MADISON, Wis.–There’s an interesting economic indicator in some recent consumer research conducted by TruStage that is simultaneously also an indicator of an opportunity for many credit unions—many more people are worried about being able to make their loan payments.
The company’s 2025 Consumer Lending Preference Survey found 80% of consumers were interested in payment protection, a big jump from the 60% who expressed interest in the same product in 2023.
“We really think it signals a continued tightening of the middle market consumer’s budget overall,” said Corrin Maier, vice president, lending business segment with TruStage.
With consumer household debt increasing and more people living paycheck to paycheck, loan payments may be predictable, but other events are not, Maier reminded, and many consumers “cannot sustain those unexpected events.”
Yet the market conditions and consumer preferences that would seem to indicate a prime sales opportunity haven’t necessarily been translating into more members buying payment protection from their credit unions, Maier said, noting TruStage has introduced a number of message and process updates aimed at boosting buy-in.
The new strategy follows some research that offered insights into consumer behavior and misunderstandings, beginning with a lack of awareness.
A Lesson from COVID
“I think about it a little bit like we don’t go buy an airline ticket anymore post-COVID and not be expected to be offered travel insurance,” Maier told the CU Daily. “I’d like to get us to a spot where payment protection is in the same boat; that when you take out a recurring payment you have that option to get that peace of mind for payment protection.”
To address awareness, offer that peace of mind, and to get more members to add payment protection, Maier said the company has been “really focused on how do we make the digital experience accessible.”
“These products have been offered for the last 90 years primarily in a face-to-face channel,” Maier continued. “We know about 50% of credit unions loans are starting online right now, so how do we make sure we have that same kind of accessibility with a digital first, multi-channel experience?”
Like many organizations, TruStage has sought to answer that question, at least in part, by turning to AI. Maier said the objective hasn’t been to build a separate digital experience but to integrate product/education and opportunity to buy into the digital experiences credit unions offer, while making all of it feel seamless.
In addition to the AI, as noted above TruStage does plenty of old-fashioned consumer research, and it has gained insights along the way on what words, education and even placement of an offer work best when it comes to payment protection.
The Two Questions
“As we talked to consumers the two things they want to look at is, what is it and how much does it cost?” Maier explained, adding the company does extensive testing both pre- and post-deployment of any technology. “But in addition to the kind of words and phrases you use to help them understand, we also think about multiple touchpoints and how do you help the consumer go from aware to interested to confidence to buy?”
TruStage has learned that most effective is providing a “simple couple of sentences” that describe life coverage, disability coverage, unemployment coverage and more, according to Maier, with drop-down menus available for deeper explanations.
Moreover, Maier said TruStage has also done testing in the digital loan application related to how to best trigger a follow up e-mail that provides the member with FAQ’s and some testimonials. Among the learnings: information is best conveyed in “bite-size chunks.”
The User Experience
When it comes to the digital experience for the user, Maier said all of the testing has discovered that where the offer is placed in the process has a direct bearing on the take-up rate. Initially, the process included information on payment protection on every page of the application, which resulted in about 8% of borrowers opting in to payment protection.
“But when we started testing where in the flow to put it, that was the big unlock,” Maier stated. “What we found is we let you get there and complete the application–but before you review what you entered and sign it–when we offer payment protection there we are consistently getting like 40% of consumers engaging and saying, ‘Yes, I’m interested.’ That was a major learning, a major unlock. Where you place the offering matters a lot.”
A Perception of Deception
That wasn’t the only discovery.
Maier observed that in the traditional face-to-face meeting in a credit union branch, when a loan officer has a conversation with a member he or she can “very seamlessly” talk about payment protection and adjust a loan term if needed to keep the payment at a level with which the member is comfortable.
“That’s a very natural conversation for a loan officer,” Maier said. “When we try to do that digitally and just say, ‘Hey it’s part of your loan payment, we’re going to extend your term,’ consumers thought we were being super-deceptive. That was a ‘Whoa, wait a minute, what’s going on there?’ It was actually a great learning.”
What it learned was that in the online application process the credit union/TruStage must get the member to do the internal reasoning for themselves on whether they want loan protection, and then make their own decision on whether they wish to extend the term or increase the payment.
What Testing Also Found
After testing several models, it found cost-per-month is the most natural way to present, as consumers are already accustomed to monthly payments.
Maier noted that similarly, every credit union must also decide for itself if it wants to offer payment protection along with its loan program. She said TruStage has built out digital integrations with 14 different companies across the CU ecosystem, covering all the costs itself.
“My personal preference is the credit union should have to do nothing as far as investing their technology resources to really get that activated,” Maier said. “In some cases, with the technology providers, it’s more of an opt-out. It’s ‘This enhancement is coming, let us know if you want to opt out.’ In other cases, it’s kind of a flip of the switch for the credit union to turn it on.”
‘Great News’
“The great news is as we’ve made it really seamless for the consumer and also for the loan officer,” she said. “If the consumer is filling out a loan application online they…can pick out if they want life, disability, unemployment. With our new purchase solution rolling out in the second-half of the year, that flows seamlessly into the LOS so the loan officer can see what they picked, which will then flow seamlessly into kind of a DocuSign and digital journey, as well.”
Among the integrations: TruStage recently announced a partnership with WithCluth, also often referred to as Clutch, a fintech that offers digital loan and deposit origination solutions, as the CU Daily reported here. The organizations partnered on an offering called “Protection Products: Plan Selection.”
WithClutch has backing from TruStage Ventures, the venture capital arm of TruStage.
In addition to WithClutch, TruStage will have three other companies integrated into its solution by year-end: MeridianLink, Blend and Temenos.
Usage & Demand
Maier said TruStage currently offers protection on 9.5-million credit union loans. On average, one-in-five borrowers ends up using that protection.
“The goal is really how do you help mitigate that unexpected expense when it comes up so that we can say, ‘Hey, how do we keep you in your car? How do we keep you having a strong credit score, etc.?’”
‘I Just Can’t Do It Anymore’
In addition to the quantitative research showing the surge in interest in payment protection in just two years, Maier shared she has heard anecdotes that support what the research has found, as well.
One credit union told her one of the most searched terms on its website was “skip-a-pay.” Another CU leader related how they’ve never seen such a high volume of voluntary repossessions, with members coming in with their cars and saying, “I just can’t do it anymore, please take it back’.”
“I think there is an ability for credit unions to fully differentiate right now,” Maier said. “We can make more consumers aware and the reality is most banks don’t offer these products, so it’s also a way to differentiate from the competition, to say, ‘Hey I can provide you protection, I can give you that peace of mind.’ It’s not just the low interest rates but the notion that you can have a protected loan, you can have that financial stability in an easy digital experience.”
Three Keys
For any credit union not offering payment protection, Maier said there are three things to consider:
- “One is having more products per member and you are helping meet more of the financial needs of your consumers.”
- “Second, credit unions do earn interest income on this, so as interest rates tighten or evolve they continue to make good margins on their loans.”
- “Third, we do see delinquencies reduced when these products are on the loan. Typically, we’ll see about a 20% decrease in delinquencies, so it helps with not only overall economic position of your consumer but also the health of your balance sheet.”
What’s Next?
TruStage, the former CUNA Mutual, turns 90 this year and payment protection offerings were one of its original offerings. So, what’s next?
Maier said the company is exploring additional touchpoints with the consumer beyond the loan application. For instance, if the member applied but the loan hasn’t been funded, perhaps sending a text or email to raise awareness.
“We’re also looking at how do we continue to make these products accessible to consumers, as well,” Maier said. “An example would be that there’s a lower take-up on things like mortgages or where those balances are really, really high, because the product becomes less affordable. So, we’re doing some product innovation that we’ll bring to market early next year that’s really focused more on how do you think about your loan payment rather than the really big loan balance, and can we make that product more affordable? We’re hoping to tackle some of those loan types as we get into 2026.”
