TRAVERSE CITY -- Northwestern Michigan College's president recommended scrapping his own proposal to double his life insurance policy to $1 million, citing higher-than-anticipated premiums.
College trustees during a study session Monday publicly backed away from the possible increase to NMC President Tim Nelson's current life insurance policy.
Under the existing contract, $500,000 would be split between the college and Nelson's beneficiaries upon his death.
"I thought it was too expensive," Nelson said of the $1 million plan.
The policy, as it stands today, costs NMC $1,375 annually to Great American Life Insurance Company of Ohio, according to the college's human resources staff.
Raising it to $1 million would have cost $8,350 a year on top of that, paid for five years to Prudential Financial. The figure then would drop to annual payments of $3,350 for the next 15 years.
Trustees are considering other amendments to Nelson's contract, set to expire in 2011, including the amount of vacation days he can accrue.
A draft contract was included in a packet e-mailed to the Record-Eagle Friday. The draft was not changed to reflect Nelson's request to stay with his $500,000 plan.
Instead, amendments were attached to the back of the draft without a separate cover or any text to indicate what they were. The Record-Eagle published a story Sunday about the $1 million policy proposal.
"Because of the various revisions going back and forth, they just wanted to present them in their entirety," NMC spokesman Paul Heaton said. "I don't think it was entirely clear, and we take responsibility for that."
Trustee K. Ross Childs, who leads a committee looking at Nelson's contract, said he learned at least two weeks ago how much it would cost to raise the policy to $1 million.
Nelson told him in passing that he wouldn't recommend an increase given the rates.
Nelson said he didn't account for the cost increase that resulted from his 2006 prostate cancer diagnosis, since he had surgery and now is in remission.
"I was operating under the assumption that it would not be significant," Nelson said. "I didn't realize that would have the impact on price that it did."
The other trustees learned of Nelson's suggestion last week when the board packet was released to both the trustees and the media, Childs added.
"Our trustees found out about it the same time," he said. "There's nothing unusual about this."
Trustee Cheryl Gore Follette was absent Monday, but no action was taken at the study session. The next regular meeting is Nov. 24.
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