What Is Group Insurance?

Group Insurance | Covenant Wealth Financial Services

Group Insurance is one of the most tax effective mechanisms that employers use to provide health benefits to their employees and their families. It is also a great way to boost total compensation. Recognizing the changing demographics of their work force and the factors, such as mental health, which often affect their employees overall health and productively, wellness programs and employee assistance programs are also becoming core benefits on a group plan.

Benefits covered by a typical Group Insurance Plan include:

  • Basic Life Insurance

  • Dependent Life Insurance (Coverage for spouse and children)

  • Critical Illness Insurance

  • Accidental Death and Dismemberment
  • Short Term and Long-Term Disability

  • Health Benefits (Prescription drugs, professional services such as physiotherapy, massage therapy etc.)

  • Dental coverage

  • Travel Insurance

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How Does It Work?

Although Canadians are covered under a government sponsored health care program, there are some health-related expenses that are simply not covered. An employer-sponsored group plan will normally cover most health-related expenses that are not covered by OHIP. A company that is considering implementing a group insurance plan would contract with an insurance company to insure their plan members as well as to perform the various administration function of the plan such as paying claims, etc. Group Insurance Brokers or Benefit Consultants are also hired to support the employer in providing group quotes and other responsibilities.

What Are The Benefits?

Advantages for Employees

  • Alleviates the worry of unexpected medical emergency

  • Demonstrates concern for the welfare of the employee and their family

  • Reduces or eliminates the need for an employee to use after-tax income to purchase individual health insurance plans

  • No need for the employee to provide evidence of good health

  • Group insurance is typically less expensive than individual insurance because the risk of loss is pooled among the entire group

Advantages for Employers

– A healthy workforce means increased productivity and revenues!

  • Costs paid into a group insurance program are considered a tax-deductible business expense

  • It is a great HR tool for attracting and retaining the right talent

  • Providing employee benefits for employees generally leads to a healthier workforce because employees have access to medical services when they need it usually at a lower out of pocket cost (depending on plan design)

Most employees view group insurance as more valuable to them than a pay increase. This can be delivered at a lower cost which is better for company’s bottom line.

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