CAOGA Group Life Assurance Plan Renewal 01 September 2011

ARCOIreland Members, who are also Retained Members of CAOGA, will have recently received information from that society on the review of its Group Life Assurance Plan and the new benefits and premiums for the scheme.  (Click here to download details.)  These will come into effect on 1 September 2011.

Members will be aware that the Group Life Assurance Plan, or the Group Scheme as it also commonly known, was originally introduced in 1976 to supplement CAOGA’s own internal scheme.  This internal scheme, known as the CAOGA Friendly Society Scheme, is restricted by legislation in the level of the death benefits it can pay and over time has ceased to meet the real financial needs of members.  Membership of the CAOGA Friendly Society Scheme also ends at age 70.  The Management Committee of CAOGA renegotiates the Group Life Assurance Plan, membership of which currently ends at age 75, with the underwriters every three years in the light of the claims level experienced and the need to maintain and develop the scheme’s relevance.

The following background information is relevant to the current changes:

• The current economic downturn has placed severe financial strains on young officers, especially those with large mortgages and in many cases partners who have lost jobs.  This has resulted in an unwillingness by cadets to join the scheme and an exodus by young officers from it.  It is hoped the measures being undertaken by the Management Committee of CAOGA will reverse this trend.  ARCOIreland members will be aware of the vital financial assistance CAOGA provides to young families who have suffered bereavement.
• By 2014 the number of CAOGA members over 60 will have increased by almost 300%.  This will see the current figure of 599 rise to 1,747.  Those in the 70 to 75 age bracket will rise from 55 to 250, an increase of almost 500%.
• This could see the over 60s making up 48% of the society by September 2014 and demonstrates the need to continue to attract younger members to the scheme.
• Despite the relatively low claims experience among older members over the last three years, the brokers expressed the fear that claims would increase to an unsustainable level among the older cohort in the coming years.
• As a result they strongly recommended that an upper age limit of 70 should be set for membership of the scheme.  ARCOIreland fought hard to extend this scheme to 75 during the previous review of the plan in 2008.  Unfortunately the projected increase in the age profile did not support our case for its retention.  Nevertheless the Management Committee of CAOGA have agreed to retain membership up to age 75 for the next period of 3 years.  This has however resulted in a lowering of the sums assured.

ARCOIreland fully accepts that CAOGA is working in the best interests of all its members and that its priority must be to ensure that the age categories of greatest need are appropriately covered.  This is in line with CAOGA's primary objective: ‘to protect the long term financial security of the member’s family in the event of the death of a key member of the family’.  We can now only wait to see if the rate of claims among older members remains low so that an increase in benefits can be considered when the next review is undertaken in 2014.

Finally, we have included below the cost of cover from another leading insurer, which shows that even with this new agreement we are still getting value for money.