Loan Protection Insurance is Group Policy Insurance taken out by Core Credit Union which provides insurance cover on the unpaid loan balances of its eligible borrowing Members.
From 1st December 2020, the following changes are being introduced to our Loan Protection Insurance:
- You no longer need to complete a detailed Declaration of Health, instead this is replaced with a Pre-Existing Condition Limitation condition, which remains in place for the first six months from the loan date. This means the loan application process is faster, easier, and smoother, and Members with pre-existing illnesses are covered when the 6-month waiting period has expired.
Loan Protection Insurance is insurance to support eligible Members who have loans, it is repayable to the Credit Union upon a Member’s death, and is subject to terms and conditions.
Many people nowadays choose to take out insurance to cover outstanding loans in case of death. In Core Credit Union the loan balances of all eligible Members are automatically covered, at no direct cost to the Member. This means that Members can borrow in the full confidence that their dependents will not be obliged to repay the outstanding loan balance in the event of their death.
For loans issued on or after December 1st 2020, we have extended cover under the Gap Loan Protection feature of our Loan Protection Insurance, to Members who will have loans after the age of 70, and Members who take out a Gap Loan agreement.
Gap Loan Protection (GLP)
Gap Loan Protection is a feature of our Loan Protection program. It provides insurance for the gap between the Member’s loan balance and their savings. The Member’s savings are then used to offset the remaining balance on the loan. Life Benefit Insurance is calculated on the Member’s savings at date of death and the Life Benefit Insurance is paid to the Member’s estate. Members older than 70 can borrow up to three times the value of their shares.
Pre-Existing Condition Limitations
Pre-Existing Condition Limitation applies to this insurance, which means that cover is not provided if a Member dies from a pre-existing medical condition, within 6 months of taking out a loan. Although there is no medical assessment, Members are required to declare that they are aware that no benefit is payable if death occurs from a pre-existing condition/illness in the 6 months following the date of the loan.
Please be aware that if you have, during the last 6 months, received medical treatment, advice or consultation for an illness, it may affect the insurance benefits payable under the terms of the Credit Union’s Loan Protection Insurance policy. If you die within 6 months of the date of this loan due to a pre-existing medical condition, your loan may not be covered by the Credit Union’s policy, in which case your savings, estate, plus any insurance benefit due on these savings, may then be used as security against the value of your outstanding loan.