New BCMA term life insurance: Lower premiums, more flexibility

On 1 January 2012, the BC Medical Association introduced a new and improved term life insurance plan to its current insured members. What makes this change unique is that the BCMA has collaborated with the Al­berta Medical Association and Sas­katchewan Medical Association to establish a common plan design and leverage the combined membership of the three associations to improve coverage and reduce premium rates.

The process began in the fall of 2010, with the three associations interviewing and then selecting an actuarial consultant. After collecting and analyzing the data from the three plans the consultant presented a strategy document to association management in the spring of 2011. 

The incumbent insurer for AMA and BCMA (Sun Life Financial) was asked to present a proposal. Due to the complexity of combining the plans it was not tendered to the wider insurance marketplace, but that opportunity is always available to us in the future. After receiving Sun Life’s proposal and negotiating final adjustments, agreement on the new plan was reached in September 2011.

Highlights of the new plan
Lower rates: Our larger plan membership has resulted in a reduction in rates (an average of 15% for nonsmokers). The new rate table applies to all current insureds, regardless of their current health status, as well as new applicants.

Coverage maximum: Up to $3 million of coverage is available, in units of $50000.

Improved Future Insurance Option rider: Insureds with this rider may now increase coverage by up to $500000 over their original insurance amount (previously the maximum increase was $300000) and the rider now extends to age 55 (previously age 50).

Improved living benefit: Insureds may now access 50% of their life in­surance benefit up to $200000 (previously $50000) if they are terminally ill and not expected to survive 12 months.

Separate waiver of premium rider: The waiver of premium provision (i.e., the waiving of premium payments if the insured is totally disabled from his or her regular occupation) that was previously included in the base plan is now offered as an optional rider to new applicants. Current insureds who do not wish to continue this feature can cancel it and save a further 16% on premiums.

Improved conversion privilege: In­sureds who wish to convert any or all of their BCMA term life insurance coverage into a permanent life insurance plan (i.e., whole life, universal life) that can last for their lifetime may do so without proof of good health at any time up to their 70th birthday (limitations apply on coverage issued without proof of good health). Previously the maximum amount that could be converted was $400000, and this feature was only available on involuntary loss of coverage.

Improved association (not-for-profit) group model
Lower rates and improved insurer ex­penses and reserves mean less premium going to the insurance company: Premiums that otherwise would have gone to Sun Life will now remain in the “AMA, BCMA, SMA pool” and any resulting premium surpluses will be returned to insureds through premium refunds or discounts.

Objective advice: BCMA insurance staff, including our licensed advisors, continue to be compensated on a sal­aried basis, ensuring objective advice to members in a low-pressure environment.
Local administration: Each association will continue to administer its insurance programs within its jurisdiction. 

If you are considering term life insurance coverage, or if you carry term life insurance with another company (e.g., retail plan, mortgage insurance, line of credit coverage) you really should consider the BCMA term life insurance plan. 

Give us a call at 604 736-5551 or toll free at 1 800 665-2262, ext. 8745 or 6056, to speak with a salaried, noncommissioned insurance advisor, or e-mail bcmainsurance@bcma.bc.ca. More information may be accessed online at www.bcma.org/member-services/insurance-life.
—Sandie Braid
BCMA Director of Insurance