Insurance Sample Cancellation Letter - DOC by BeunaventuraLongjas

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									This is a sample notice regarding the cancellation of Life Savings Insurance:


                            Important Notice Regarding Life Savings Insurance

   Your credit union offers you the lowest loan rates and the highest interest rates on savings that we possibly can.
We also offer products and services based upon what members tell us they want. To continue with this commitment
to you despite rising costs, your credit union must continually evaluate cost versus benefit of the various products
and services offered its' members.

   That is why we must cancel the Life Savings Insurance group policy - term insurance the credit union has
provided at no direct cost on all eligible deposits - effective July 31, 1999. Coverage on existing insurable deposits
will end one month later on August 31, 1999. Please destroy any CUNA Mutual Life Savings Certificates of
Insurance at that time. (This only pertains to the Life Savings coverage that has been provided and paid for by the
credit union. This does not pertain to any insurance coverage you may have purchased or have deducted from your
share account.)

IMPORTANT: You have the right to convert this Life Savings policy into a member pay, permanent (whole) life
plan of $2,000 or less. To get this conversion coverage, you must request and return a completed application with
your first premium payment to CUNA Mutual Insurance Society by August 31, 1999.

The effective date of the conversion policy will be September 1, 1999 with premiums based on your age on that
date. Call CUNA Mutual's Credit Union Services at 1-800-356-6006 for details, rates and an application. This
coverage builds cash values and may pay non-guaranteed dividends after the second year. If guaranteed acceptance-
-no age restrictions, no waiting periods, no exclusions, no health questions--is important to you, I urge you to call 1-
800-356-6006 right now for more information and an application.

                SAMPLE ANNUAL PREMIUM FOR A $1,000 PERMANENT LIFE POLICY

                       Once purchased, rates will not increase, benefits will not decrease.
                          Call 1-800-356-6006 for the premium rate you’re your age.

           Age                          35                          45                          55                           65
          Female                      $29.87                      $38.08                      $52.82                       $88.33
           Male                       $30.87                      $40.28                      $55.82                       $91.33

   Because everyone's insurance needs are different, we've asked CUNA Mutual to make additional group
term and whole life plans available to our members. Call 1-800-356-6006 to discuss your options with one of
CUNA Mutual's knowledgeable, fully licensed service representatives. It's easy, convenient and confidential.
There is no cost or obligation to buy. Your credit union relies on CUNA Mutual, the credit union insurance
company, for dependable protection, affordable rates and excellent service--why not give them your careful
consideration?

   If you have any questions about this Life Savings Insurance cancellation and conversion, please call us. As
always, we appreciate the opportunity to serve you.

---------------------------------------------------------------------------------------------------------------------

After much ado at the subsequent annual meeting, this is the follow up letter that went out in
another newsletter:

    At our annual membership meeting in April of this year, a motion was passed asking the
Board of Directors to reconsider its action that cancelled the Life Savings insurance policy
through CUNA Mutual Insurance Group. This policy, which matched up to $2,000 in share
balances, was purchased by the credit union a very long time ago when $2000 would go a long
way toward death related costs.

    In the spring of 1999, the board took a very long look at this expense and determined that we,
like many other credit unions, could no longer afford to carry the product and voted to cancel the
policy effective July 31, 1999. An announcement was made in the credit union newsletter that
included a notice of the members' right to convert this policy to a member paid permanent life
plan of $2,000 or less.

    Since the membership meeting, we have once again looked at the Life Savings Insurance,
and have carefully reconsidered whether our action of 1999 was in the best interest of the entire
membership. We have spoken with credit unions across the country and have found that a large
number of them have cancelled the policy as well and for much the same reasons. Those reasons
are: the product has outlived its useful life and is too costly for the entire credit union
membership to bear.

    As all that were at the membership meeting were made aware, feelings run deep on this
matter. I assure you that your Board of Directors had similar feelings that contributed to lengthy
discussions in our meetings when we were trying to decide if we could afford to continue this
product and still move into the future by offering the newer products our members want.

    It is true the credit union cannot be all things to all members with the services it provides.
The board must determine the services that benefit the majority of the credit union's membership.
To do that, we must constantly assess and evaluate our products and services. We feel that our
action regarding the Life Savings Insurance was a sound business decision and in the end
benefits the entire membership of FedStar Federal Credit Union. Therefore, our decision to
cancel this policy stands.

    We appreciate those members who are willing to stand at the annual meetings and voice their
concerns to the Board of Directors. Though it may not seem so all the time, their interests and
the Boards' are one and the same. That is, making FedStar Federal Credit Union the best it can be
for all its members.

Sincerely yours,



Chairman's Name

								
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