Life insurance through your employee benefits plan is a great perk—but relying on it alone could leave your family underprotected.
As of the most recent data available, LIMRA’s Canadian Life Insurance Ownership Study indicates that 44% of Canadian households own individual life insurance, while 49% have group life insurance through their employers. Notably, 25% of households possess both types of coverage, suggesting that a significant portion relies solely on one.
- It’s likely not enough. Group life coverage is usually just 1–2 times your salary—hardly enough to pay off a mortgage or support a family long-term.
- It’s not portable. Lose your job or retire, and your coverage likely disappears.
- Conversion is costly. Most group plans offer conversion to personal coverage, but options are limited and expensive.
Three Types of Life Insurance: Know the Difference
- Permanent Insurance – Own it. Offers lifelong protection, builds cash value, and can be fully paid up over time—like building home equity.
- Term Insurance – Rent it. Affordable for temporary needs like raising kids or paying off a mortgage. Premiums increase at renewal and usually there is no cash value.
- Group Insurance – Borrow it. Tied to your employer’s contract. If they cancel the plan, you lose your coverage.
What’s the Smart Strategy?
Start with a foundation of permanent insurance for lifelong protection and potential cash value. Then layer on term insurance for mid to short-term needs like raising a family or covering debts. Treat your group insurance as a bonus, not a foundation.
Want to ensure your life insurance actually works for your family? Let’s talk. And feel free to share this with anyone you think would find it of interest..