Q: 1) Who can get OMA Flex-Term Life*?

Members of the Ontario Medical Association, Doctors Nova Scotia, New Brunswick Medical Society, Medical Society of Prince Edward Island or Newfoundland and Labrador Medical Association who

A. reside in Canada* B. are under age 65 C. are (i) actively engaged in medical practice in Canada, including research, teaching and

administration or (ii) medical students, residents and post graduate students.

*Residents of Quebec are eligible if (i) they practice or study outside of Quebec but still reside in Canada; (ii) the application is signed in a province other than Quebec, and (iii) the certificate and other communications are delivered in a province or territory other than Quebec.

The lawful spouse of a member or a person who although not legally married to the member, cohabits with the member and is publicly presented as the member’s spouse in the community in which the member resides, is also eligible provided

A. such person is under age 65, B. such person is not insured for member coverage and C. the member does not have another spouse or former spouse insured under this plan or under the

OMA Term Life plan (G-3900) or the OMA Term Life Plus 75 plan (G-29500).

A member must be insured under this plan or under G-3900 or G-29500 or be uninsurable in order to insure a spouse.

Q: 2) What is interim or temporary coverage?

Interim coverage provides limited coverage while your application is being processed. It begins on the later of (a) the date you sign the application or (b) the date indicated on the cheque and ends on the earliest of the following:

(i) the date your application is approved; (ii) 90 days after the date you sign the application (iii) the date New York Life mails notice that your application has been declined; (iv) The date you withdraw your request for coverage

 

 

(v) The date you decline New York Life’s offer of insurance; or (vi) The date you are no longer an eligible member or, with respect to spouse coverage, your spouse

is no longer an eligible spouse. *10 Year Level Group Term Life Insurance Plan

In order to qualify, you and your spouse (if applying for interim coverage) must request interim insurance, truthfully answer “no” to the health questions on the application and submit one month’s premium for the full amount of coverage applied for each person applying for interim coverage.

Coverage is equal to the lesser of:

(i) The amount of insurance requested or (ii) $1,000,000

Note: You may only be insured for one interim insurance amount at any given time. Waiver of premium is not offered with interim coverage.

Q: 3) What is the difference between OMA Flex-Term Life and the existing OMA term life insurance?

The OMA Flex-Term Life insurance plan guarantees the initial rate for a 10 year period which means that an insured will not receive a rate increase for the first 10 years of coverage. Options available at the end of the initial 10 year period are described below in Q.5 “What happens after 10 years?”

The existing OMA life insurance plans (G-3900 and G-29500) are annual renewable plans with rates subject to change each time an insured enters a new age bracket. The rates are not guaranteed to remain level and are subject to change by agreement between the OMA and New York Life. Under both of these plans, coverage reduces due to age. The schedule of reduction varies based upon the schedule which you are insured. The G-29500 plan includes reduced paid up insurance at age 75.

Other differences and details about the existing OMA life insurance plans (G-3900 and G-29500) including costs, features, eligibility, limitations and exclusions and renewability are included in informative brochures which are available upon request.

Q: 4) Am I still covered if I move out of the province?

Yes—if you leave Canada, your insurance is portable anywhere in the world provided you maintain non-resident membership in an eligible association.

Q: 5) What happens after 10 years? There are two things that can happen:

A. At the end of the initial 10 year period, if a member (or insured spouse) is under age 65, he/she may apply for a new 10 year period of coverage. To qualify, evidence of insurability must be submitted. If another 10 year period of coverage is approved, it will be based on the insured’s health at that time and on the insured’s age coinciding with or immediately preceding September 1.

B. If a member (or insured spouse) does not qualify for a new 10 year period or is over age 65, coverage will automatically continue on an annual renewable basis and premiums will be based on the insured’s age on the September 1 coinciding with or immediately preceding the anniversary of date of coverage and will increase each anniversary date as the insured enters a new age bracket.

 

 

Q: 6) What are preferred rates?

“Select non tobacco/nicotine” and “Standard tobacco/nicotine” rates are the premiums offered to people who meet the insurance company’s underwriting criteria. In some circumstances a person may qualify for lower “Preferred” rates. The availability of Preferred rates is at the discretion of the insurer and must be supported by the results of your health history, personal medical information and may include other factors such as hobbies and driving record. As a member service, all applications from non-tobacco/nicotine users are considered for Preferred rates. You will be notified at the time of policy issuance of the lower premium, if applicable.

Q: 7) What does substandard risk or “being rated” mean?

Substandard risk is an applicant whose health or high risk activities prevent such person from qualifying for Preferred non-tobacco/nicotine, Select non-tobacco/nicotine or Standard tobacco/nicotine rates. Some of these individuals may still qualify for coverage but at a higher “rated” premium. Such applicants will be advised of the applicable premium and they will be given the opportunity to accept or reject the offer.

Q: 8) Can I cancel my existing OMA coverage and get this new product?

Yes, if you meet the eligibility requirements but you must complete an application and provide satisfactory evidence of insurability to New York Life. Please note that you should wait until the new policy is issued before you cancel your existing coverage. The two year incontestability period will start again with the new coverage.

Q: 9) How long does it take to get approved?

The underwriting process generally takes up to six weeks depending on when New York Life receives all relevant information.

Q: 10) Why did my policy papers list a different premium amount than the online premium calculator?

The final rate that you receive upon approval of coverage is based on the insured’s health and medical history, tobacco/nicotine use and participation in high risk activities, if any. Also, since the actual premium is based on the insured’s age on the September 1 coinciding with or immediately preceding the effective date of coverage, age, hence premium, may be different from the calculator premium.

Q: 11) Can I pay by credit card?

At this time, we only offer convenient preauthorized automatic debit payment from a bank account.

Q: 12) Can I pay premiums annually or monthly?

Under this plan, premiums must be paid monthly

Q: 13) Can I fax or email my application to you?

The application requires your original signature. To speed up the process, you may fax your application so the underwriting process can begin. You must send the original application with your original signature and to qualify for interim insurance, a cheque for one month’s premium must be submitted with the application. It is important to mail both in as soon as possible.

 

 

Q: 14) How do I convert to permanent coverage?

Provided the insured is under age 65 all or part of their coverage may be converted to Level Term to 100 coverage (T100) without providing medical evidence. T 100 rates are based on the insured’s age as of the September 1 coinciding with or immediately preceding the effective date of the T 100 coverage and will remain level until the insured attains age 100.

Q: 15) What happens when I retire and am no longer a member?

When you are no longer a member of an eligible association, your coverage under the OMA Flex-Term Life plan will end on the August 31 coinciding with or next following the date you end your membership. But, retirement does not automatically terminate coverage if you maintain your membership and pay the premiums when due. Note: Members who convert to T100 are not required to maintain their membership in order to continue coverage.

Q: 16) What happens if coverage is converted to Level Term to 100 coverage and the insured person lives longer than 100?

At age 100, coverage is considered “paid up” and will continue in force until the death of the insured person with no premium required. The full benefit is payable for life if coverage is converted to T100.

Q: 17) Do I get premium refunds?

The rates for the OMA Flex-Term Life plan have been designed to keep the initial premium cost as low as possible and therefore, depending on the plan’s experience, this plan may generate only a nominal premium refund, if any.

Q: 18) What if I no longer qualify for the OMA Flex-Term Life plan when I renew?

If a member (or insured spouse) does not qualify for a new 10 year period or is over age 65, coverage will automatically continue on an annual renewable basis and premiums will be based on the insured’s age on the September 1 coinciding with or immediately preceding the anniversary of date of coverage and will increase each anniversary date as the insured enters a new age bracket

Q: 19) What is the 30-Day Free Look?

When approved for coverage the Certificate should be carefully reviewed. If not completely satisfied, simply return the Certificate to OMA Insurance within 30 days, without claim, to receive a complete refund of premiums paid.

Q: 20) What happens to my spouse’s coverage if we divorce or if I die?

If you and your insured spouse divorce, or if you die, coverage for your spouse can continue under the plan until the August 31 coinciding with or next following the date he/she attains age 75 as long as premiums continue to be paid when due.

Q: 21) What happens if I become disabled?

If you elected and were approved for the optional waiver of premium benefit, become totally disabled prior to age 60 and remain totally disabled for 180 consecutive days, your member life insurance will continue without premium contributions as long as you remain totally disabled until coverage ends at age 75. The

 

 

optional waiver of premium benefit is not available for spouse coverage. Premium for spouse coverage will continue to be payable if the member is on an approved waiver of premium claim.

Q: 22) What happens to my ex-spouse’s coverage if I re-marry?

You may not have more than one spouse insured under the plan at any time and so you cannot insure a new spouse while your former spouse is still insured under the plan.

Q: 23) Can I still convert to permanent insurance if I’m on the Disability Premium Waiver?

If you are disabled and on waiver of premium and are under age 64, coverage may be converted to the Level Term to 100 plan on a premium paying basis. This may not be in your best interest and you may want to discuss this with a financial planner and/or your OMA Insurance Advisor before making a decision.

Q: 24) Can I still buy the existing OMA Term Life insurance?

Yes, if you meet the eligibility requirements for the OMA Term Life plans G-3900 or G-29500, you may still apply for them.

Q: 25) Can I have both the existing OMA Term Life insurance and the new OMA Flex-Term Life insurance?

Yes, if you meet the eligibility requirements of each plan, you can have coverage under each; however, the total amount of coverage available under all OMA plans underwritten by New York Life cannot exceed $5,000,000.

Q: 26) Can my spouse get coverage even if I don’t, or if I apply and am declined?

You must either already be insured under an OMA plan or requesting coverage for yourself in order to request coverage for your spouse. However, if you are not already insured and you are declined for coverage, your spouse may still obtain coverage provided he/she meets underwriting standards.

Q: 27) When does coverage end?

Coverage for you and your spouse can continue until the August 31 coinciding with or next following the attainment of age 75 as long as (i) the required premium is paid when due; (ii) you maintain your membership in an eligible association; (iii) the group policy is not modified or terminated and (iv) if you are a medical student, you do not cease to be a full-time student without being otherwise eligible for membership in one of the eligible associations.

Q: 28) Can my corporation own the coverage or pay the premium?

You may transfer ownership of your coverage to your corporation that will then be responsible for paying the premium.

Q: 29) Can my children be insured as well?

The OMA Flex-Term Life plan only provides coverage for the member and his or her spouse.

 

 

Q: 30) What is not covered?

The benefit for death by suicide within the first two years is limited to the return of premiums paid. Coverage that has been in force for two years will not be contested for reasons other than fraud. A misstatement of your or your spouse’s eligibility for non-smoker status will render coverage voidable at any time. Please note that the two year incontestability clause starts anew each time you start a new 10 year level premium term. It does not start anew if you renew on the annual renewable basis.

Important Note:

This is a summary of the major features of the group insurance program under policy G-29700. Complete terms are governed by the group insurance policy issued by New York Life Insurance Company, Canadian Chief Agency, 2100 Scotia Plaza, 40 King St. West, Toronto, Ontario M5H3C2 on policy form GMR-FACE G-29700. New York Life has no right to cancel the group policy as long as premiums are paid when due.

Frequently Asked Questions about Professional Corporations for Physicians & OMA Insurance

Can a professional corporation own my life insurance policy?

Yes. Your corporation may apply for coverage on your life or your spouse’s life. If you already have an OMA life insurance policy you may transfer the ownership to your professional corporation.

Can a professional corporation be named as a beneficiary?

Yes.a) If your professional corporation is the owner of the policy, then typically your corporation is also the beneficiary. The beneficiary

you designate on your original application form may be changed whenever necessary by contacting OMA Insurance.

b) However, if you continue to own your policy and are considering making your professional corporation the beneficiary you should confer with your accountant to determine if there are any advantages to naming your corporation as the beneficiary of your

insurance.

Can a professional corporation pay for my life insurance premium?

Yes.a) If your professional corporation is the owner of the policy, then any premium paid should not be claimed as a tax deductible business expense.b) If you are the owner of your policy, any premium paid by your professional corporation should be included in your income as a

taxable benefit.

Can a professional corporation own my Disability coverage?

Disability Income coverage may not be assigned. Only you, the member, may apply for the coverage and you cannot transfer ownership.

Can a professional corporation pay for my disability insurance premiums?

While your professional corporation could pay the premium, unless you can show that the full premium was added to your income as a taxable benefit, any benefits paid in the event of a disability would be fully taxable as income. To ensure disability income benefits when received are tax free, all premiums should be paid by you personally. As well, any premium refund will be paid only to you, the member.

Can a professional corporation own my POE coverage?

No. POE coverage is not assignable. Only you, the member, may apply for coverage and you cannot transfer ownership.

Can a professional corporation pay for my POE premiums?

Yes. Since POE benefits are a taxable business expense, you may prefer to have your professional corporation pay your premiums. However, POE benefits, which are taxable but may be offset by eligible practice expenses, will be paid only to you, the member, as will any premium refunds.

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Life Insurance

Disability Income

Professional Overhead Expense (POE)

For more information please visit www.omainsurance.com or email: info@omainsurance.com

Some physicians have inquired about how claims might be adjudicated in the event of a disability with respect to determining earned income since the amount of salary being paid to the physician from the professional corporation may be lower than the actual income being generated by the physician.

Our disability insurer (Sun Life Financial) has well-established procedures in place to adjudicate the claims of physicians with incorporated practices. For the purposes of (a) establishing your eligible amount of disability coverage at time of application, and (b) calculating your entitlement to disability benefits at time of claim, earned income is calculated by totalling the amount paid to you by the professional corporation (salary and bonus) and the net income or loss before tax of the professional corporation which is attributable to you. Any investment income or loss in the corporation will be excluded from the calculation.

What about corporate dividends paid to a physician?

For the purpose of calculating eligible earned income, dividends are not considered earned income since they are paid from the professional corporation’s retained earnings. Dividends are just the distribution of the net income of the professional corporation which has already been included as income to you, as described above. Assuming the professional corporation’s only source of revenue is from personal activities performed by you, a change in status from a sole practitioner to an incorporated practice will not impact on either your eligible amount of disability income coverage at time of application or the calculation of your disability benefits at time of claim.

Please note that this document should not be construed as legal or financial advice. Consult your lawyer or accountant with any questions about Professional Corporations and/or the contents of this article.

Calculating Earned Income at Time of Claim

Frequently Asked Questions about Professional Corporations for Physicians & OMA Insurance

A Corporate income before owner compensation and tax 150,000 150,000B Physician’s draw (salary + bonus) 100,000 100,000C Net corporate income before tax 50,000 50,000D Physician’s actual dividends from retained earnings --- 20,000

Earned income for insurance purposes (B + C) 150,000 150,000 Physicians income for tax purposes (B + D) 100,000 100,000

Income for insurance purposes vs. for tax purposes Year # 1 Year # 2

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FAQ-300114