Like most professions group life insurance is offered by employers to their employees as part of an employment benefit package. Group life insurance insures a group regardless of their pre-existing health conditions. The coverage is the same for all involved in the policy and employees do have the option of having their premium payment deducted from their paycheque if they wish to do so. Doctors are offered group insurance through the Ontario Medical Association (O.M.A). The O.M.A’s policy is underwritten by New York Life and is either offered as a term 75 plan or a Term Life plan depending on the doctor’s age.

The Term 75 plan is one where a portion of the coverage (10%) offered in the plan is paid up in full by the time the applicant reaches age 75 and the coverage grows by 10% each year for 10 years. One of the well-known benefits of group insurance is that no medical exam is required to get approved as you are considered as part of the group. But if you are a smoker or a recent non-smoker, you may have a tougher time getting approved for one of these plans since they require you to be smoke-free for 24 months while most individual policies only require you to be smoke-free for 12 months. But the most prominent and significant misconception of group insurance is that it is less expensive than individual policies.

Here are a few things to consider when determining the value of your O.M.A Group Life policy:

Group Term Plans may have increasing coverage, but they also increase in price!

Though the plan increases in coverage as you get older, the extra coverage comes at a cost. In fact, both the Term 75 and Term Life plans’ premiums increase every five years. The amount the premiums are to increase is undetermined and not guaranteed. With an individual policy, either a Term 20, 30, or if you are older a Universal Life policy, the premiums stay fixed for a longer period of time making it easier to manage your monthly finances with the certainty that the rate will not change till your policy expires.

O.M.A Policies Cannot give you Special Treatment: If you are in optimum health with a good family medical history you cannot attain a preferred rateor discounted rate than your colleagues. With most individual policies you may undergo a medical exam that can evaluate you and determine whether you qualify as a preferred or low-risk applicant. Preferred rates can account for significant savings, especially with term plans. For more information on what is needed to qualify for these rates with an individual policy read: How to Ace Your Medical Exam.

Group Plans are Taxed: Group plans premiums are subject to sales tax while premiums on individual policies are not. The premiums paid on these group plans will increase in five-year increments as recently discussed and the sales tax on those premiums will increase with them. This can result in uncertain and unfixed increases in your monthly premiums that can make it difficult for you to keep track of how much your coverage is costing you as your policy matures.

For these reasons and many others it is advisable to discuss your O.M.A policy with a Canadian, Toronto-based life insurance broker like Jack Bendahan to ensure that the cost of your policy fits within your budget and is most appropriate for your needs.

Contact the Lifeman at 416-995-8705 if you have any questions or for a free Term Life insurance quote visit: https://lifeman.ca/request-a-free-quote/