Hello;
Getting covered through your employer can be inexpensive and convenient.1 (Empire Life Oct 2014). Relying solely on the life insurance you have through your employer can pose potential problems. Here are 5 key questions to consider:
1# Is your employer-provided life insurance coverage enough to take care of your family if you die while employed?
Most employers offer a basic amount of coverage. Employers who offer life insurance benefits typically offer coverage equivalent to 1 to 2x the employee’s income. It is a good benefit to have, but it’s below what the average person needs. According to insurance statistics, the average Canadian has much less coverage that is truly needed. The average is 3.9x (annual income) vs what’s needed at 7x to 12x.
2# If your job changes, will you still have the life insurance?
When you stop working for a company, the employer stops paying the life insurance coverage and it ends, unless you are able to convert it to an individual policy. The converted policy may be more expensive than if you had purchased an individual life policy when you were younger.
3# Will you still have life insurance coverage if you experience health issues?
Another problem arises if you leave your job because of a health problem. If you relied heavily upon your employer provided life insurance, and then suffer a medical condition that forces you to leave your job, you may lose your life insurance coverage for the reasons above, just when your family needs it the most.
4# Does your employer-provided life insurance plan provide coverage for your spouse?
Employer’s benefits package may provide life insurance for your spouse, but in many cases the coverage is minimal.
5# Does employer-sponsored life insurance provide the most affordable life insurance option?
Some employer provided life insurance plans allow employees to buy a certain amount of additional coverage. However, you may need to go through a medical review to qualify for the extra life insurance, and it could be more expensive than purchasing a separate, individual policy. If you are healthy and a non-smoker, buying an individual life insurance policy outside of your work might be cheaper than buying additional coverage through your employer, and you can choose the plan that best fits your needs.
Having both an individual life insurance policy and an employer-provided life insurance plan could be the best combination. Your individual life insurance policy can allow you to have the amount of coverage that you truly need, to add any extras that you consider necessary for your personal circumstances, and to have lifelong coverage, regardless of your employment situation.
For more information on this, please let us know if you require further information.
Sincerely,
Mike Busby (15-Sep-2022)
THE COMMENTS CONTAINED HEREIN ARE A GENERAL DISCUSSION OF CERTAIN ISSUES INTENDED AS GENERAL INFORMATION ONLY AND SHOULD NOT BE RELIED UPON AS TAX OR LEGAL ADVICE. PLEASE OBTAIN INDEPENDENT PROFESSIONAL ADVICE, IN THE CONTEXT OF YOUR PARTICULAR CIRCUMSTANCES. THIS ARTICLE WAS WRITTEN, DESIGNED AND PRODUCED BY MIKE BUSBY FOR THE BENEFIT OF MIKE BUSBY WHO IS A FINANACIAL ADVISOR FOR BRANDON LINDSAY INSURANCE AGENCIES, A TRADE NAME REGISTERED WITH INVESTIA FINANCIAL SERVICES INC., AND DOES NOT NECESSARILY REFLECT THE OPINION OF INVESTIA. THE INFORMATION CONTAINED IN THIS ARTICLE COMES FROM SOURCES WE BELIEVE RELIABLE, BUT WE CANNOT GUARANTEE ITS ACCURACY OR RELIABILTY. THE OPINIONS EXPRESSED ARE BASED ON AN ANALYSIS AND INTERPRETATION DATING FROM THE DATE OF PUBLICATION AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. FURTHERMORE, THEY DO NOT CONSTITUTE AN OFFER OR SOLICITATION TO BUY OR SELL ANY SECURITIES. MUTUAL FUNDS OFFERED THROUGH INVESTIA FINANCIAL SERVICES INC.
