What is Group Accident Insurance in Canada?

Group accident insurance can be a valuable part of an employee benefits package. It promises financial help to your employees and their families in the event of an accidental injury or death. Here’s what you need to know. 

Key Takeaways: 

• Group accident insurance is a cost-effective to support your employees
• It covers accidental injuries and death
• These plans are customizable, with most offering coverage to the insured’s dependents free of cost
• Group accident insurance may or may not be portable, depending on the insurer

What is group accident insurance?

Group accident insurance, also referred as group personal accident insurance, covers your employees for accidental injury or death. Coverage goes beyond work-related injuries. The plan pays cash benefit irrespective of how or where an accident happens. This is different from life insurance, with offers coverage for more than just accidents.

The plan will pay either regular payments (e.g. a monthly benefit) or one-time payment. The employee or their dependents can use the money to cover various expenses, including but not limited to: 

• Hospitalization
• Medication
• Home adaptations and home care services
• Rehabilitation

Group accident insurance typically also offers Accidental Death and Dismemberment benefits (AD&D), which provides financial benefit to the employee in the event of accidental death or severe injury (in the form of dismemberment). 

What Does Employee Accident Insurance Cover?

Although coverage details vary by insurer, most plans cover accidental injuries such as: 

• Concussions
• Fractures
• Coma
• Knee cartilage
• Burns
• Internal injuries
• Ruptured disc
• Ligament ruptures
• Dental injuries
• Dislocations
• Death

These plans cover medical expenses that an employee incur following an accidental injury. The list of approved medical expenses include: 

• Hospitalization
• Doctor visits
• Ambulance
• Emergency room services
• Medicines
• Rehabilitation 
• Medicines
• Surgical procedures

How does group accident insurance work?

The employer decides the coverage details, like coverage amount, coverage period, and add-ons. The employer is also responsible for paying the premiums on time. 

The cost of group accident insurance, however, is usually shared by the employer and the employee, though some employers offer the basic coverage free of cost. Any top-up coverage added to the plan is paid by the employee. Some accident group insurance plans cover an employee’s dependents automatically while others require you to purchase this benefit separately. 

Group accident insurance plans may or may not be portable, depending on the coverage details. A portable policy is one that you won’t lose even if you leave the employer. 

You can make a claim if you are injured in an accident. In the event of accidental death, your beneficiary must file a claim to receive the benefit amount, which is paid either in a lump sum or monthly payments. 

The claim amount is usually paid within days to a few weeks, but the exact time it takes can vary. You can use the benefit amount for anything you want. Aside from paying for medical costs not covered by health insurance, you can use it to pay for home adaptations, home care, child care, daily living expenses, mortgage or rent, and more. 

What are Group Accidental Death and Dismemberment (AD&D) benefits?

Group AD&D coverage provides financial assistance if a worker is seriously injured or dies in an accident. The plan document will include the exact definition of what is regarded as “accident”. Generally speaking, it is defined as an unexpected, sudden event that results in serious injuries or death. 

These plans are fairly customizable. Common customization options available are: 

• Total disability: It pays out a lump sum to an employee if they become totally and permanently disabled and are unable to perform their work duties. 
• Family coverage: There’s usually an option to extend coverage to the employee’s dependents. Depending on the insurance carrier, this benefit may be included in the default coverage or offered as a paid add-on. 
• Hospital benefit: It pays either a lump-sum amount or a monthly benefit if, as a result of an accident, you are confined to a hospital. The monthly benefit amount is usually 1% of your AD&D coverage, up to a certain maximum amount. Most insurers pay the monthly benefit for up to a maximum hospital stay of 12 months. 

Main features of group accident insurance in Canada

Principal group accident insurance is designed to act as a safety in the event of accidental death or injuries. Main features include: 

• Hospitalization benefit: Pays the costs for medical hospitalization expenses arising out of injuries sustained in an accident.
• Accidental death coverage: Pays a fixed sum in the event of accidental death. The benefit amount is paid to the person or persons designated by the insured as their beneficiary or beneficiaries on the policy document. 
• Accidental dismemberment benefit: Issues a specified sum in the event of dismemberment resulting from an accident. 
• No waiting period: Coverage kicks in immediately after the payment of the first premium. 
• Disability benefits: Pays income replacement benefits if the insured person loses the ability to work due to accidental injuries.
• Emergency evacuation: Covers the cost of transporting the insured to the nearest qualified medical facility.
• Repatriation insurance cover: Covers the cost of transporting the insured person’s bodily remains back to their area of principal residence.  
• Family benefits: Depending on the insurer, the group accident insurance may include benefits such as childcare benefits. 

How much does group accident insurance cost?

The cost of group accident insurance cover depends on various personal factors about your staff and coverage details. 

• Group profile: The insurer will take into account the group size and median group age to determine the premium rate. Insuring larger groups is cheaper than insuring smaller groups. As far as median group age goes, the higher it is, the more you’ll pay for coverage. 

• Policy cease age: This refers to the age of an employee when the plan stops covering them. The higher the cease age, the costlier the premiums are. Typically, the policy cease age is set to 65, which is also the standard retirement age in Canada. 

• Claims history: Insurance carriers consider your group’s claim history when deciding the cost of accident insurance. Specifically speaking, a poor claim history may lead to higher premiums. 

• The level of cover: Policies that provide higher levels of coverage are more expensive than basic plans. 
• Type of occupation: The occupation of your company and employees affects the premium cost of group accident insurance. If the occupation of your employees involves high-risk factors, the cost of coverage will go up. For example, employees of a construction company, who often work with heavy machinery and face a greater risk of accidental injuries, are likely to encounter higher premium costs compared to employees of a software firm. 
• Add-on benefits: Add-ons, also known as riders, are extra benefits that are added to a base policy to provide additional benefits or protection. Employers can opt for various add-ons to make their group accident insurance plans more well-rounded. However, these add-ons come at a cost. 

Who pays for group accident insurance?

Typically, the employer pays most or all the premiums for basic coverage. Additional coverage amounts, however, are usually paid by the employee through payroll deductions. 

Why get group accident insurance for employees?

As an employer, offering a comprehensive benefits package is the best way to demonstrate that you care about the health and wellbeing of your employees. One of the most valuable benefits you can offer your workers is group accident insurance. It offers them financial security when they need it most.

Here are some compelling reasons to get group accident insurance for employees: 

• A group plan covers more than 100 common injuries
• Group accident insurance also provides accidental death and dismemberment coverage
• It involves minimal underwriting 
• Employees can add their dependents to their policy
• It covers mental health issues if they’re the result of an accident
• It provides wellness benefits during the rehabilitation period

What are the differences between group accident insurance and personal accident insurance? 

While both types of coverage provide a financial safety net in the event of death or serious injuries due to an accident, there are key differences between them. 

• Group accident insurance is considerably cheaper than a personal plan. This is partly because the employer often bears part of the premium cost and partly because the risk is spread across a larger number of individuals. 
• Group accident insurance is typically less flexible. It’s your employer, not you, who decides if the policy will have any add-ons and which ones they will be.
• Employer-sponsored accident insurance cover is often tied to the job. If you leave or lose your job, coverage ends. In contrast, a personal accident insurance cover is not tied to your employment status. 

How to set up a group accident insurance plan for your employees?

Offering group accident insurance is one of the most cost-effective ways to support your employees (and their families). Here’s how you can set up a plan that your employees will value. 

• Find out the needs of your employees 
• Decide the coverage amount 
• Compare pricing and offerings of multiple providers 
• Decide the premium payment plan that works best for you and your team
• Choose specific add-ons like disability rider, long-term care rider, accidental death rider, etc.

Conclusion

Group personal accident insurance is a type of insurance that protects employees of an organization from the financial impact of accidental injuries and death. It can provide a range of benefits, including coverage for medical expenses, hospitalization, and more.

At Dundas Life, we understand your business is unique and so are your requirements. We’ll work with you and help you set up a customized group accident insurance plan at an affordable price. Book a free call with one of our licensed advisors today.

FAQs

What is employer-sponsored group accident insurance? 

It is a voluntary benefit that provides financial support to employees and their families in the event of an accident. 

Why offer group accident insurance coverage?

In today’s unpredictable world, it is crucial to protect against unforeseen accidents, particularly for organizations and their employees. Group accident insurance cover serves as an essential safeguard, providing financial security, cost-effective coverage, peace of mind, and robust protection against accidental injuries or death. 

What are the benefits of group accidental insurance?

Group accidental insurance offers your employees comprehensive protection against accidental death or injuries. It covers a wide range of injuries, regardless of where an accident occurs. Other benefits include minimal underwriting and the option to add dependents to the plan, often for free. 

How much cash benefit does group accident insurance pay?

How much financial benefit an employee will receive if they are injured or die in an accident depends on the coverage level chosen by their employer. Read the policy document to find out the policy sum assured and other important coverage-related details. 

Is coverage the same for all employees?

Generally, yes. But coverage details may vary from one group plan to another, so check the policy wording. 

Are part-time employees covered? 

Typically, most employers in Canada offer this coverage to only their full-time employees. But some plans cover all employees, including part-time employees and seasonal workers.