Advantages and Disadvantages of Association Group Plans

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As we mentioned in previous article, many corporations offer competitive packages, and that’s even a strategy in hiring and retaining employees. These competitive packages include group insurance to plans that provide individual retirement accounts or traditional registered pension plans, etc. In this article, we will discuss the advantages and disadvantages of association group insurance plan.
Association group is the group of individuals or companies with similar occupations such as dentists, lawyers, medical doctors etc. The association arranges group insurance for its member and individual member pays all the premiums. The master contract exists between the association and the insurer and individual member receives a certificate detailing coverage.
I. Advantages
a) Provide more economical coverage because of mass purchase and group discounting.
b) Group insurance is arranged by the Association and only requires payment to enroll.
c) Provide for larger amounts of life insurance and the right to convert life insurance for each member in the association within 60 days of termination.
d) Certificate is issued showing coverage.
e ) Coverage may be more comprehensive and premium is lower than individual insurance.

II. Disadvantages
a) Coverage reduces in later years and premiums can be increased without notice.
b) The group insurance plan amendments, restrictions or termination can be effected without input of member.
c) Most contracts contain restrictive clauses and a two-year suicide clause.
d) The master policy is held by the association therefore some member may consider to opt out with an individual policy if they consider that is the best solution.
e) Contract and coverages are negotiated between association and insurance company. Member of association has to no say to it.

I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:

http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
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