Credit Union doubling funds - how?

yesap

This might be a silly question but somebody just told me today that the credit union will double any savings that were accumulated by age 55 when any member dies irrespective of age up to €20k or so. Called insurance but can't be insurance as everybody dies??

Have I got this totally wrong, if it is he case then where does the money come from to double it up?? Just can't understand the finance behind it..

silent_spark

I've never heard of that, but I have heard that if you died with an outstanding loan it would be cleared - this was in a branch in 2009, not sure if it still applies.

Spocker

It's called LP/LS or "Loan Protection/Life Savings" Insurance

http://www.mullingarcu.ie/loan-protection/

Yes, everyone dies, but not everyone is a member of a credit union. Your savings/withdrawals history has an affect on the amount, as does your age at time of death.

http://www.creditunion.ie/whatweoffer/insurance/lifesavings/

silent_spark

Spocker wrote: »

It's called LP/LS or "Loan Protection/Life Savings" Insurance

http://www.mullingarcu.ie/loan-protection/

Yes, everyone dies, but not everyone is a member of a credit union. Your savings/withdrawals history has an affect on the amount, as does your age at time of death.

http://www.creditunion.ie/whatweoffer/insurance/lifesavings/

That's really interesting. It says the payment will be 'in proportion' to savings, what proportion I wonder?

yesap

Spocker wrote: »

It's called LP/LS or "Loan Protection/Life Savings" Insurance

http://www.mullingarcu.ie/loan-protection/

Yes, everyone dies, but not everyone is a member of a credit union. Your savings/withdrawals history has an affect on the amount, as does your age at time of death.

http://www.creditunion.ie/whatweoffer/insurance/lifesavings/

That's the bit I can't understand though, yes everyone dies but not everyone is a member of the credit union. But by the rules everyone that dies as part of a credit union is a member so how is it possibly funded?? From what I have been told everyone that dies is entitled, where does the money come from?

notharrypotter

yesap wrote: »

From what I have been told everyone that dies is entitled, where does the money come from?

The CU takes out an insurance policy on it's members.

The rules usually relate to outstanding balance of a loan only.

There is often an upper limit on what is covered.

That way the members savings (shares) are protected.

You should contact your CU and clarify the details of the scheme they're offering.
Each CU can have slightly different rules depending of the policy wording.

CUright

Credit Unions affiliated to ILCU pay ECCU Assurance Co and ECCU pay out on the death of a member. Simples! Tsch!