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Insurance AOA Group Insurance Plans

Insurance AOA Group Insurance Plans. Sam Pierce, O.D. AOA Trustee April 29, 2010. What is it?. Risk Management A hedge against your risk of a loss The goal is to transfer the risk from you to another entity. Insurance companies assume the risk for a fee (premium). The Basic Principle.

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Insurance AOA Group Insurance Plans

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  1. InsuranceAOA Group Insurance Plans Sam Pierce, O.D. AOA Trustee April 29, 2010

  2. What is it? • Risk Management • A hedge against your risk of a loss • The goal is to transfer the risk from you to another entity. Insurance companies assume the risk for a fee (premium)

  3. The Basic Principle • “Law of large numbers” • As the number of exposures units increase, the results are likely to become very close to the expected • Other than Lloyds of London, most insurance companies only insure where there are large numbers of people or property to be insured • Las Vegas operates under the same principles

  4. Criticisms of Today’s Insurance Companies Just a business with a single goal of making money Insurance companies (underwriting) refuse to insure those at high risk, which is “counter” to the principle of insurance Too many exclusions – read the fine print Most companies have gone to call centers (out of the country!?!) and there is no personal service

  5. Some numbers to consider • Life Expectancy in the USA • 1900 - 47.3 years • 1950 - 68.2 years • 2000 - 77.0 years • 2004 - 77.8 years

  6. More numbers to consider • If you make it to 65 • You are likely to live another 18.7 years to 83.7 years of age • If you make it to 75 • You are likely to live another 11.9 years to 86.9 years of age

  7. So much for death, what about becoming disabled? • The “odds” of becoming disabled depend on several factors • Age • Health condition • Occupation • At age 42, you are 3 times more likely to become disabled than die

  8. “Personal” Insurance • Life • Homeowners • Auto • Health • Disability • Long term care • “Other” • Accidental injury • Cancer

  9. “Business” Insurance • Business overhead expense • Disability • Short term and long term • Professional liability • Fire & Casualty

  10. This can be a bit complicated! What is the AOA group insurance department? It is a group of individuals (staff and volunteers) who do nothing but look after the AOA group insurance products Group insurance is less expensive than individual policies (the law of large numbers)

  11. AOA meets with, argues with, and negotiates with underwriters and brokers to get the best deals • This is an AOA member benefit---and getting better!

  12. AOA Sponsored Insurance Program Short term medical – between coverage? Hospital help – cash up to $500/day Accident Protection – cash for being in an accident Long term disability – 60% of earned income Term life coverage

  13. More sponsored plans Business Overhead Expense – coverage for fixed expenses Cancer care – cash for treatment Long term care Emergency Assistance – coverage while traveling Secure Start Plan – coverage for your children

  14. Professional Liability Insurance(PLI) • Number of liability claims paid from 1990 to date (National Provider Data Bank) • Medical physicians 232,727 • Osteopathic physicians 14,733 • Dentists 40,261 • Podiatrists 6,618 • Optometrists 580

  15. Professional Liability Insurance(PLI) • PLI rates are based on actual experience plus a reasonable profit for the carrier • AOA’s endorsed PLI plan • $540 per year for $2 million in coverage! • Average premium for an ophthalmologist (in 2003) was $15,000 per year

  16. Optometry’s rate is actually less than some non-doctoral allied health professionals (nurse practitioners and physician assistants)

  17. Term Life Insurance • Term life insurance coverage is available up to $750,000 • Cost: for a $500,000 benefit (policy face amount) • if under age 30, the annual premium for a non-smoker is $360.

  18. Long Term Disability • For a member age 30 unable to “perform the duties of an optometrist” the monthly benefit is $4,500 • This is the maximum benefit for a person earning $90,000 annually • The benefit may not exceed 60% of earnings

  19. Annual premium is $409.92 • Premiums are the same for males and females • Premiums may be paid monthly, quarterly, semi-annually, or annually • Maximum income replacement = 60% of earnings up to $6,000/month.

  20. My recommendation to you Each and every time you are faced with an insurance decision, check with the AOA first You are likely to find that once all things are considered, group insurance through your professional association will be the best value for your money

  21. Questions? www.aoa.org

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