaching members at the wrong place and time.

Many of those conversations do well inside of an investment or advisory context, Waddell noted.

"It doesn't necessarily need to surround estate planning. It could be surrounding the purchase of a home and a mortgage that's being taken out at the credit union. But they are very much conversations that are based on life stages," she said.

"Nobody wants to talk about life insurance," SECU EVP of Financial Advisory Services Bill Umphlett added. "If you bring it up cold off the shelf, good luck with that. But if you talk about maybe the family's need for insurance as you're opening a new account and explaining the $1,000 free life [policy], that's an easier approach for our frontline employees. They're much more comfortable with that. They're not going to talk to somebody about insurance just out of the blue."