News and Updates

Life insurance and conversion options when employment ends

If you have coverage under an employee group benefits plan, you or your plan sponsor pay premiums for life insurance. But do you know what type of life insurance you have and what happens to your coverage when your employment ends? 

What type of life insurance do I have under my plan? 

The life insurance you have under your employee group benefits plan is called term insurance. The amount of coverage you have and your rates are subject to change, but this insurance covers you for eligible life claims for a limited time while you are actively at work or on an approved leave of absence, provided premiums continue to be paid.  

What happens to my term group life insurance coverage when my employment ends or when I retire? 
When your employment ends or when you retire, your term group life insurance will be cancelled. You may be eligible* to convert your term group life insurance to an individual life policy directly with the insurer, Manulife. Keep an eye out for an email from OTIP after your coverage ends about your eligibility for life insurance conversion. 

If you convert within 31 days of your coverage ending, evidence of good health or a medical exam will not be required. Converting your group life insurance to an individual life insurance plan helps you avoid these potential roadblocks and guarantees your acceptance for coverage. 

What happens to my group life insurance coverage when I reach the age of 65? 

When you reach the group benefits plan age limit, your group life insurance coverage will be reduced*. Coverage reduces by 50% at age 65. 


Life coverages you can convert 

For employee group benefits plan members, you can convert the following coverage to an individual policy: 

  • Member Basic Life: The benefit amount ends when you retire or your employment ends. Coverage reduces by 50% at age 65. 

  • Member Optional and/or Spousal Optional Life: This coverage can be converted to an individual life policy. You will have 31 days from your retirement/termination date to apply. 

For Child Optional Life, the benefit amount ends when you retire and cannot be converted unless you are a resident of Quebec. 

If your insurance needs have changed, you can choose to convert only part of your group life insurance coverage to suit your current lifestyle. (For Quebec residents only: the minimum amount required for conversion of a plan member’s coverage is $10,000, and of a spouse or dependant’s coverage is $5,000). 


Factors to consider when converting


Life insurance rates are determined by the insurer, and premiums for the individual life policy are typically much higher than when you were covered under the group benefits plan. Premiums can be reviewed on page 2 of the Group Benefits Life Conversion Options form (found under Life Insurance forms). After reviewing the premium rates, if you are still interested in converting your group life insurance, you can contact OTIP Benefits Services to get started. 
Existing health condition 

If you have an existing health condition and do not think you can get an individual life insurance policy elsewhere, conversion may be your best choice. We encourage you to look at other life insurance options before you retire. 


What you need to do 

Once you have reviewed the individual life insurance rates and would like to start the conversion process, complete these steps: 

  1. Contact OTIP Benefits Services. We will complete the plan sponsor information section of the Group Benefits Life Conversion Options form and send it to you (NOTE: This step can take up to five business days). 

  1. Once you have received the completed plan sponsor information section, please fill out sections 2 and 3 of the form. 

  1. Send to Manulife as directed on the form. Manulife will contact you directly on the status of the application. 

If you need help with reviewing and calculating the premiums, you can contact Manulife Customer Service Centre at 1-800-268-6195. Be sure to tell them that you are calling about the group benefits life conversion option. 

*Life insurance offerings can vary by plan. To verify which coverage is available to you, please check your benefits booklet or contact OTIP Benefits Services for more details. 

  News and Updates