Does Your Group Insurance Need To Be Topped Up?

Guest post by

Group benefits are a great perk, and may even be a reason you choose one role over another during your job search, or whether you decide to stay in your current role rather than test the job market. It’s why many employers offer an attractive benefits package to satisfy the needs of their employees and stay competitive in the job market.

That said, employees can lead dramatically different lives – especially when it comes to their insurance needs. New grads in their early 20s will have different insurance needs than their coworkers in their late 30s with a mortgage and kids. While group benefits administrators do their best, it’s impossible to offer to each employee the customized insurance they might require.

In these cases, one should consider the situations where topping up or augmenting group insurance with separately purchased insurance may be the right thing to do.

Here are three ways you may choose to top-up, and why.

Life insurance

Topping up your life insurance is the most common way through which employees augment their group benefits. Group life insurance is an excellent way to get initial coverage, especially for those starting their careers. It’s affordable, convenient, and not dependent on medical underwriting to obtain.

However, when individuals experience life changes, like marriage, parenthood, and purchasing a home, they soon realize these new dependents carry with them a greater need for financial protection. Group life insurance, at one to two times annual income coverage, may now seem inadequate. By assessing your needs, and what your loved ones would require in lieu of your income, you can determine your life insurance shortfall and plan accordingly. Be it a house, kids, partner, debt, aging parents, or any other financial obligation – identifying your dependents’ needs, and in turn your obligations, will help you determine how much more life insurance you may need.

The easiest way to do this is with term life insurance. Term insurance is flexible; it’s available in different term lengths (hence the name) though typically at 10 or 20 years or up to the retirement age of 65 and amounts ranging from the $10,000 to millions of dollars.  Depending on your age and health, it can be an inexpensive way to provide your loved ones the financial cushion required to lead the same quality of life in the unfortunate event of your passing.

The reason it is relatively inexpensive is because it’s life insurance for a discrete period of time. Unlike whole life insurance where the payout is guaranteed, in the case of term insurance an insurance company can estimate the probability of a claim being made and can therefore charge you for the pure cost of insurance for that limited period of time. 

While non-medical life insurance options exist, medically underwritten options are usually cheaper as an insurance company is able to make certain there isn’t too much risk involved in insuring your life and then passes those savings along to you.

Benefits 101: Defining Common Insurance Terms

Find insurance terms confusing?

Click here to learn more.

Disability insurance

Your group benefits may include disability insurance as well. This is a great perk, and good to know your employer has your back should something happen to you while you are working for them. The only disadvantage is that you have very little control over the coverage and terms – group disability insurance typically runs out after 90 to 120 days. In cases where longer term disability insurance is offered within the group plans, the threshold for assessing disability payouts may be higher. What happens if you want more or better disability insurance coverage? 

Individual disability insurance is another way to top up your current coverage. While you do pay the premiums yourself, that also means you dictate how it works. 

This includes what occupation classes it covers, the benefit amount, the waiting period, the disability definition, and much more. With this amount of control, you can tailor a disability insurance policy that perfectly augments your existing coverage. 

Critical illness insurance

While group insurance covers a wide gamut of what life might throw at you, there are some situations it simply does not cover. Critical illness insurance is a relatively new product (from an insurance perspective – insurance companies are some of the oldest businesses in the world), and thus not typically offered by employers within the confines of group benefits. 

Critical illnesses are actually quite common in Canada; there are in excess of 200,000 cancer diagnoses a year and 50,000 strokes. Thankfully, survival rates for these ailments are increasing, but the recovery can still be daunting and require massive changes in your lifestyle and day-to-day needs. Critical illness insurance is designed to help with just that.

It provides you with a one-time lump sum payment should you contract one of the policy’s covered conditions – usually serious or terminal health events. The payment is yours to use however you see fit, though it is implied that one can use it to aid in their recovery, retrofit their home to make it more accessible, or any other use that accompanies the needs of a serious illness.

A few last things to keep in mind

As mentioned before, you pay for extra individual insurance yourself – though there are often opportunities to augment your coverage through your employer’s provider as well – sometimes at a discount.

There are positives to topping up your coverage which applies to all insurance types.

Payments from individual insurance are tax-free – since you already paid your premiums, with your after-tax income.

And lastly, insurance you take out yourself is portable. In the case where you change jobs or careers, you still keep your insurance that you are paying for. It’s not contingent on your employment or enrollment in your group benefits program. is an innovative Canadian online insurance broker providing a digital solution to an archaic industry, combining modern technology, intuitive design, and real-world expertise to make insurance buying simpler, straightforward, and stress-free. Visit to access our free online insurance calculators and find out how you can save money when comparing and buying insurance online.