Credit unions are known for providing several programs to assist their members in reaching their financial goals. These include many types of accounts like shares, savings, checking, and investment accounts. The interest rates paid on these accounts tend to be higher, while the rates on their loan products are generally lower.
But did you know that you can also get insurance policies through your local credit union? Keep reading to learn more about finding the right insurance through your credit union.
Hallmarks of Credit Unions That Offer Insurance
The provision of insurance is not prevalent across credit unions. However, there are few things that you should look for in credit unions that offer insurance:
Partnerships With Reputable Insurance Companies
Credit unions that offer insurance often partner with insurance companies to do so. Although some credit unions may launch their in-house agencies, they are more likely to go the partnership route. However, you also need to consider the reputation of the company that’s offering the insurance. And yes, you should still shop around for the best rates!
Auto and Home Insurance Policies are More Popular
The good news is that auto and home insurance policies are often on offer at your local credit union. Other policies that may be on offer include accidental death and disability insurance. So you’ll be able to plan for the unexpected events while also safeguarding your family’s wellbeing.
You May Be Contacted by Your Local Credit Union
While it’s good to go searching for deals on your various insurance policies, you may not have to. Your local credit union will likely reach out to you to see what your insurance needs are. But, you should still do your due diligence to find the best policies for you and your family.
Why You Should Buy Insurance from a Credit Union
Credit unions like Riegelwood Federal Credit Union are trustworthy institutions that put their members’ interests first. You would have also built a long relationship with your credit union, and used many of their products. Also, they would know a lot about you and your family’s needs. So your local credit union is probably your best choice when you choose to purchase insurance.
The Competitiveness of Credit Unions
It’s easy to join a credit union. Reach out to your local credit union to get a list of their requirements to join. These financial institutions also offer several advantages such as:
- Better interest rates on savings and investment vehicles.
- It may be cheaper to borrow from a credit union.
- Lower maintenance fees on accounts.
- Personalized service and an emphasis on building a lasting relationship with each customer.
Is a Credit Union a Safe Place for Your Money?
We understand that you want your funds to be safe. And you can be assured that your money is safe in a credit union. Why? Most credit unions are federally insured so its members’ funds are always protected.
Federally-insured credit unions covered by the National Credit Union Insurance Fund (NCUSIF). The NCUSIF is also backed by the US Treasury, which means that credit union deposits are protected. The National Credit Union Administration (NCUA), a US government agency, administers this NCUSIF coverage.
Under the NCUSIF, the insurance gives up to $250,000 in coverage per depositor per credit union. So if you have less than $250,000 at any credit union, you’re fully protected. However, you may still have coverage on amounts over the limit. It all depends on your account categories. So if you have an IRA and a checking account at the same credit union, you might have more than $250,000 of coverage at that institution.
Federally-Insured Versus Privately-Insured Credit Unions
Federally-insured credit unions are the safest option. The good news is that most credit unions in the USA are federally-insured. You can identify such credit unions because they often have the word “Federal” in their name: like Riegelwood Federal Credit Union (RFCU). But your credit union could still be federally-insured even without this word in its name – simply research the credit union on the NCUA website.
Yet, some credit unions are privately-insured, which means they do not have the backing of the US government. However, you need to ask questions about the insurance company that covers such credit unions. These credit unions aren’t to be avoided – once they are secure- you just have to be aware that there’s no federal safety net.
Accounts Insured in Credit Unions
The NCUA insures cash and cash-like holdings such as:
- Checking accounts
- Saving accounts
- Money market accounts (but not money market funds)
- Certificates of deposit (CDs)
- IRAs held in share accounts
But, some accounts may not be covered by the NCUSIF. They include (but not exclusively):
- Mutual funds, stocks, and EFTs
- Annuities and other insurance accounts
- Safety deposit box items
- Other investment vehicles
Pros and Cons of Credit Unions
Depositors are Owners
All credit union members are owners of that institution, not customers. The board members of a credit union make decisions that maximize the gains to the owners.
The fact that credit unions are nonprofit institutions means that all profits are shared with their owners. Now, this doesn’t mean that credit unions aren’t profitable. It just means that there’s no pressure to extort customers/owners with exorbitant fees and rates. The great news is that credit unions are exempt from federal tax. This saves on expenses and leaves more profits for members to enjoy.
Greater Benefits to Members
The preceding advantages mean that there are lower loan rates and fees, as well as higher returns on deposits. Some credit unions may also be regulated to keep their rates within certain thresholds. Credit unions tend to offer fee-free accounts with no minimum balance requirements.
Now let’s consider the cons:
Limited Access to Technology and ATMs (Or So It May Seem)
Some credit unions – depending on their size – may not have the finances to get new technology. But, other credit unions, like Riegelwood FCU feature innovative websites that offer online banking services.
Some credit unions may also have limited access to ATM networks. Since credit unions tend to be community-based, they may lack the ability to install ATMs in convenient locations. However, credit unions often bypass this limitation by allowing you to use an existing network of ATMs. If that ATM’s owner charges you a fee for usage, the credit union tends to refund that fee to you. But always read the small print of your agreement to settle what services are available to you.
Credit unions often serve members in certain communities, professions, or affiliations. So people may feel that it’s hard to qualify to join a credit union. But the great news is that once you get access to a credit union, it’s a lifetime membership.
What to Consider When Choosing a Credit Union
Here’s a list of things to consider when choosing a credit union:
- The type of insurance
- The rates and fees that are charged
- Branches and ATMs available
- Warm customer service
Riegelwood Federal Credit Union (RFCU) is federally-backed by the US government with attractive rates and fees. So there are no worries about finding the right insurance coverage through your credit union – RFCU! We provide dependable online banking and access to a wide network of ATMs. So contact us today and we can discuss how RFCU can help you achieve your financial goals for yourself and your family.