Is your Employer-Provided Insurance Coverage Enough?

Welcome back, and if this is your first time watching one of our videos, welcome for the first time. If you're familiar with our content, you know that we specialize in insurance and investment strategies for high-income professionals and business owners. Specifically, we set up life insurance, critical illness insurance, and disability insurance. It's become more and more common for employers to provide benefits to their employees. Because of this, many people wonder why they would need their own insurance, or whether the coverage that they have through work is everything that they need. Odds are that your employer-provided insurance is not enough, and in this video, we're going to be talking about some of those reasons why, as well as how you can opt out of or add on to your existing coverage. Many Canadians rely on their employer insurance to protect themselves and their families against unforeseen circumstances such as critical illness, disability, or even death. We've set these kinds of policies up for hundreds of companies, covering thousands of employees with all different variations, so we know these group benefits plans inside out. So while the employer benefits plans are valuable, and we totally recommend them, they might not provide enough coverage for you and your specific situation. To begin with, it's important to understand the Firstly, these policies often have limits on coverage, and they may not be sufficient for your specific needs. So for example, a critical illness insurance policy provided on a group benefits plan might only cover a limited number of illnesses, which would leave you vulnerable to something that's not covered on the policy. And because critical illness is usually a low priority for whoever set it up, they often just set up the minimum amount, like $25,000. And I mean, $25,000 is still better than nothing, but it's not usually the correct amount of critical illness insurance to cover a working Canadian adult with a mortgage and a family. And this is very concerning because according to statistics, the chance of you contracting a major illness during your working years of 18 to 65 is almost 50-50. So similarly, with disability insurance on your group plan, you might have limited coverage that would leave you without enough financial protection if something happens due to an injury or illness. So one of the main limitations on an employer provided plan is that the benefit payout period, so if you go on claim, is usually a maximum of two years. And when we set these up for clients individually, we normally set that up with a payout period that goes until you're age 65. So let's say something happens to you and you're not able to work for more than two years. Your employer plan would pay for two years and then it would stop, so it wouldn't cover you. So this means that you still have all your bills, you still have all your expenses, but you don't have your income, and your insurance has now stopped paying out. Not a good situation to be in. Another important factor to consider is that your employer provided insurance might not be portable. So this means that when you leave your job, you might not be able to take your benefits with you, so you'd lose the coverage that you had at your previous job. So let's say that you leave your job and you lose those benefits, and then you go get another job somewhere else. You'll usually have to wait your 90-day probation for your new benefits to kick in, which leaves you uncovered for a while. You also don't know if the new plan at your new job is going to be the same, or worse, or better than the old one. So if you go and you get your own disability insurance, this means that you're controlling it, and you're not tied to your employer's plan. Finally, it's important to note that the individual insurance needs, like your needs, might change over time. So as people age, and as your circumstances change, your insurance requirements will change. So employer-provided policies, the group plan, might not offer the flexibility needed to adapt to your changing needs. Getting additional coverage beyond your group plan makes sure that you can customize your coverage and you can meet your specific needs for your situation. Now, how difficult is it to opt out or to add on to your benefits through work? Well, it's pretty easy. So first, if you have benefits through work, you're probably paying for some of those benefits anyways through some sort of deduction on your paycheck. But you're getting what they give you instead of what you want. The disability insurance portion of your benefits probably is set up as employee pay for tax reasons. So it's pretty simple to opt out of that because it's a separate piece that you're paying for individually. Sometimes, if you have a really big company or like a union plan, those plans are a little bit more rigid and it's harder to opt out of. But if you're working for a smaller company, you can usually get out of it. The cost difference isn't that much. So it'll probably cost you very similar to whatever you're paying through your work plan anyways. You can also add coverage on top of your work plan. So what we do often actually is we'll set up an independent insurance plan that kicks in when your group disability plan stops. So say your group plan will pay out a benefit for two years, we can set up a disability plan that'll start on two years and one day. So you can use your group plan, but if you're sick or injured for longer, your own plan would kick in and at a very reasonable cost because we've got such a big waiting period up front. We also highly recommend that you set this up earlier as it's usually more affordable the younger that you are. Plus, as you get older, you can always add more coverage if you're still insurable. So that's it for now. Please like, hit subscribe, leave a comment if you've got a question, and share this video far and wide. All those things that the robots love so that this video will spread out to more people. And if you're interested in setting up your own coverage outside of your work group plan, fill out the contact form on our website. It'll be in the link below and somebody will get back to you within 24 hours on business days to set up a consult and see what your options are. That's it for me and I will see you next time.