Credit Union Perks: Free Life Insurance Offer?

Credit unions are known to offer their customers free accidental death and dismemberment insurance. This insurance can pay a cash benefit for loss of life or specific body parts like hands, feet, eyes, thumbs, speech, or hearing as a result of an accident. While this insurance is offered for free, credit unions often encourage customers to upgrade to a larger coverage plan for a small monthly fee. It is important to note that this insurance is not a substitute for traditional life insurance, which provides more comprehensive protection.

Accidental death and dismemberment insurance

Accidental Death and Dismemberment (AD&D) insurance is a type of insurance policy that pays a benefit upon the accidental death of the insured or upon the loss of a limb due to an accident. It is usually added as a rider to a life insurance policy but can also be purchased as standalone coverage.

AD&D insurance is supplemental life insurance and not an acceptable substitute for a full life insurance policy. It is limited and generally covers unlikely events. It does not pay out if the insured died due to natural causes, such as cancer or heart disease.

AD&D insurance pays benefits in the case of a person's accidental death or dismemberment: the loss or loss of use of body parts or functions. Most AD&D policies pay a percentage for the loss of a limb, partial or permanent paralysis, or the loss of use of specific body parts, such as the loss of sight, hearing, or speech.

The benefits of AD&D insurance include:

• Financial assistance: An accidental death impacts the surviving loved ones emotionally and financially, as they must deal with a sudden loss of income. The death benefit from an AD&D policy can add peace of mind by lessening that burden.
• Supplements lost income: The loss of income will carry forward, so AD&D policies provide funds in addition to the death benefit offered through traditional life insurance.
• Lower premiums: Because coverage is limited to certain events causing accidental death or loss of limb, premiums are relatively inexpensive.
• No medical exam: Most insurance companies do not require a medical exam to obtain AD&D coverage.

The disadvantages of AD&D insurance include:

• Some coverage limitations: It is important to read the fine print to understand what qualifies as accidental death and dismemberment.
• Loss of coverage when changing jobs: If you get AD&D insurance through your employer, you may lose coverage if you change jobs.
• False sense of security: Having AD&D may give policyholders a false sense of security if they include the face amount in their cumulative life insurance totals during planning.

TruStage Life Insurance

TruStage™ offers a range of insurance products, including life insurance, to help meet diverse needs. Their whole life insurance policy provides permanent coverage with no expiration date. This means that your family will receive a cash benefit if something happens to you. With TruStage™, you can lock in a rate upfront that will never increase, even with age or health concerns. As long as the premiums are paid, your coverage cannot be canceled.

One of the benefits of TruStage™ life insurance is its ease of application. You can receive a quote online and apply for coverage from your smartphone, receiving an instant decision. Your policy becomes active 30 days after approval, as soon as your first payment is received. TruStage™ also offers a full refund within 30 days of your coverage start date if you are not completely satisfied.

TruStage™ works with you to select a policy that fits your budget, providing ongoing support and flexibility. They have close relationships with over 3,200 credit unions across the country, and their members trust them to provide personalized coverage within a monthly budget. Their insurance is underwritten by CMFG Life Insurance Company, which has consistently been rated 'A' (Excellent) for financial stability by AM Best.

In addition to whole life insurance, TruStage™ also offers accidental death and dismemberment (AD&D) insurance. This type of insurance provides a cash benefit in the event of an accidental death or specific permanent injuries caused by an accident. For example, members of the U.S. Postal Service Federal Credit Union are entitled to $2,000 of no-cost TruStage® AD&D Insurance, which can be claimed through their website or a toll-free phone number.

Term life insurance

While credit unions may offer free accidental death and dismemberment coverage to customers, term life insurance is available at an additional cost. Term life insurance is a type of life insurance that offers coverage for a fixed amount of time. This means that as long as the policy is active and premiums are paid, your family is covered. Term life insurance is a more affordable option for those seeking life insurance, as it allows the policyholder to choose the amount and duration of coverage. This type of insurance is ideal for those with big responsibilities and a growing family, as it provides a high coverage amount with affordable payments.

One example of a credit union offering term life insurance is Alliant Credit Union, which provides up to $250,000 of TruStage™ Term Life Insurance at monthly rates designed to fit the policyholder's budget. This coverage is underwritten by CMFG Life Insurance Company and is exclusively available to credit union members. It is important to note that the insurance offered is not a deposit and is not federally insured or guaranteed by the credit union.

In summary, term life insurance provides financial stability and peace of mind for individuals and their loved ones. It is a cost-effective way to ensure that those who depend on the policyholder for regular income will be financially protected in the event of their death. By choosing term life insurance, individuals can ensure they have the right level of protection that fits within their budget.

Whole life insurance

Credit unions often offer free accidental death and dismemberment (AD&D) insurance to their customers. This type of insurance provides a cash benefit in the event of an accidental death or specific permanent injuries, such as the loss of a hand, foot, eye, thumb, speech, or hearing. While this can be a nice supplement to life insurance, it is important to understand that your chances of making a claim are relatively slim.

One example of a credit union that offers free AD&D insurance is the U.S. Postal Service Federal Credit Union, which provides its members with $2000 of no-cost TruStage® Accidental Death and Dismemberment Insurance. This can be easily activated by the member with no health questions or medical exams required.

In addition to AD&D insurance, some credit unions also offer whole life insurance policies to their members. Whole life insurance, also known as "permanent life," offers lifelong protection and can be customized to address unique financial goals, such as transferring assets and charitable giving. It is one of the most well-known types of life insurance and provides benefits such as wealth transfer, charitable giving, and maintaining the same standard of living for your family.

Credit unions that offer whole life insurance include Navy Federal Credit Union and Alliant Credit Union, which both provide TruStage™ Life Insurance Plans with various options in whole and term life policies. These plans are designed to be affordable and accessible, with no medical exam required and adjustable quoting tools to fit members' budgets.

By offering life insurance, credit unions can help protect their members and their loved ones, providing peace of mind and financial security.

Insurance protection as part of a financial plan

Insurance is an important part of a financial plan as it helps to protect your finances and your family in the case of unforeseen events. It is a safety net that can help you to achieve financial security and peace of mind.

When creating a financial plan, it is important to consider the risks that could impact your goals. Insurance can help to minimise these risks and keep you on track. For example, life insurance can provide financial protection for your loved ones if you pass away, helping to pay off debts, fund children's education, and maintain their standard of living. Health insurance, meanwhile, can protect you from the financial burden of unexpected medical bills.

Different types of insurance suit different needs. For example, if you are a high-income earner, a cash value life insurance policy can provide tax benefits and help with income tax reduction. Term life insurance, on the other hand, is a good option for fixed-term coverage needs, such as paying off a mortgage or funding a child's education. Disability insurance can replace lost income if you are unable to work for an extended period, and auto insurance can protect you from the financial burden of an expensive accident.

When considering insurance as part of your financial plan, it is important to thoroughly analyse existing policies and coverage, compare premiums and benefits, and choose insurance that suits your individual needs and goals.

Frequently asked questions