# Do all CUs have life insurance for their members?



## Time (29 Oct 2012)

Do all CUs have life insurance for their members? If a member dies does this policy pay out to the survivors?


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## Crugers (30 Oct 2012)

http://www.creditunion.ie/whatweoffer/insurance/#d.en.153


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## Slim (30 Oct 2012)

Time said:


> Do all CUs have life insurance for their members? If a member dies does this policy pay out to the survivors?


 
Most, if not all, CUs have a form of savings/loans insurance, called LP/LS. This insurance, usually, pays off the outstanding loan, makes a modest death benefit payment and may also increase the deceased's savings by up to 100%, subject to a maximum € level. I say 'may' because there are certain conditions and qualifications. One depends on the level of insurance the CU opts for, secondly, the savings insurance is graduated depending on the age of the member when they save the funds, i.e. up to age 55, 100% and decreasing thereafter. Also, age and health when taking out a loan is relevant

Payout is to the nominee(s), who may be the surviving spouse or may not. Each member is supposed to make a nomination on joining, which must be reviewed on marriage but does not have to be the spouse. If the total savings, including insurance, exceeds €23,500, it all goes into the estate. Up to that level is excluded from the extate and distributed according to the valid nomination.


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## Time (30 Oct 2012)

How long after the death of a member could this be claimed?


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## Slim (30 Oct 2012)

Time said:


> How long after the death of a member could this be claimed?


 
Straight away, you just need a death certificate and the credit union will do the rest. Remember though, the person who hands in the death cert may not be the person who is entitled to the proceeds and has no right to know who does!


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## Crugers (30 Oct 2012)

Insurance used to be satisfied with publication in newspapers but now appear to require death cert.
Payout could take a couple of weeks +/-.


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## Time (30 Oct 2012)

Could a claim be successfully made years later?


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## Crugers (30 Oct 2012)

Usual scenario is that once CU find out a member has died the wheels start turning and the claim is processed.
If a member died and CU was unaware then they couldn't/wouldn't process a claim.
Between the time of the members passing and when the CU finds out that a member had died - the CU would have continued to pay the insurance premium on whatever balance was in the account.
I would have thought that a claim could be submitted "late" and I would expect it to succeed as the premiums would have been paid and accepted.
But I suppose there is only one sure way to find out!


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## Time (30 Oct 2012)

The person is dead now over 9 years and no one from the CU has ever approached the parents.


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## Crugers (30 Oct 2012)

Has anyone approached the CU? That would be the usual process...

It is possible that the CU has processed the account and the insurance and paid out the sums due to the person nominated by the member. The nominee could be anyone, it is the members choice!


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## Slim (31 Oct 2012)

Time said:


> The person is dead now over 9 years and no one from the CU has ever approached the parents.


 
If the deceased was under 16, they would not have had a valid nomination. If the CU were unaware of the death, the account may be dormant. It may be a simple matter of notifying the CU. If there is no nomination, the savings may be paid out to the parent(s), depending on the value of the savings. If the deceased was over 16, a valid nomination may already have been dealt with as pointed out by Crugers. Only way to find out is to contact the CU.


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## Time (31 Oct 2012)

I will instruct my solicitor to contact the CU.


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## boardnashea (2 Nov 2012)

Slim said:


> . If the total savings, including insurance, exceeds €23,500, it all goes into the estate. Up to that level is excluded from the extate and distributed according to the valid nomination.


 My understanding is that the first €23,000 is paid out according to the nomination and the remaining balance is paid into the estate. 

The advantage of the Nomination process being outside the estate is that this part can be processed relatively quickly and is not delayed by probate.


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## Slim (5 Nov 2012)

boardnashea said:


> My understanding is that the first €23,000 is paid out according to the nomination and the remaining balance is paid into the estate.


You are correct. My apologies!


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