Life
Insurance For Accountants and CPA's
As financial professionals, certified public accountants
realize and understand the importance of owning life insurance
to protect their families and businesses. Most accountants
carry large amounts of life insurance and especially term
life insurance. Many take advantage of coverage offered
through associations such as the American Institute of
Certified Public Accountants, the AICPA.
While the AICPA plan is convenient and has advantages,
it's not always as affordable as other options and has
a few other drawbacks. The following information will provide
a general overview of the AICPA life insurance program.
AICPA Term Life Insurance Overview
The AICPA group life insurance program is underwritten
by the Prudential Insurance Company of America in Newark,
New Jersey. The AICPA plan is available to all association
members as well as members of other qualified organizations,
such as the State Society of Certified Public Accountants.
In order to secure coverage through the AICPA plan, you
must reside in the U.S., Puerto Rico, the Virgin Islands,
or Guam.
AICPA Term Life Insurance Policy Limits
The AICPA offers term life insurance protection up to
$2,000,000 if you are under age 55 and are a member of
both the AICPA and the State Society of CPAs. If you are
not a member of your State Society, you are only eligible
for $1,500,000 of coverage up to age 55.
Upon reaching age 55, coverage limits begin to decrease.
At 55, the maximum coverage will be $1,500,000 from ages
55 to 64 and $1,000,000 from 65 to 69 and $500,000 from
age 70 to 74. At age 75, your insurance amount will be
reduced to 25% of existing coverage or $250,000 whichever
is less. All AICPA coverage terminates at age 80.
Term Life Insurance Costs with the CPA Association Plan
The CPA term life insurance plan offered by the AICPA
has two different rate classes for determining policy cost:
the select class and the standard class.
With either class the rates increase every five years beginning
at age 30.
The select class rate class or preferred health class
is available for eligible participants between the ages
of 45 and 79. In order to qualify, you must prove your
health by disclosing and making available your past medical
history and information. The savings at the select class
rates can be as much as 40% depending on your age.
In order to continue to qualify for select rates, you
must submit evidence of your good health every five
years to continue to receive the select class rate. If
satisfactory proof is not submitted or you are unable
to prove your continued good health, your policy cost
will be based on the standard rate. Select rates for
the current AICPA plan can be found at the AICPA
website.
Standard rates require minimal proof of health. The answers
to simple medical questions will determine whether or not
you can qualify. The insurance costs for the standard health
class are anywhere from 25% to 40% higher than select rates.
Regardless of the select or standard
health class, life insurance costs under the CPA life insurance
plan increase every five years beginning at age 30. Cost
increases are based upon a schedule that can be found on
the AICPA
life insurance website.
Actual cost may be changed
by the Prudential Life Insurance Company of America each
plan year. However, if rates are increased, they must be
increased for the entire age and class and not for a specific
individual or group.
AICPA Life Insurance and Premium Refunds
The AICPA insurance plan offers a non-guaranteed cash
reimbursement feature. All premiums received from AICPA
life insurance plan participants and their spouses go directly
to Prudential Life Insurance Company of America. Out of
the total premium pool, death claims are paid and expenses
and fees are deducted. At the end of each plan year, cash
refunds or return of excess premiums may be paid by Prudential
Life to the AICPA trust account. The trust account then
reallocates refunds back to AIPCA plan participants. While
this premium refund option is not guaranteed, premium reimbursements
have been paid from this AICPA trust account to plan participants
since 1957. For more information on how the refunds are
paid, see the schedule for AIPCA insurance trust
refunds.
Other AICPA Insurance Plan Options
Life Insurance policy riders are available
under the AICPA plan and include accidental
death and dismemberment and waiver
of contributions,
also known as disability waiver
of premium.
Additionally, the AICPA plan offers an accelerated
benefit option at no cost. The benefit allows
current policyholders that have been diagnosed with a
terminal illness the opportunity to receive a portion
of the insurance amount (currently 75% of the death benefit
up to $1,000,000) prior to death. Any proceeds received
are then deducted with interest once the claim is settled.
Finally, the CPA term life insurance plan under the AICPA
plan also provides for conversion
privileges that
allow a covered member to exchange the term life coverage
for a permanent life insurance policy offered by Prudential
without proof of health. While the cost to convert is usually
expensive, this is a very valuable policy feature that
protects insurability.
In addition to term life insurance, the AICPA insurance
plan also offers spousal term
life and
member and spousal group variable universal life. For more
information on these plans, see the AICPA website.
Conclusion
The AICPA life insurance plan, underwritten by Prudential
Insurance Company, offers solid term life insurance coverage
to its members and their spouses. However,
while the plan is good, in many cases it is not always
competitively priced and has some major limitations. For
a custom price comparison, get a quote
here or call
MEG Financial today at (877) 583-3955. You can
also get more information about the AICPA life insurance
plan by visiting the links below.
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