An “association plan” in the context of life insurance, living benefits, and health insurance in Canada refers to a group insurance plan that is offered to members of a professional association, trade group, or similar collective organization. These plans are designed to provide insurance coverage (life, health, disability, etc.) to individuals who are part of a specific association, with terms and rates set for the group rather than for each member.
Key features of association plans include:
Membership benefits
Association plans are a value-added benefit for members of professional or trade associations, offering access to insurance products specifically tailored to the needs and risks associated with their professions or industries.
Group rates
By pooling the risk among a large group of members, insurers set premium rates for the group rather than for each member. Depending on your age and health, a group rate can cost less or more than an individual policy.
Customized coverage
These plans are often customized to meet the unique needs of the association’s membership, taking into account common professional risks, income levels, and lifestyle factors to offer relevant life, health, and disability coverage options.
Underwriting
Association plans may feature simplified underwriting processes, with less stringent requirements than individual policies. In some cases, evidence of insurability may not be required, or there may be guaranteed issue provisions for certain levels of coverage. In other cases, full medical underwriting will be required.
Portability
While association plans are tied to membership in the specific organization, some plans offer portability features that allow members to maintain their coverage even if they leave the association, though conditions and premiums may change.
Administrative ease
For the associations themselves, offering an insurance plan can enhance membership value and loyalty, while the administrative and management aspects of the plan are typically handled by the insurance provider or a third-party administrator.
Eligibility and restrictions
Eligibility for association plans is generally restricted to members of the association, and sometimes their families. There may be restrictions on coverage based on age, health status, or other factors, depending on the specific plan.