Life Insurance and Employee Benefits

Which of these three fits your situation?

• Personal life insurance

  Individually owned term or permanent life insurance, priced on personal health and age

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• Group employee benefits

  Health, dental, disability and life plans an employer arranges for its staff

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• Individual benefits

  Health and dental coverage owned by the individual, for anyone without an employer plan

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What is the difference between individual life insurance and group employee benefits?

Individual life insurance is a policy a person owns on their own life, priced on their own health and age, and it stays with them if they change jobs. Group employee benefits are arranged by an employer for its people, usually covering health, dental, disability and a base amount of life cover, priced on the group rather than the individual.

The two are commonly held together rather than instead of each other. Group cover typically ends when employment ends, and the base life amount inside a benefits plan is often a multiple of salary rather than an amount chosen against a household's actual obligations.

Sutherland Insurance arranges both, and both are licensed through the Financial Services Regulatory Authority of Ontario rather than through RIBO, which regulates property and casualty broking.

How does someone decide which of these three pages to start on?

Which page applies depends on who owns the policy and who is paying the premium. An individually owned life policy is chosen by a person insuring their own life. A group benefits plan is arranged by an employer for its staff and generally ends when the employment does. A personal health and dental plan is bought directly by an individual, commonly someone without an employer plan in place.

The three are licensed the same way, through the Financial Services Regulatory Authority of Ontario, and Sutherland Insurance arranges all of them from the same Guelph office. A household or a business that needs more than one of the three can raise all of them in the same conversation.

What is the difference between personal benefits and a group plan?

A group plan is arranged by an employer for its people and priced on the group as a whole. Personal benefits are owned by the individual, priced on their own circumstances, and stay with them regardless of employment. The two cover similar categories (health, dental, and often disability) but differ in who owns the contract.

The practical consequence is portability. Group cover generally ends when the employment ends; a personal plan does not. For someone whose work changes often, or who is building a business, that difference changes which of these three pages applies.