The Credit Union Opportunity In Member Insurance

Today, 40% fewer credit unions offer member insurance than in 2011. That's an opportunity for credit unions to offer members a dependable product and peace of mind.


Member insurance offerings at U.S. credit unions tend to fall into three categories.






For all U.S. credit unions | Data as of 03.31.15
© Callahan & Associates |


Source: Peer-to-Peer Analytics by Callahan & Associates

Fewer than 25% of U.S. credit unions offer member insurance today; that's a 46% decrease from three years ago. Accordingly, pay outs are trending down, too. Total member insurance pay outs at the end of first quarter 2015 are half of where they were one year ago. Credit unions are either terminating these costly programs or turning them into sources of non-interest income.


For all U.S. credit unions | Data as of 03.31.15
© Callahan & Associates |

  State Percentage Of Credit Unions Offering Member Insurance
1 KS 55.4%
2 ND 55.3%
3 AR 48.3%
4 NM 47.8%
5 AL 47.5

Source: Peer-to-Peer Analytics by Callahan & Associates

According to first quarter data available in Callahan's FirstLook program, more credit unions as a percentage of total credit unions in central states offer member insurance. Kansas leads the nation with 55.4% of its credit unions offering members insurance versus 23.4% for all credit unions in the United States.


June 1, 2015


  • We terminated credit union paid life savings and credit life 25 years ago. We did that because the coverage on life savings was a maximum of $2,000. That did not offer members much benefit. The cost to the credit union was high and many members did not know about the coverage and many did not care. When we terminated it very few members noticed. Credit Life was a different story. The reason for terminating it as a credit union paid benefit was because it was also expensive and it benefited only a few members and it offered a limited amount of coverage. It usually did not pay off the member's loan. We replaced it with member paid credit life which offered much higher coverage amounts. Members who wanted and needed that coverage could pay for it. In general we advised members who wanted life insurance to buy a term life product that offered them a low cost way to protect their family in the event of death. For most young families disability is a more common problem and many do not have disability insurance adequate to support them in the event the bread winner is disabled. We have a ten point plan that we use to advise members on how to improve their financial well being. We always advise members to insure their risk of death, disability, ill-health and to insure their primary assets (car and home). Credit union life savings and credit life were important products when debts were smaller. The debt dies with the member was a key benefit of credit union membership. In order to have that kind of protection the credit union member is far better protected with standard term life and disability policies that provide benefits that are adequate to make sure that the member and his family are protected.
    Henry Wirz