If you're an employer or an employee, group insurance is a good thing. For employers, a group insurance plan helps strengthen compensation packages making it easier to recruit and retain quality people. For both employers and employees, a group plan provides a sense of security because everyone covered by the plan knows that they have insurance protection in place if something unexpected happens. Or do they?
As an employer or employee, assurance that your group benefits plan will deliver the coverage and services you need when you need them is important. The goal of a group insurance plan is to help ensure that every employee has access to a range of benefits. Members of a group insurance plan are compensated when they require medical services, subject to the terms of the contract. Employers and employees share in the cost of the insurance coverage which helps to ensure affordability amongst participants. Group insurance packages vary, but may include:
Life insurance
Accidental death and dismemberment
Dependents insurance
Short-term disability
Long-term disability
Extended health care
Dental care
Critical illness
Out-of-country medical coverage
An employee assistance program
Do you know exactly what your group plan covers and what it doesn't? If not, start by carefully reviewing your group benefits booklet to discover whether or not your plan:
Covers all your sources of income such as bonuses and commissions, or whether or not caps exist that reduce the maximum benefits payable to a total amount, limit the benefit period, or that restrict compensation to a specific income source.
Is indexed to address inflation rates.
Premiums will increase dramatically over time, depending on the age and health experience of your group.
Is cancellable.
Has a restrictive definition of disability and/or other limitations and exclusions. For example, pre-existing conditions, soft tissue damage, or mental/nervous disorders.
Includes a long waiting period before benefits kick in.
Group plans are attractive but often are not tailored to fully address each individual's unique needs. Review your group plan with your professional advisor to determine if you need to top-up your protection to preserve your finances with a personal, portable plan that is always yours regardless of your employment situation.
- Managing Your Money, written and published by Investors Group Financial Services Inc. and Investors Group Securities Inc., presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances.
