Credit Union Strategies

What is Credit Union-Owned Life Insurance (CUOLI)?

CUOLI can be an efficient method for credit unions to offset the costs of employee and executive benefit programs while potentially generating higher yields than more traditional credit union permissible investments. This investment strategy offers returns that can compete favorably with more traditional credit union investments and may offer less interest rate volatility versus investments with mark to market concerns.

Article: “Why Credit Unions Purchase CUOLI

Why do Credit Unions invest in life insurance?

  • Returns that can exceed traditional credit union investments
  • Finance employee benefit expenses such as executive benefit plans and healthcare
  • Diversify investment portfolio
  • Potential to mitigate interest rate risk and volatility
  • Access to investments that might otherwise be considered impermissible to own

Is CUOLI Right for Your Credit Union?

While all credit unions can own CUOLI, not all credit unions should. CUOLI must be suitable to the needs and situation of each individual credit union. To find out if your credit union should consider a CUOLI purchase, answer the following:

  • Do you have excess cash or low-yielding permissible investments?
  • Do you have benefit programs that aren’t currently directly related to a financing vehicle?
  • Would your credit union benefit from a possible immediate 3-10 basis point increase in ROA; 30-100 basis point improvement in ROE?

If you answered yes to these questions, an investment in CUOLI should be explored. For more information, and to receive a complimentary CUOLI Impact Report customized to your credit union, please submit the following form:

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