Credit Union-Paid Loan Protection Insurance

Credit Union-Paid Loan Protection Insurance provides insurance coverage on loans at no direct cost to your credit union members. Depending on the credit union’s loan protection insurance policy, the following coverage maximums must be established for determining eligibility:

• Maximum insurable age
• Maximum insurable amount for regular loans
• Maximum insurable amount for single payment loans
• Maximum repayment duration for regular loans
• Maximum repayment duration for single payment loans

Coverage limits for the maximum insurable age and the maximum insurable amount and duration for single payment loans are specified on the second page of the report rules of the Group Loan Protection Insurance Report 480. The 480 Report details information and provides a recap on the portion of the credit union's outstanding loans that are eligible for loan protection insurance.

Non-coverage Guidelines

A loan or a portion of a loan can be non covered based on the credit union’s coverage maximums as follows:

• Eligible loans for members who are over the credit union’s maximum age limit as specified by their insurance policy will be shown as a deduction on the 480 Report.
• A single payment loan can be non covered if the original loan amount or the repayment schedule in terms of months extends beyond the credit union’s maximums established for these loans. All loans which fall within this non-coverage criteria will be reported as a deduction.
• If the eligible loan(s) of a member exceed the maximum insurable amount, the excess will be reported as a deduction. Excess is determined based on the contract type:
• Standard Contract – Excess is recalculated each month based on the member’s current loan balance(s) at month-end.
• Variable Contact – Excess is calculated at the time the loan is granted or when the loan is refinanced. The excess is carried through the life of the loan or until the loan is refinanced. This excess appears in the Excess Amount Not Covered field on the Loans - Insurance tab.
• Eligible loans which have not been repaid within the maximum duration time limit will be reported as a deduction.