So you’ve landed a job with benefits — kudos! Even better, as part of that package, you’re covered by a group life insurance policy. Now you don’t have to worry, right? Not necessarily — the insurance provided by your employer may not provide you with the amount of coverage you ultimately need, at least, not according to surveyed Canadians .
It’s a good idea if your life insurance policy lands somewhere between five and seven times your net income.” —Canadian Life and Health Insurance Association
Q: If I have a group life policy through work, why do I need more life insurance?
A: Having more insurance is like having more friends to rally around you during a breakup — you can’t really have too many shoulders to lean on. Whether you’re single or married, you’ll want to know exactly what your employer covers so you understand what financial support is available to you in a worst-case scenario.
Q: How can I tell if the life insurance provided by my employer is enough?
A: Let’s say you make $60,000 per year and the life insurance from your employer covers $60,000 to $120,000. That adds up to one or two years of coverage. Seems like a decent payout? Truth is, it may not be enough.
Don’t worry, you don’t need to do all this math. Just use this tool to help you find out what you need.
Q: I’m young and healthy, so I don’t need critical illness insurance, right?
A: We hate to be a downer, but the Canadian Cancer Society states that two out of every five Canadians develop the disease at some point in their lives. That’s where critical illness comes in — if you’re diagnosed with a type of cancer covered by your policy, you’ll get a lump-sum payment to help you with your expenses, which can be crucial if working isn’t an option.
Something else to keep in mind: While you’re young and healthy, it may be a good time to get critical illness insurance. Because as you age, it could become tougher to get critical illness insurance coverage, as well as potentially cost more.
Q: And if my employer provides disability insurance? I don’t still need critical illness coverage, do I?
A: This is one you may want to think about. With disability insurance, you’d likely get a certain percentage of your income while you’re unable to work (think income replacement so you can still pay bills like your mortgage). Critical illness is financial support to help with the costs of a serious illness (think medical bills for treatments not covered by government health insurance).
Jago Financial Inc
1095 W Pender St #1188,
Vancouver, BC V6E 2M6
(Courtesy of BMO Insurance)