Why do Credit Unions Invest in Life Insurance?

CUOLI is popular with credit unions as a financing or cost-recovery tool for employee benefits. CUOLI can also provide the credit union with the ability to offset expenses from existing benefit programs.

Many credit unions utilize CUOLI as an investment strategy to fund, or cost-offset, benefit programs designed to reward and retain key employees. However, CUOLI is very flexible and is not just limited to executive reward programs as it can also offset other employee benefit programs including healthcare and other group benefits.

CUOLI also offers returns that can compete favorably with the more traditional credit union investments and may potentially offer less interest rate volatility versus investments with mark-to-market concerns.

Although past performance is not indicative of future results, currently CUOLI returns have a significant spread versus other credit union permissible investments. The cost of waiting to invest increases every day a credit union keeps funds in a low-to-no yielding asset versus using those funds for a CUOLI purchase.


Hypothetical Investment Comparisons (in 000s)


5 Year Treasury


15-Year MBS


20-Year MBS















Net Income