Many corporations offer competitive packages as a way to retain and hire employees, as we have already mentioned. These packages can include individual retirement accounts, traditional registered pension plans, and group insurance. We will be discussing the benefits and drawbacks of an association group insurance plan in this article.
An association group is a group of people or companies who have similar occupations like lawyers, dentists, doctors, etc. Each member pays the premiums and the association arranges group insurance. A master contract exists between the insurer and the association. Each member receives a certificate detailing the coverage.
I. Advantages
a) Offer more affordable coverage through mass purchase and group discounts
b) Group insurance can be arranged by the Association. You only need to pay to enroll.
c) Allow for higher amounts of life insurance, and the right to convert each member’s life insurance within 60 days after termination.
d) A certificate is issued proving coverage.
e ) Individual insurance may have a lower premium and provide more coverage.
II. Disadvantages
a) The coverage of your policy will decrease in the later years, and you can increase your premiums without notice.
b) Group insurance plans can be modified, restricted or terminated without the input of a member.
c) Many contracts include restrictive clauses and a suicide clause for two years.
d) If the association holds the master policy, some members may opt to have an individual policy.
e) Insurance company and association negotiate contract and coverages. It is binding on all members.
I hope you find this helpful.