OMA Insurance offers two life insurance products; Group term to 75 and Flex term 10/20 through New York Life. Most physicians with OMA life insurance have Group term to 75 where rates increase every 5 years, a premium refund is paid at year-end, policies are not convertible to permanent insurance and up to $2,000,000 is available. At age 65, the OMA Group term 75 life insurance benefit decreases by 10% per year while the rate does not change. At age 75, up to 10% of the original coverage may be paid up. The Flex term 10/20 insurance product was introduced a few years ago and offers a 10 or 20-year term insurance policy that is convertible to permanent insurance. There is no premium rebate on the Flex term insurance and up to $3,000,000 is available. The total life insurance available with OMA is $5,000,000.
Through the OSA’s OMA Life Insurance Replacement Program, physician’s and their spouse/partner can replace up to $5,000,000 of OMA life insurance with the identical amount of life insurance with the RBC Your TermTM 10 life insurance.
In order to be eligible for OMA insurance, OMA members must be in good standing, which means they must be up to date on their membership fees. With the OSA, there is no reference to being in good standing or membership fees in order to qualify or maintain your insurance.
- RBC Your TermTM10 policies are renewable to age 100.
- Policies are convertible to permanent life insurance (not available on the OMA Group term to 75 plan).
- Rates are less than OMA Group term 75 insurance (even after OMA rebate).
Example: You have $1,000,000 of life insurance through the OMA and you leave the OMA to join the OSA. You will be eligible for $1,000,000 of RBC YourTermTM 10 individual life insurance policy, if you can answer yes to question 1 (or no to question 1 and yes to question 2) and no to question 4 on the RBC Insurance application. Policies will be issued with a pre-authorized monthly debit.
- Product provided is the RBC YourTermTM 10 individual life insurance policy.
- Death benefit amount for a member will be equal to the combined death benefit under all of the member’s OMA life insurance coverage (to a maximum of $5,000,000); death benefit amount for a member’s spouse/partner will be equal to the combined death benefit under all of the spouse/partner’s OMA life insurance coverage (to a maximum of $5,000,000).
- Premium payment will be by monthly pre-authorized debit.
- Click here for a specimen RBC YourTermTM 10 contract
COMPARISON OF OMA LIFE INSURANCE VS. RBC LIFE INSURANCE
When doing a comparison across insurance products, we compared the policy provisions and cost differences after OMA annual premium refund of OMA Group Insurance vs. RBC Individual Insurance.
Cost comparison OMA vs. RBC Insurance
Rates are highly competitive and in most cases less that the OMA Group life insurance term to 75 plan with similar coverage (even after the OMA annual premium refund). Below are price comparisons based on sample ages of the OMA Group term to 75 vs. RBC Yourterm life insurance for illustration purposes.
- Male and female age 30; Savings over 20 years $ 9,883
- Male and female age 35; Savings over 20 years $33,293
- Male and female age 40; Savings over 20 years $54,779
- Male and female age 45; Savings over 20 years $83,557
- Male and female age 50; Savings over 10 years $40,323
- Male and female age 55; Savings over 10 years $56,693
- Male and female age 60; Savings over 10 years $45,117
WHAT IS YOUR INDIVIDUAL COST TO REPLACE YOUR OMA INSURANCE?
Attached is the cost summary that illustrates the monthly cost by gender, age and insurance by product (life, disability, critical illness and office overhead insurance).
FREQUENTLY ASKED QUESTIONS:
RBC Life Insurance Company.
No. This is an individual insurance policy where you own and control the policy. Neither the insurance company (RBC Life Insurance Company) nor the association (the OSA) can cancel or change your insurance. Unlike the OMA which ties your insurance to OMA membership fees, neither the insurer (RBC Insurance) nor the Association (the OSA) can cancel or change your insurance.
No. There are 5 medical questions on the application.
RBC YourTermTM 10 life insurance is temporary insurance. Rates increase annually after the 10th policy year until age 100. You have the option to exchange within the first 5 years to a YourTerm 15, 20, 30 without medicals. Also has the conversion option to RBC’s permanent plan options of RBC UL and Term 100.
Permanent insurance is lifetime coverage. Policies are either universal life or participating whole life. A universal life insurance policy has a guaranteed death benefit. A participating whole life insurance policy is an asset accumulation, estate, and retirement planning vehicle where the cash value and death benefit increase as dividends are paid into the policy.
YES. Each RBC YourTermTM 10 life insurance policy is issued with a conversion feature which allows policy holders to convert their RBC YourTermTM 10 life insurance to any permanent life insurance offered by RBC Insurance at the time of conversion so long as the conversion is done prior to age 71.
No medical means no blood or urine, no doctor or nurse visit, no lengthy application, no physician’s reports. Only 5 medical questions.
If you are not in good health (see 5 medical questions), you will not qualify for the replacement offer with RBC Insurance. In this case, you should maintain your OMA membership and keep your OMA insurance.
YES. If your corporation owns and pays for your insurance it should also be the beneficiary of the life insurance and pay the premium.
An advantage of corporate owned life insurance is that the corporate tax rate is usually lower than the shareholder’s marginal tax rate; therefore, there is typically a cost advantage to having the corporation own the policy and pay the insurance premium where the corporation owns a policy on the life of a business owner. The receipt of insurance proceeds by a corporation creates a capital dividend account credit which creates significant tax planning opportunities. You should consult with your lawyer and accountant to ensure that the use of corporate-owned life insurance works for your situation. We recommend that you arrange your affairs so that your intended beneficiaries are ultimately able to benefit from the proceeds of your corporate-owned life insurance policy. Upon your death, the corporation receives the proceeds of the life insurance and it can credit its “capital dividend account” by an amount equal to the proceeds less the policy’s adjusted cost base. The corporation is then able to declare a capital dividend, which will allow the proceeds in the corporation’s capital dividend account to flow to the corporation’s shareholders. The shareholders, who may be your estate, your spouse and/or your children, are not taxed on the receipt of a capital dividend. Corporate owned life insurance is not creditor proof and the insurance premiums are usually a non-deductible expense. As part of your overall planning, we would encourage you to revisit your articles of incorporation and corporate will on a regular basis with your lawyer to make sure that they are up to date and consistent with your wishes.
OMA Insurance offers two life insurance products; Group term to 75 and Flex term 10/20 through New York Life. Most physicians with OMA life insurance have Group term to 75 where rates increase every 5 years, policies are not convertible to permanent insurance and up to $2,000,000 is available. At age 65, the OMA Group term 75 life insurance benefit decreases by 10% per year while the rate does not change. At age 75, up to 10% of the original coverage may be paid up. The Flex term 10/20 offers a 10 or 20-year term insurance policy that is convertible to permanent insurance. There is no premium rebate on the Flex term insurance. The RBC YourTermTM 10 is an individual life insurance policy, that is convertible to permanent insurance, rates are guaranteed and in most cases rates are less than the OMA group term 75 life insurance (even after OMA refund). See life insurance policy provision comparison.
OMA Insurance Replacement Program
P: 416-222-1311 I 1-877-314-1311 I E: INFO@OSAINSURANCE.COM