Fire district to cut off-duty life insurance

Fed up with watching costly insurance premiums drain their coffers, Fire District 7 officials have opted to cancel the district’s off-duty life insurance policy and simply pay for the benefit out of the general fund.

The district’s off-duty life insurance, a separate policy from its on-duty death and disability insurance, costs approximately $7,000 a year to maintain. The insurance pays a maximum $10,000 benefit and covers 200 district employees — mostly career and volunteer firefighters.

However, because the insurance only pays if the covered individual dies in a non-work-related incident, payouts have been rare.

“We’ve had one payout in the last 11 years,” said Fire Chief Mike Brown. “If I were in (the insurance) business, I’d say that was a good deal.”

In fact, most of the payouts on the off-duty insurance have been for disease-related, not accident-related, deaths. The one payout Brown referenced was for an employee who died of cancer.

The on-duty insurance, Brown said, is a much better value.

The maximum benefit for that policy is $75,000 and, due to the nature of the job, is much more likely to be needed. It also pays injury and disability benefits, which the off-duty policy didn’t.

“That’s (employees’) biggest risk,” Brown said. “They have a better chance in our profession of being injured on the job than off.”

Fire District 7 attorney Rick Gross said the decision to move from insurance-covered to department-covered off-duty benefits is not all that unusual. He said it was a common-sense issue — why pay for insurance when you are financially able to cover the payouts yourself?

“If they could go three years without a payout, they could bank enough to cover the benefit,” Gross said.

Even if there is an unexpected early payout or two, Gross said the district’s multi-million dollar budget always factors in extra money for such contingencies. Nevertheless, Gross doesn’t anticipate the change-over from insurance to become much of an issue.

“It always amazes me there’s not more payoffs in life insurance,” he said. “But people are tough — they don’t die easily.”

Because there are no legal issues inherent in making a death benefit payable by the employing department, Gross said it would simply be a matter of adding the occasional pay-out into the regular budget and paying for it out of the general fund.

The district’s board of commissioners is expected to enact the change at the next commission meeting, scheduled for Nov. 14.

Gross said the district is committed to getting making the change official as soon as possible because, since the off-duty policy was canceled, the district currently has no coverage in that area.

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