Top

As of 1 October 2005, the CAR will no longer be available to releasing members and the new Insurance for Released Members (IRM) plan will be introduced in its place. Current CAR participants will have the option of:

• staying in the CAR plan and maintaining the option of taking a paid up certificate (PUC) equal to 10 percent of their coverage at age 65. Premium rates for the CAR plan will increase 20 percent effective 1 March 2006;
• transferring to the new IRM plan, which has lower rates for most age categories and new Accidental Dismemberment (AD) coverage for dependent children , but does not provide a PUC; or
• transferring a portion of their CAR coverage to IRM and have their PUC option reduced accordingly.

The CAR is no longer available and the IRM is introduced on 1 October 2005. For current CAR participants who stay in CAR the new premium rates will take effect 1 March 2006. IRM premium rates will be effective 1 October 2005.

As a CAR participant you will receive a letter in October 2005. You will have until 1 December 2005 to make your decision. If you elect to change to IRM within this time period, your new IRM premium rates will commence following receipt of your decision. If your IRM premium is lower than the CAR premium paid during the decision period, a credit towards future premium or reimbursement of the difference, retroactive to 1 October 2005, will be provided by the end of December 2005.

*In order to be eligible for these subsidized rates you must be 50 years of age or older on 1 March 2006 and have had Optional Group Term Insurance (OGTI), Reserve Term Insurance Plan (RTIP), Survivor Income Benefit (SIB), General Officers Insurance Plan (GOIP) or Reserve General Officers Insurance Plan (Res GOIP) for five years or more.

If you choose to stay in CAR, your premiums will increase by 20% on 1 March 2006 according to the table above.

On your certificate anniversary date following your 65^th birthday, you will have a choice to either:

• take the PUC amounting to 10% of your coverage and cease paying premiums; or
• continue your coverage, or any part thereof to your 75^th birthday.

You will not be able to transfer back to CAR. In the case where you transfer to IRM by 1 December 2005, your new IRM premium rates will commence following receipt of your decision. If your IRM premium is lower than the CAR premium paid during the decision period, a credit towards future premiums or reimbursement of the difference, retroactive to 1 October 2005, will be provided by the end of December 2005.

If you are a CAR participant and wish to increase your coverage after 1 October 2005, the additional coverage must be purchased under the IRM. Please note that the combined amount of coverage on one individual cannot exceed $400,000. If you decide to have both, you will make one payment for both premiums.

The increase in coverage will fall under CAR and you will have to choose between the three options stated above in #1.

Yes. The $100,000 in CAR will have the 20% increase in premium and at age 65 you will have to choose to take the $10,000 PUC or continue your coverage to your 75^th birthday. The $100,000 you transfer to IRM will have the IRM premium rates. If you decide to do this, you will make one payment for both premiums.

Yes. Whether you choose to transfer to IRM or stay in CAR, you will need to complete the form included in your package.

If you neglect to submit the form by 1 December 2005, you will automatically remain in CAR and have a 20% increase in premium on 1 March 2006.

Yes, you can transfer from CAR to IRM at any time. However, you will only be eligible for the reimbursement of the difference between IRM and CAR premium rates if you transfer to IRM by 1 December 2005.

If you have submitted an application for CAR that is currently pending and your effective date of release was prior to 1 October 2005, you will be considered a CAR participant and will have to choose between the three options stated above in #1. If your effective date of release is after 1 October 2005, your application will be treated as an IRM application.

No, if you are paying by electronic fund transfer or pension deduction, the appropriate amount will automatically be debited.

If you already paid the premium for the year, a reimbursement of the difference, if applicable, will be mailed to you. If your premiums increase, Manulife Financial will inform you of the additional amount required.

If you re-enrol in the CF, you will need to apply for Optional Group Term Insurance for Regular Force members or Reserve Term Insurance Plan for Reserve Force members within 60 days of your re-enrolment date to avoid having to provide medical evidence. When you retire from the CF you will need to transfer your existing coverage to IRM (CAR will not be available) within 60 days of your effective date of release.

You will have the option of:

• taking the PUC amounting to 10% of your coverage on your anniversary date and cease paying premiums;
• continuing your CAR coverage, or any part thereof to your 75^th birthday; or
• transferring to IRM.

In the package you receive from Manulife Financial, your options will be outlined and a form for choosing to take the PUC will be included.

No, additional medical tests will not be required if you transfer your existing CAR coverage to IRM.

The IRM premiums are among the lowest in the insurance industry for comparable coverage. IRM does not require proof of insurability in order to obtain the lowest possible rates, upon renewal.

The IRM also has fewer of the limitations and exclusions found in other optional term life insurance plans available in the insurance marketplace, such as:

• No exclusions for dangerous occupations, hobbies, volunteer activities or sports; and
• Claim payments are guaranteed, even if you die while serving in a theatre of operations.

A recent review of SISIP FS term life insurance plans determined that the future of the CAR insurance plan was not financially viable in its current structure as a result of the plan's premium deficiencies and its benefits , such as the PUC, for which the premiums were never adjusted.

CAR premiums have not increased in over 15 years and the current CAR premiums would need to increase by 77 percent to make the plan cost neutral. An increase that significant would not be practical to implement due to the negative affects it would have on plan participants. Consequently, it was decided to develop a solution that will give current participants three options to ensure they can maintain coverage and that will enable SISIP FS to fulfill its obligation of financial stewardship of the plans and its responsibilities towards the CAR participants. The choices are broad enough that all participants should be able to determine the best balance of coverage that will provide value and peace of mind for them and their families.

The CAR premiums for these age brackets were the most deficient and the IRM rates will help make the program cost neutral.

The financial situation of the CAR plan will be assessed again in five years.