Credit union free life insurance

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First thread started here after many years learning from others!  I wonder if I should have titled this “Credit union life insurance for fun and profit.” Anyway…I’ve signed up for various credit unions over the years (Alliant for an HSA; a local one to get my son an account; various others), and I’ll often get a solicitation for life insurance from them.  They offer “X amount at Y rate,” blah, blah, but they also offer $2000 of free life insurance.  I always sign up for that, but I like my other life insurance through MBA. Is there any value to signing up for many credit unions to get many offers for 2k life insurance at a time?  50 credit union sign ups would yield 100k of insurance this way, but having 50 open accounts may raise flags with Homeland Security and the IRS:  2 organizations I don’t want to annoy! Anyone put much thought into this?

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Years ago, most credit unions offered up to $2000.00 of life insurance based on deposit on account at time of death. My Dad joined any credit union that he could and kept at least $2000.00 in the account at all times.(about 7 in total). Some years after this, when he died, we learned many credit unions no longer did so. A few paid under a grandfather clause. One had passed a change in credit union policy the previous year and denied the claim as that credit union stopped it for ALL members. Proper notices were issued, but we failed to read them.
Bottom line = YMMV and keep up on policy changes.

Sounds incredibly high-maintenance.  I get these offers in the mail all the time - sometimes the free minimum is limited to 1K, sometimes 2K.  You'll not only have to sign up, but also to renew later in many cases to keep the free minimum in force.

Signing up may win you the prize of being being put on other marketing lists.  You'll have to keep paperwork for all of all the tiny policies you signed up for. And when you kick, your heir(s) will inherent a mess to deal with.

Aren't these free teaser policies almost always accidental death only? Actuarially worth only pennies per year.

Years ago ... NO.
The "free" accidental death $1000 or so were different policies which were offered with cash out of your pocket group priced additional protection.

SummerSoFar said:   Aren't these free teaser policies almost always accidental death only? Actuarially worth only pennies per year.
  Yes they almost all are now.

Huh. Hadn't realized they were accidental death only...I'll have to look at that! Great thoughts. I'm thinking the whole thing isn't worth the hassle, but I thought maybe there's something I'm stumbling into that could be valuable!

ChrisDarland said:   having 50 open accounts may raise flags with Homeland Security and the IRS:  2 organizations I don’t want to annoy!
 

Don't earn >= $10 interest in a year with any of those accounts and I don't think you'll have to worry about the IRS... unless you want to tell the IRS all about the accounts on your schedule B.  If the IRS had some magic tool to instantly find every account belonging to a person, I would have been levied long ago.  Dunno about homeland security.

Regarding the insurance, I have tons of CU accounts and I usually sign up for the silly insurance whenever it's offered.  I've never been asked to renew it, and much to my surprise, I don't get much junk mail.  (Only the nonstop junk mail that the CU itself sends out.)  What I've always wondered is: What happens when the same insurance company sends you an offer via two different credit unions and you sign both of them?

As others have mentioned, these credit union policies are usually AD&D policies, and this seems like a lot of work for $100k of life insurance - Your time is the most valuable/precious asset you have. You'd probably be better off (if you're still healthy) to take out a 10-35 year term policy, depending on your age.

Below are rates for a 40yr old male, $100k 10-35 Year Level Term, assuming the best Preferred Plus Non-Tobacco health class:

10yr - $97.24 per year
15yr - $106.95 per year
20yr - $129.00 per year
25yr - $178.99 per year
30yr - $207.99 per year
35yr - $275.00 per year



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