One of the attractions of a loan with the Credit Union is free Loan Protection Insurance. It repays the balance the loan in the event of a member’s death. Cover is available for those in good health or carrying out normal occupational duties at the time the loan is granted.
What is Loan Protection Insurance?
In Naas Credit Union, the outstanding loan balances of eligible members are automatically insured at no direct cost to the member. This means the loan debt will be wiped clean in the event of the member’s death. Members can take out a credit union loan in the full confidence that their dependents will not have to pay the loan off on death or (under most contracts) total and permanent disability for any occupation. Banks and other financial institutions charge a separate insurance premium on top of loan repayments for this service.
Under the basic policy, insurance cover ceases on the member’s 70th birthday. However, Naas Credit Union specially extends this cover for members to cover until a member reaches their 85th Birthday. Members over 16 years of age who were not eligible for insurance cover (because they were in ill health at the time a loan was granted to them) can be insured up to an amount of €8,000.
Cover will not apply until the loan is paid to the member and an actual indebtedness created, at which time for each loan, the conditions for eligibility shall apply. To be insured members must meet certain insurance company requirements. Loan Protection Insurance is payable on the death of the eligible member, subject to policy terms and conditions.
Disability cover applies to a member’s loan and clears the balance in full in the event of permanent disability. Disability is defined as a certified condition of health that renders the member totally and permanently disabled to carry out any occupation. Claims under this heading must be accompanied by a private medical Attendant’s report (PMAR) form. The maximum cover is €40,000 and cover ceases at 60 years of age.
Life Savings Insurance is the life insurance cover provided to Naas Credit Union members as member benefit and as an incentive to save regularly.
The amount of insurance benefit to which a member is entitled is in proportion to the amount of savings the member has, and depends on the member’s age at date of lodgement.
Subject to a maximum benefit of €7,700, every €1 saved before the age of 55 provides €1 of insurance. When over the age of 55 each €1 saved with the credit union provides the following benefit:
Once earned, insurance remains in force as long as the savings are left in the credit union. Withdrawals may affect the amount of insurance payable in the event of a claim.
It is important to note that withdrawals from shares have a negative impact on Life Savings Insurance as the claim is based on the lowest share balance after the age of 55. Amounts lodged after the age of 70 are not insured however withdrawals do affect the benefit due.
A member is eligible for the insurance cover carried by the credit union if when they begin saving they are:
CU Cash Accounts
Savings held in CU Cash accounts also attract the benefit of LS insurance. The benefits are combined with a members savings in their standard share account for the purpose of the claim.
Where members hold a Joint account the LP and LS insurances still apply. Naas Credit Union pays an additional premium to cover both parties in a joint account. The insurance applies on either member’s lives and benefits are claimed and covered per a standard single account.