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Supplemental Life Insurance Explained: Coverage, Costs, and More


Life Insurance Policy Terms of Use Concept

For every employee in Canada, their organization provides a group life insurance that provides coverage for you and your family.

However, this group life insurance does not fully cover enough coverage as you may have expected.

When you are signing a joining contract with your firm or organization, you may stumble up on a piece of paper called Supplemental Life Insurance.

Supplemental Life Insurance is not something that most people are familiar with. You might think that all insurance policies have the same sets of rules and regulations, but this is not the case.

Let’s dive deeper and understand the prospects of Supplemental Life Insurance.

Working of the Supplemental Life Insurance

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It is recommended that a life insurance policy should be at least ten times more than the annual income of a person.

  • In the case of a regular life insurance policy (group policy provided by your company or organization), a death benefit is provided by your employer that gives out just 1 or 2 times your annual salary.
  • Supplemental Life Insurance comes to play right here.

The Supplemental Life Insurance coverage is added to your group policy provided by your company.

  • If your employer provides only a base plan of group policy, a supplemental life insurance policy will be provided for an additional amount that is deducted from your pay.
  • The supplemental insurance policy gives a larger payout than the base group policy and covers additional things like funeral expenses.

Having a supplemental policy will give you and your family much-required peace of mind and a healthy lifestyle.

If you plan to get insured by the supplemental policy through your employer, you must know these things:

  1. Your choices may be limited, according to your employer.
  2. Your employer might also limit the amount of coverage that you can buy.
  3. Types of coverage available

Every organization or employer provides different policies and prices, so do not assume anything and do your research intensely.

Is Supplemental Life Insurance Different Than Term Life Insurance?

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Both life insurances go hand in hand with each other and cannot exist without one another.

  • This supplemental life insurance is an additional form of term life insurance.
  • Depending on the policy that covers you, the term life insurance can cover several things.
  • Term life insurance generally covers 1 or 2 times your salary, while supplemental life insurance can cover up to 8 times your salary.

Supplemental life insurance covers several things like:

  1. Funeral insurance coverage
  2. Accidental death coverage
  3. Dismemberment coverage
  4. Domestic or Spouse partner coverage

This insurance policy gives you an extra helping hand when your family needs you the most (after your passing).

Having policy coverage will help your family and loved ones financially in the darkest hours of their lives.

Is Supplemental Life Insurance Worth Buying?

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The most imperative factor that lets you know whether you must opt for supplemental life insurance or let it go is your preferences and circumstances.

For Single and Non-Dependent Members of a Family

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The circumstances and preferences for a healthy single, whose family is not dependent on his income, differs from a person having a spouse and if he is the dependent member of the family.

  • Your term life insurance provided by your employer is enough in this case, but you can go for personal life insurance.

For Married and Dependent Members of a Family

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If you are getting old, are married, and are a dependent member of a family, supplemental life insurance might be worth it.

  • However, you must know that the rate provided by your employer might be lower than private life insurance options.

You must research well and get quotes from a private life insurance provider and employer.

Important Tips

Before choosing a supplemental policy, you must research well and choose the option that suits your financial needs the most.

  • If the coverage of your employer is well enough,    you can choose to disregard this additional coverage.
  • If the coverage is not well, scroll through different policy options and choose the best supplemental policy.

You must also know that employer-based insurance is not portable (your policy will not be continued if you change your current employer).

  • If you plan on changing your employer, consider going with whole life insurance or a private term policy as they give more value in the long term.

Factors Associated With the Cost of a Supplemental Life Insurance

Like every policy, a supplemental life insurance policy considers several factors while giving a cost or a premium.

  1. Age
  2. Health Condition

If you go with your employer’s policy, you could get a cheaper rate as it is a group policy.

A private service provider is advised for people going on individual basis.


With no medical exam required to buy a supplemental life insurance policy, it is best if you want to give your family some financial help after your passing. It will help your family get the peace of mind if anything happens to you.

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