The National Credit Union Administration (NCUA) allows for the purchase and holding to maturity of Credit Union Owned Life Insurance (CUOLI) products if it complies with §701.19 of NCUA’s rules regarding benefits for Federal Credit Union employees. CUOLI may recover the cost of the employee benefit and the cost of the funding for that benefit. 

Specifically, section (c) of §701.19 states: 

(c) Investment authority. A federal credit union investing to fund an employee benefit plan obligation is not subject to the investment limitations of the Act and part 703 or, as applicable, part 704, of this chapter and may purchase an investment that would otherwise be impermissible if the investment is directly related to the federal credit union’s obligation or potential obligation under the employee benefit plan and the federal credit union holds the investment only for as long as it has an actual or potential obligation under the employee benefit plan.