Dependent Life Insurance
Dependent insurance coverage is often a benefit included on employee group benefits plans, and is available for an employee's spouse and dependent children.
With group coverage, the employee is the automatic beneficiary, and the benefit amount is typically a lump sum that is higher for the spouse than for the children.
How It Works
Dependent life insurance is an employee-sponsored benefit that pays a lump sum of money to the employee if one of their dependents dies. Most often it comes as an add-on to a group life insurance policy received through the workplace, providing a flat-amount, guaranteed-issue death benefit that covers an employee's spouse or common-law partner and their dependent children. Because the benefit is structured as monetary protection for the employee, the employee is always the beneficiary. Eligible dependents include a spouse, whether by marriage or common-law, along with children under a specified age, with under 19 or under 21 being common cut-offs. Employees can typically enrol when first joining the company or after a major life change such as marriage or having a child, often within an enrolment window of up to 60 days following that event.
Example:
Picture a Canadian working parent enrolled in a workplace group benefits plan that bundles extended health, dental, and life insurance, who adds dependent life coverage for their spouse and children. The coverage is a flat, guaranteed-issue amount that did not require a medical exam for the children. If a covered child were to pass away, the lump sum is paid to the employee, who is always the beneficiary, and is intended to help with funeral and other final expenses rather than to replace income.
What to Watch For:
The primary purpose of basic dependent life insurance is to help cover immediate expenses such as funeral costs, not to replace a lifetime of income. Eligibility rules vary between plans. Under some group plans, such as Pacific Blue Cross, the covered person must be under age 65 and may need to complete a medical questionnaire. Some plans also offer a waiver of premium, so that if a totally disabled employee is approved for a waiver of premium under their own life insurance benefit, the premium for their dependent life insurance is waived as well.
