Changes to LP/LS

St. Anthony’s & Claddagh Credit Union – Reduction in Life Savings insurable cover limit

As always, your Credit Union works hard to provide the best possible service for you, our valued Member. Every decision the Board of your Credit Union takes is done with your, and all our Members, best interests in mind. In the current challenging economic environment of increasing costs, critically low investment returns and negative interest being applied by banks to funds held by Credit Unions, it has been necessary for our Board to review a number of our products and offerings. Following a period of careful examination, the Board reluctantly took the decision to reduce Members’ life insurance benefits. The Life Savings and Loan Protection cover reductions that are being implemented, as follows:


Loan Protection changes

  • From 1st February 2022 Loan Protection total and permanent disability cover will be discontinued and the Loan protection cover will reduce to a “Death Only” basis. The removal of disability cover will have a very limited impact as it only applies where a Member is, as a result of injury or illness, rendered totally and permanently disabled before age 60 and unable to carry out any occupation for the rest of their lives. This is a strict definition of disability and has meant that only a very small number of claims have qualified in the past for payment while this cover has been in place.


However, Members can be reassured that loan protection death only cover will remain in place to protect eligible members when they borrow from their Credit Union i.e. have the debt die with the debtor.  This valuable cover provides protection for borrowing members in the event of their untimely death and is designed to clear any remaining loan outstanding.  This is an excellent member service that can cover Members from age 16 to 84, with cover ceasing before members 85th birthday. This cover is subject to eligibility and policy terms and conditions of cover.

Life Savings changes

  • From 1st February 2022, we will be reducing the maximum Life Savings (LS) cover limit from €12,700 to €3,000. This means on the death of an eligible member, the maximum life savings benefit payable cannot exceed €3,000.


Total Premiums last year amounted to €665,701. The reduction in the insurance covers mentioned above (loan disability and life savings cover) are estimated to reduce our insurance premiums next year by a further €321,000. This will help to mitigate the cost of negative interest rates


If you have any further queries in relation to this process, please contact us on 091 537200. 


Frequently Asked Questions for Changes to Insurance


What is the change being made?

We are reducing our Life Savings (LS) maximum cover limit from €12,700 to €3,000 . Loan Protection total and permanent disability cover will be discontinued and the Loan protection cover will reduce to a “Death Only” basis


When do the changes take effect?

  • All changes will take effect from 1st February 2022

Why are these changes being made?

The credit union is obliged by law to prepare a strategic plan and to make financial projections covering at least 3 years. We could see that we can no longer afford to provide free insurance cover at the current level of cover. The level of cover will be kept under review and in the event of a significant change in the macroeconomic environment the current level of cover may be restored.

Why is the credit union not able to make more money?

  • Our loan book has decreased
    The credit union’s main way of making money is through giving out loans to members. While it is now growing again, as Covid 19 restrictions ease, it would have needed to grow much further by now to have allowed us to continue with the benefits as they were.
  • The level of return from investments is very low
    Many of the Irish banks are now charging credit unions to hold money in demand and short-term notice accounts. While we minimised this cost, it badly affects what used to be a good source of income in the past. The investment options are restricted under current regulations but we are working with the representative bodies to develop the options.
  • Funds held by the Credit Union with banks are now attracting negative interest rates

Negative interest charged by banks on funds held with them by credit unions is now a significant financial burden adding to our costs

  • Regulatory costs (levies) for all credit unions are a significant cost
    Most of these are paid to the Central Bank, including

    • the Deposit Guarantee Scheme Contributory Fund Charge
    • the Industry Funding Levy for Credit Unions
    • the Industry Funding Levy for Retail Intermediaries
    • the Credit Institutions Resolution Fund Levy
    • There are also smaller levies for the Financial Services & Pensions Ombudsman, the Competition & Consumer Protection Authority and the Investor Compensation Company Ltd.

Has the credit union tried to do anything else to save on costs?

  • We have reduced costs in other areas as much as we could; and
  • We will continue to look at ways to cut costs while preserving services to members.