Lauren has been a client of ours for many years, and as tragic as her story is- it is one that we see time and time again. Lauren was only a young teenager when her father got diagnosed and passed away from a very common cancer. Lauren’s family originally thought that work benefits from her father’s employer would be enough to cover all costs in the event that something would happen to either of them. Unfortunately for them, this is rarely the case. 

Life insurance through your employer is used as a worm on a hook; its main objective is to reel in the worker and have them be enticed enough by the “package” so that they sign the contract and begin working for the company. Simply put, it’s only a shiny perk. There are a few reasons as to why it should be viewed as such. 

First off, work benefits usually only cover 2-3x the workers salary. The average Canadian household has a requirement of around $400,000 of life insurance coverage; this number should allow the average family to cover: the mortgage, any loans and outstanding debts whilst still leaving the remaining spouse (or family members) money left over to handle the grief of losing a family member. 2-3x the average salary is no where near the actual amount a Canadian family needs. The second reason as to why you should never rely on work life insurance coverage (and this is the main reason)- is because your employer will typically do their underwriting after the death has occurred. Which means, when you sign your work contract, there is quite a lot of fine print (that no one ever reads), and at the moment you try to make a claim, i.e. your spouse has passed away- that is when the company will begin their checks to see if you and your family qualify for a payout. In the event that your spouse does not meet all of the criteria labelled in the fine print, your family gets nothing. Unfortunately, this is a norm with work benefits and was the case for Lauren.