Your work life insurance is 2× salary. Is that enough?

Two times your salary sounds substantial — until you look at what group life insurance actually is. Work coverage has three structural problems: you don't own it, it doesn't follow you, and for most households with dependants it's a fraction of the real need. None of that makes it bad. It makes it a bonus, not a foundation.

Your employer holds the policy; you hold a certificate under it. Basic coverage — typically set as a multiple of salary — is usually issued without health questions, which is genuinely valuable if your health would make individual coverage hard to get. Optional amounts above the plan's threshold generally do require evidence of insurability. The plan's terms, reduction schedules and caps live in the employer's booklet, and the employer can change carriers or cancel the plan; none of it is under your control.

Three plan features worth locating in your own booklet. Optional (supplemental) life lets you buy multiples above the basic amount — usually with evidence of insurability past a threshold, which means a health change can close that door while the basic amount stays open. Dependent coverage for a spouse or children is often available in small units at group rates. And most plans carry an "actively at work" style condition — coverage details can differ if you're off on leave or disability when a change takes effect, which is exactly when you least want surprises. None of these are secrets; all of them live in a document most employees have never opened.

If your employer pays the premiums for group term life insurance, the CRA treats those premiums as a taxable benefit — the amount shows up in your income via your T4. It's rarely a large number, but it surprises people every February, and it means your "free" coverage isn't quite free.

Coverage ends when employment does — termination, retirement, or dropping below the plan's eligibility hours. What remains is the conversion privilege: the right to convert your group coverage to an individual policy without medical evidence. The window is short. The CLHIA's Guideline G3 sets the industry minimum: apply within 31 days of your group life coverage ending, and the insurer should offer at least conversion to an individual term policy. Your own plan may offer more, and Quebec legislates its own conditions. Miss the window and the right is gone permanently — after that, it's the open market with full underwriting.

Two honest notes on conversion. First, converted policies cost more than group rates — you're paying individually, at your current age, often into a permanent product. Second, if you're healthy, a freshly underwritten term policy on the open market usually beats conversion on price. Conversion is the lifeline for people whose health has changed; it's rarely the bargain for people whose health hasn't. Check your plan's amount caps and eligible products in the booklet — they vary.

What conversion typically offers is also worth knowing before the clock starts: many plans convert into permanent products or one-year term-to-permanent bridges rather than cheap long-term coverage, which is part of why converted premiums surprise people. The conversion right's value isn't price — it's guaranteed acceptance. Price is what the open market is for, while you can still pass its questions.

Run the arithmetic against what the money must do. Two years of income replaces two years of your paycheque — but a household with young children may need income replaced for a decade or more, plus the mortgage cleared or serviced, plus childcare, plus debts and final expenses. Against that list, 2× salary is a down payment. There's no universal multiplier that answers this — rules of thumb fail specific households in specific ways — but the direction is consistent: for anyone with dependants and a mortgage, group coverage alone almost never closes the gap.

Make it concrete with round numbers. A $90,000 earner with 2× coverage leaves $180,000. If the household needs even five years of that income replaced, that's $450,000 before touching the mortgage — and a $400,000 mortgage balance on top makes the arithmetic $850,000 against $180,000 of group coverage. Change the inputs to your own numbers and the shape rarely changes: the group benefit covers the first year or two of a ten-year problem. That's not a criticism of the benefit; it's a measurement of it.

Keep the group coverage — it costs you little or nothing and stacks on top of everything else. Then own an individual term policy sized to your actual need as the base you control: it doesn't care who employs you, its price is locked for the term, and nobody can cancel it but you. Group life then does what it does well — supplement. The failure mode worth avoiding is treating the number on your benefits statement as the plan.

Ten minutes with your benefits booklet answers the four questions that matter:

• What's my basic amount, and is there a reduction schedule at 65?
• How much optional coverage can I add without evidence of insurability — and have I added it while healthy?
• What are the conversion terms — window, age limit, amount cap, eligible products?
• What happens to my coverage on leave, on disability, and at retirement?

How much coverage your household actually needs is a personal calculation — and a conversation for a licensed life insurance advisor. This article is educational, not individual advice; plan terms vary, and your employer's booklet governs.