When you leave a group plan, what can you carry over, and is converting or buying fresh the better move?
How this works. Leaving a group plan triggers a conversion privilege: within
31 days you may convert some of your group life coverage to an individual policy with
no proof of insurability, but only up to a legal cap ($400,000 in Québec, $200,000 under the
CLHIA guidelines elsewhere), and group coverage rarely continues past age 65 anyway. Because the insurer skips
underwriting, a converted policy carries an adverse-selection loading, so it costs more than a
freshly underwritten policy would, if you are healthy enough to qualify. The chart
compares the yearly premium of each path so you can see when conversion is a bargain and when it is a backstop.
Educational illustration of standard Canadian insurance concepts. Figures are illustrative, not an insurer’s rates.
Illustration only, not a quote or advice. Figures are simplified for education and do not
reflect any specific insurer's rates. Consult a licensed advisor.