AMA Term Life Insurance: Even more competitive in 2017

Insurance Insights

March 8, 2017

Contributed by:
J. Glenn Mcathey, CFP, CLU, CHS | Director, ADIUM Insurance Services Inc.

Harmonized Life Insurance update

Exactly five years ago we announced our collaboration with the Doctors of BC and the Saskatchewan Medical Association (SMA) for a harmonized group life insurance program for our respective members.

By joining forces we were able to reduce our rates for non-smokers an average of 19% and introduce other improvements, most notably the conversion option
that allows the insured to exercise a conversion of coverage to an individual permanent insurance policy at any time up to age 70.

In addition to the lower rates, the non-profit nature of the plan allowed us to return excess premiums (gross premiums less claims and expenses) to members through our Alberta Medical Association (AMA) Premium Credit. Our credit in 2012 and 2013 was 15%. It rose to 20% for each of 2014, 2015 and 2016. As of December 2016, we insure over 6,500 members and spouses with total in-force coverage of $3.9 billion!

We are pleased to advise that for 2017 we have been able to further reduce non-smoker rates for members in age-bands 40 to 60 by an additional 15% and
continue with our 20% AMA Premium Credit.

We can definitely conclude that our collaboration with Doctors of BC and the SMA has benefitted our members, and we are confident that improvements will continue
in the future.

Is it time to review your coverage?

If you haven’t considered our coverage recently, perhaps you will now. The first step is to review your life insurance needs. You can do this by contacting
one of our salaried insurance advisors:

  • Ms Kelly Guest (from Red Deer north)
  • Ms Mona Yam (Southern Alberta)

They can complete a life insurance needs analysis for you that encompasses your immediate cash needs, such as funeral expenses and debt (mortgage, line of credit, etc.), educational funding for children and income needs for surviving dependents. You may also use our online calculator to calculate your own needs.

  • Go to the AMA website (www.albertadoctors.org).
  • Enter “Life insurance rate calculator” in the (top-right) search field.
  • Click “Life Insurance needs analysis and premium calculator.”

Note that our rate calculator provides our standard non-smoker rates before any premium credit and that for those members enjoying very good health, we have even lower Preferred and Elite rates that you may be approved for during the underwriting process, provided you apply for at least $250,000 coverage.

Is your mortgage or line of credit life insured through your financial institution?

Anyone who has taken out a mortgage or a line of credit has been asked if they want to insure it. The purpose of this is to pay off the balance of the debt in the event of your death. What many people don’t realize is that they can insure their mortgage or line of credit through their own life insurance, which encompasses the retirement of debt plus your other needs, such as income requirements for dependents. The coverage is all in one place and you might get a much better rate with the AMA Term Life Insurance plan. Plus your coverage will not decrease as your pay down your debt.

How much does AMA Term Life Insurance cost?

Below are sample monthly non-smoker premiums for $100,000 standard rates. These may be extrapolated to up to $5 million.

Female

Age  Published Rate  After 2017 AMA Premium Credit 
 25  $1.58  $1.26
 35  $3.15  $2.52
 45  $5.19  $4.15
 55  $15.03  $12.02

Male

 Age Published Rate  After 2017 AMA Premium Credit 
 25  $2.79  $2.23
 35  $4.24  $3.39
 45  $8.00  $6.40
 55  $21.93  $17.54

Evolving needs

As you age, your need for term life insurance typically will decrease or disappear as a result of paying off debt, dependents becoming independent adults and the maturation of your financial plan. The need for permanent life insurance should be discussed either with an ADIUM advisor, who may refer you to MD Financial Management for further information, or with your MD Financial Management financial consultant. Permanent insurance is just that; it stays in force your entire life and is purchased for permanent needs such as paying taxes that become payable at death or for tax-free accumulation of funds inside the policy.

Northern Alberta (from Red Deer north)
Ms Kelly Guest, EPC, CHS
Insurance Advisor
T 780.482.0306
kelly.guest@albertadoctors.org  

Southern Alberta
Ms Mona Yam, CFP, CLU, CHS, BComm, BA
Insurance Advisor
T 403.205.2088
mona.yam@albertadoctors.org

The Alberta Medical Association stands as an advocate for its physician members, providing leadership & support for their role in the provision of quality health care.