Important FAQs about free credit union insurance
As the British public's trust of banks continues to wane, more and more people are taking out accounts with credit unions. One of the most trusted types of institution in the UK today, credit unions not only offer current accounts, savings accounts and loans, but they even make sure each of their members is insured with free credit union insurance.
Before opening an account with a credit union and becoming eligible for free insurance though, here are a few FAQs you might want to know the answers to.
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FAQs every Credit Union member should know the answers to
What is a credit union? - Although millions of people have credit union accounts, it's amazing how many don't know what a credit union is. A credit union is a financial co-operative that's actually owned by its members. That means, if you open an account with one, you become a part-owner of the institution and even have voting rights.
Credit unions are founded to promote saving and to provide low-cost financial services for the community they're in. That's why people trust them, as they get similar services to a bank at a much lower cost, and with an institution that has their members' best interests at heart.
How do you join a credit union? - Quite easily. Complete an application form and take it with your ID to a branch of the credit union you wish to join. You'll have to give them a deposit to open an account, but it can be as little as £5.
Credit unions also like their members to save, so a regular weekly or monthly deposit in your account is encouraged.
What types of free insurance do credit unions provide? - This is one of the big advantages of having an account with a credit union. Unlike with a bank, where you have to pay for insurance, a credit union provides both life insurance and loan protection insurance - and they're both completely free.
How does a member get credit union insurance? - Most credit unions belong to a Death Benefits Trust or provide life insurance themselves. When you open an account you're automatically insured and, if you should die, your beneficiary will receive the amount of money in your account plus a payout from the credit union as insurance on your life. This amount is usually anything up to £10,000,
As for loan protection insurance, that's an automatic service you get if you take out a loan through the credit union. Should you get sick, be unable to work, lose your job, or die while you're still paying off a loan, your loan repayments will be made so your family isn't legally liable for them.
Does Credit Union insurance cover every situation?
No. There are some exclusions you need to know about.
Most credit unions in the UK only provide credit union insurance after you've been a member for six months. Before that, you're ineligible.
Some credit unions also do not cover death if it happens as a result of war, suicide, a terrorist act, or from HIV/AIDS. You should ask at your credit union to find out if and what their insurance excludes.