Group Term Life InsuranceGroup term life insurance in Canada is usually part of a comprehensive Group Health Insurance plan. The term insurance remains in force until the plan member (employee) is no longer part of the group (ie not employed there) or until they reach age 65 at which time it expires or reduces by half. Upon leaving the group or retirement, the group insurance plan member may convert the plan to an individually owned plan with the life insurer that insures the plan. The policy will be guaranteed to issue regardless of health but the premiums are based on attained age (the age you are when converting to a private plan). This can be surprising for the insured as it is more expensive to buy life insurance at age 65. The benefit is a good one though. For a nominal amount paid by either the plan sponsor (employer), or member, the insured has life insurance on their life. Quite often the coverage is also provided on the spouse and children of the insured too. If the group is more than just a few employees the basic amount of coverage is provided without medical evidence. This can be a very valuable benefit for an employee with a medical condition or a spouse at home with a medical condition. They will greatly appreciate the coverage. The benefit amount is usually a flat amount. $25,000 – 50,000 on the employee, and up to $10,000 on the spouse and children. Sometimes the benefit amount is a multiple of salary (ie 1-4 times salary). All in all group term life insurance is a valuable benefit to provide for a low rate.
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