Is life insurance through your workplace benefits enough?

Key takeaways

There are many reasons why you may need additional coverage from your workplace life insurance.
Adding personal life insurance coverage can help ensure your family and financial security is protected.
You can see how much this might cost per month by getting a quick quote online.

What is employer-provided life insurance?

If you have workplace benefits through your employer, often they will include life insurance to help employees in case the unexpected happens by providing financial support for their families.

Workplace life insurance coverage usually equals 1 or 2 times your annual pay and may offer several advantages:

The premiums usually cost less than personally-owned life insurance and could potentially be deducted from your pay.
You’re typically covered as soon as you’re eligible for workplace benefits.
Acceptance is guaranteed without answering medical questions.
It’s simple to apply.

The need for additional life insurance coverage

Regardless of whether you’re single and live in rental accommodation, or have a partner and family and own a home, you should consider all the things that your workplace life insurance death benefit may have to pay for:

Funeral costs (potentially thousands of dollars)
Debts including credit cards, mortgage, automobile and other loans
Housing costs, including 1 or 2 months rent and costs to remove your belongings, or ongoing costs for home repairs and maintenance
Income replacement for a period of time to support your family
Education costs for your children

According to the Canadian Life and Health Insurance Association | PDF 4.5 MB, the average life insurance protection per household in Canada is $483,000, but your advisor can help you determine the amount of life insurance that’s right for your situation.

Some options to consider may be term life insurance or permanent life insurance.

Term life insurance provides temporary coverage at a lower cost than permanent life insurance. It offers fixed payments and a option to convert to permanent life insurance.

Permanent life insurance provides lifetime coverage at a higher cost than term life insurance. It offers flexible payments and an opportunity to build cash value. There are 2 types of permanent life insurance, participating life insurance and universal life insurance.

Additional reasons for more life insurance

Your job situation changes – Usually, your workplace life insurance will end if you lose your job or change employers. However, if your workplace benefits are through Canada Life, you may be able to keep your coverage with Freedom to Choose^TM insurance.
Declining health – Often as we age our health gets worse. If you suffer a health issue that forces you to leave your job and lose your life insurance coverage, personal life insurance can help protect your family’s financial security.
Your spouse/partner isn’t covered – If your workplace life insurance doesn’t provide coverage for your spouse or partner, you’ll want to consider purchasing a separate policy.

Other additional insurance coverage to consider

While most workplace benefit plans also include critical illness and disability insurance, you should consider whether the coverage is sufficient for your situation. If not, you’ll want to consider purchasing your own critical illness or disability insurance.

What’s next?

Talk with your advisor about life insurance and how much coverage you need.
Get a competitive quote on Canada Life My Term™ life insurance.

The information provided is general in nature and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.