In the previous parts of this series (Part I, Part II, and Part III) we discussed the financial options in a typical termination package. Now let’s focus on group benefits and life insurance continuation.
Insurance Options
When you are actively working, your employer might offer you a group benefits package. The benefits range widely from one employer to another but yet cover very similar areas:
When your employment is terminated, you lose your group benefits. Even though your transitional period between losing one job and finding another could be relatively short, the need for health related benefits is permanent. You don’t want to receive a major medical bill when your regular income is not even there. You cannot afford to have a gap in coverage. There is a huge market for individual and family benefit packages. If you want to find one, you definitely will. However, it is important to shop wisely.
First steps to take
If you had group benefits at work, your termination package should clearly state when your benefits will terminate. Usually the date is far enough into the future to allow you to find an alternate solution. Be sure to mark the benefit termination date on your calendar, it is important.
If your spouse has group benefits at work, his/her employer should be notified about you losing the coverage. Then your spouse can complete the necessary paperwork to ensure you are covered as a spouse/dependent. IMPORTANT – Your spouse’s employer has to be notified within 30 days of your benefits terminating.
If your spouse doesn’t have group benefits, or there is no spouse, you have to analyze your insurance needs and decide what type of coverage you should start looking for.
A VERY IMPORTANT CONSIDERATION – you may qualify for an individual benefit package without a medical questionnaire and additional medical underwriting if you apply for within 60 days after losing group benefits. You don’t even have to go with the same insurance provider that supplied your group benefits. Any other major insurance provider will honour this 60-day period without the medical requirements rule. This gives you an opportunity to shop around. Now, let’s go over the major areas group benefits provide.
Prescription Drugs
Dental Benefits
Health Benefits
Life Insurance
Disability Insurance
Critical Illness
Now, with this in mind you are ready start shopping around for the ideal individual insurance package. There are quite a few variables affecting the price; all insurance companies apply them differently. That is why professional help is already included in all individual health, drugs, and dental packages – whether you use it or not. In other words, if you call your financial advisor and ask them to find the best price for your ideal package, he/she will give you the same price that you would have found on the internet yourself. There’s no additional cost or agent commission.
That is why, even if you are the type of person that changes the oil in your own car and manages ETF’s inside your own RRSP – it’s in your best interests to use professional help when searching for individual benefit packages.
This concludes my series on termination packages. Unfortunately, it is impossible to include and discuss all individual circumstances, benefits and features. The moment of lay-off or retirement often presents us with serious life challenges that nobody else but you can resolve. The termination package should NOT be one of them. There are people who can help you and allow you to focus on the important matters: spending time with your family, finding a new job, or even discovering a whole new path in life.
Changing your job status is not the end – it is a new beginning!
VLAD SOLOKHINE, CFP®
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