CUNA Mutual To Discontinue Life Savings Insurance Product
By Karen Rivedal, The Wisconsin State Journal | |
McClatchy-Tribune Information Services |
The policies, designed to pay a death benefit based on the balance of a member's credit union savings account, were developed as a Depression-era incentive to encourage thrift and savings at credit unions. As a benefit for members, credit unions pay the monthly premiums on the policies for members who want one.
But the product has fallen out of favor in recent years,
"It was a good product for the time, but times have changed," he said. "We need to help credit unions deliver member protection that is relevant today."
Still, as of this week, about 1,200 credit unions are offering the product to at least some of their members,
Tschudy noted that the product functions as a group term life insurance program, not a whole life policy that accrues cash value and features guaranteed continued coverage until death. Instead, the expiring life savings product had to be renewed every month and could be canceled with 30 days notice by either side -- the credit union or the insurance carrier,
Over the years, credit unions set the coverage limits and determined the required minimum savings balance that members needed to keep the policy in force.
But generally, Tschudy said, members had to maintain
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