Mar 272012
 

For the 9th year in a row, VGLI members will receive a contribution holiday. The duration of this year’s holiday is four months. The VGLI premiums for the months of March, April, May and June, 2012 will be paid for by the USFA VGLI Trust Fund.

The USFA is the sponsor of the VGLI plan and Manulife Financial is the plan carrier. This contribution holiday is possible because the USFA Executive established a Trust Fund in 1998 to ensure that any rebate of premiums would be used for the benefit of VGLI plan members.

The USFA hires an experienced Consultant to negotiate yearly plan renewal terms. There is no change in the cost of premiums for this insurance for the upcoming year.

Positive plan experience and premium refunds have allowed a surplus to build up. The Association invests any plan refunds under a Trust Agreement that permits the Association to use these funds to offset premium increases and to ensure that the premium rates for the life insurance remain competitive. We have also used the surplus to provide premium holidays for plan members.

The first use of the VGLI Trust Fund was to provide premium holidays to members in 1998 and 1999.  The trust funds have also been used to pay deficit recovery charges. Since 2003, the trust fund has been used to fund various yearly premium contribution holidays amounting to savings for each member in excess of one year’s premiums!  Last year, the VGLI Trust fund paid for a five month premium holiday.

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