Taking care of its workers is a task that every good employer must fulfill. It goes far beyond providing a job and a living wage. An excellent way to take care of your employees is to include benefits such as benefit programs.
By “benefit programs” we mean the type of coverage that guarantees the economic, personal and even emotional well-being of workers. Good examples of this are: health services of different categories (general, dental, children’s), assistance programs (EAP) and one that we will delve into today: life insurance.
Life insurance has been popular for a long time and you probably know about it in a very superficial way. As an employee benefit program, they are perfect – what could be better than guaranteeing financial stability for employees and their families in adverse events?
So, if you want to learn more about this topic, we invite you to read on. Do you want to learn how life insurance works in Canada and other issues? From Lewer, experts in employee benefit programs in Canada, we will explain everything in detail and in a clear and brief manner. Without further ado, let’s get started!
Life insurance for beginners: clarifying basic concepts
To discuss this topic, we will need to start from the basics. Therefore, we clarify that we will take into account a few considerations. The first of these is that we will focus on how life insurance works in Quebec, which is the region that concerns us.
It should also be noted that there are many types of life insurance (temporary permanent, without medical examination, etc.). However, for practical purposes, we will refer to them here simply as “life insurance”.
Now, well, to answer how life insurance works in Canada, we will refer to the articles set out in the Civil Code of Quebec, while explaining some generalities. Pay attention:
1. What is life insurance?
The question may seem a bit absurd, but, as we said before: it is best to start with the basics. Life insurance is a type of contract between two parties: an insurance company and a natural person. This agreement is governed by a contract called a policy.
The idea of the insurance is to guarantee economic stability for the insured or for third parties that the insured decides to include, in case of claims. That is, in case of adverse situations such as serious illness or even death.
The policy sets out the conditions and benefits of life insurance to which the insured person (in legal terms called “policyholder”) will have access if everything is fulfilled as specified in the policy.
The Civil Code of Quebec, in its article no. 2393 mentions the following: “Life insurance guarantees payment of the agreed amount upon the death of the insured; it may also guarantee payment of the agreed amount during the lifetime of the insured, on his surviving a specified period or on the occurrence of an event related to his existence”.
2. How do I purchase life insurance?
Purchasing life insurance is very simple. It is advisable to contact an insurance broker, explain what you wish to purchase and he/she will be able to help you find a product that suits the needs of the potential insured. The advantage of this is that brokers work independently from insurance companies.
Once the desired life insurance product is found, it is enough to extend the policy and comply with the conditions it establishes. If it is life insurance as a company benefit program, it becomes even simpler, as it will most likely be included as part of the employment contract.
The Civil Code of Quebec states that “life insurance takes effect when the application is accepted by the insurer, provided that it is accepted without modification, that the initial premium has been paid, and that there has been no change in the insurability of the risk since the application was signed” (article no. 2425).
3. Payment of life insurance in Canada
And how is the payment of life insurance in Canada made? It is easy, this is determined by the policy with what is known as premiums (already mentioned in the previous paragraph). The premiums are nothing more than the payments that must be made according to an established time: monthly, quarterly, annually, etc.
On this subject, the Civil Code of Quebec is clear: “In life insurance, the policyholder is entitled to 30 days for the payment of each premium, except the initial premium; the insurance remains in force during the 30 days, but failure to pay the premium within that period terminates the insurance.
The period runs concurrently with any other period granted by the insurer, but it may not be reduced by agreement” (article no. 2427).
Importance of having a life insurance policy
“Why is life insurance important?” many people ask. The answer is obvious: having a backup in case of adversity can help us in unimaginable ways. So it never hurts to consider it.
Many people are terrified of having to pay premiums on an ongoing basis, but in the long run it is something that could be of great benefit to us. As people say: it’s better to be safe.
One thing you should keep in mind is to inform yourself properly before making decisions. As we have said, there are different types of life insurance and not all policies are the same. The best thing to do is always to look for the right one. We have already explained how!
So, is life insurance worth it? The answer is a big, resounding yes. If you are an employer and you have doubts about whether to include these services in your company, we invite you to read another article in our blog: 3 reasons to hire benefit programs in your company. Click here to learn more about them.
Looking for good employee benefit programs in Canada? Lewer has the solution!
If you have come this far, you have been able to learn a lot about how life insurance works in Canada, its benefits, among other generalities. We hope that this article has been helpful and that you have a clearer idea, whether you are an employer or an employee.
As you can see, having benefit programs in your company and, above all, life insurance should be a fundamental aspect. Remember, taking care of workers is paramount and it works and helps not only as an incentive, but also in other issues such as fostering a sense of belonging and commitment.
Want more information about Lewer’s employee benefit programs in Canada? Click on the link to learn more. You will find options ranging from extended health programs to more specific programs such as dental care.Are you clear on what a taxable benefit is? Do you have any questions or would you like to contract any of these services in your company? Contact us. You can find the option on the top bar of this site. Also, for a more personalized attention, you can visit us at 3131 boul. Saint-Martin Ouest, bureau 410 Laval, Quebec!