Employee Benefits and Life Insurance
Along with group health insurance, group life insurance is a common benefit that you may receive from your employer. However, it is important to thoroughly investigate whether this coverage is going to be sufficient for your life insurance needs. If the coverage that is being offered is based only on your salary, it probably will not be enough to provide complete financial protection for your beneficiaries.
Since the group coverage offered through your employer is free, it makes sense to accept it. However, it is important to calculate how much coverage you will need to have in order to sufficiently pay your existing debts and provide for your family. Group life insurance is usually calculated based on your annual salary, usually around 1.5 percent. Read through your policy to fully understand just what your coverage will be. If this amount is not enough, you will need to purchase additional coverage.
Additional coverage can be purchased either in the form of term life insurance or whole life insurance. Term life insurance, while usually cheaper, expires at the end of a certain time frame, and has no cash value. This is a good policy to buy if you need insurance for a specific debt, such as a mortgage. Whole life insurance does not have a time frame, and as long as the premiums are paid, will never expire. Whole life insurance also has a cash value, which can be useful in planning your finances.
Talk to your agent about your group life insurance policy, and whether or not it is providing enough coverage for your needs. You can always purchase additional coverage to top up the group policy, and thereby ensure that your family and loved ones will be provided for. If you are unsure about the amount of life insurance you require, contact one of our licensed Canadian brokers to determine your needs 1-866-369-4474