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Group Insurance

Group Insurance - G roup Insurance Benefit categorization...

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Group Insurance Benefit categorization: Insurance benefits: most common Canadian group benefit, YRT most popular Disability: includes sick leave, salary continuance, STD, LTD Medical and Dental Plans: extended health, supplementary health, major medical are all terms referring to private health plans, dental programs considered separately (never been a SI supporting program for this) Plan sponsor: are varying forms of plan sponsor, as per FSS note (single er most common) Group Insurance U/W principles: -try to achieve acceptable cross selection of risks ways of achieving this are different for group vs individual insurance: individual: through elimination of small% of undesirable high risks group; treated as a single risk by looking at: -min % requirements of ees to be covered -evidence requirements for those applying after eligibility period -encouraging fresh flow of hirees into covered group -minimizing degree of benefit choice for any one plan member -ensuring group formation not primarily for obtaining insurance -higher participating encouragement (er cost subsidies) Group Life Insurance -individual evidence for coverage is kept to a minimum -may have non-medical maximums and overall maximums Coverage is usually yearly renewable term (YRT) -group vs individual premiums -> group lower (marketing/admin fees lower) -group eligble for coverage must be well definted -par requirements: if fully er paid -> 100% participation -if ee contributions required -> a min % of group must participate. If <75% then evidence usually required (unless it’s a large group) -benefit expressed as flat amounts (union) or earnings multiple (non-unions) basic vs optional coverage: often er provides basic mandatory coverage (er paid) and ee can elect optional coverage subject to a max (ee paid) Benefit Provisions: i) conversion privilege: convert group life to individual life with 31 days of termination -can buy life individual products for dsame face amount at standart individual rats without evidence (usually subject to 200 000 max) -ifdeath within 31 days, treat as if individual had exercised conversion ii) Waiver of premium: -if ee is diabled prior to age 65, they continue to be covered without having to pay premiums -if er doesn’t insure waiver or premium, they have to pay premiums to keep the life insurance coverage in force (regulatory requirement)
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iii) Terminal payments: advancement of DB payment (prio to death), for terminally ill, subject to limits and written beneficiary consent iv) Installment disability: -for perm and totally disable ees (strict definition) -found in some older contracts, now rare since LTD benefits are more common -payout DB amount for n years with level monthly payments Other Group Coverages: i) AD & D also called double indemnity insurance -benefit if plan member accidentally dies/suffers traumatic injury -are some policy exclusions (self-inflicted, war, riot) and restrictions -can be option coverage, usually er pays for basic and ee pays for optional -relatively cheap, basic coverage amount =basic group life amount ii) Optional group life
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Group Insurance - G roup Insurance Benefit categorization...

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