Frequently Asked Questions
What happens to my group insurance when I leave my job?
Employer group life, disability, and health coverage usually ends when you leave the company. Many group life plans include a conversion privilege that lets you convert to an individual policy without medical underwriting, but the window is short, often 31 days after coverage ends, and the converted policy can be expensive. Check your benefits booklet before you leave so you know your deadlines and options.
Are disability insurance benefits taxable in Canada?
It depends on who pays the premiums. If your employer pays the premiums for a group disability plan, the benefits you receive are generally taxable income. If you pay the premiums yourself with after-tax dollars, the benefits are generally not taxable, so it is worth checking how your plan is funded when estimating what you would actually receive.
How much life insurance do I need beyond my employer coverage?
Group life coverage is often a flat amount or a small multiple of salary, which may not match your family’s needs. A common way to estimate need is to add up debts such as the mortgage, years of income your family would need to replace, future costs such as children’s education, and final expenses, then subtract savings and existing coverage. A financial advisor can help you run the numbers and decide how much personal coverage to hold on top of your workplace plan.
Why should I own personal insurance if my employer already covers me?
Employer coverage is tied to your job and controlled by your employer, who can change the plan, reduce benefits, or raise costs. A personal policy stays with you if you change jobs, become self-employed, or retire, and premiums are based on your age and health when you buy it. Buying while you are younger and healthy can lock in coverage that might be harder or more expensive to get later.
About the author
Contributing Writer, Wealthtender
Derek Condon is a Certified Financial Planner and Mortgage Advisor specializing in financial planning, investments, wealth-preserving insurance, mortgages, and others.
Derek helps his clients with a variety of goals. From someone who is just starting their investing journey to a retiree managing their wealth. From a first-time home buyer to someone refinancing to get their very best mortgage. And everywhere in between.