Being self-employed comes with greater flexibility and freedom. You decide your working hours, where you want to work, what you want to do and reap all the rewards of your hard work.
However, no amount of flexibility and freedom can protect you against life’s unforeseeable events such as illness or disability.
Thus, insurance is one of the major things you can’t afford to ignore as a self-employed Canadian.
Imagine a situation where you’re unable to work because of an accident, illness or any unfortunate circumstance. How do you meet your personal and family needs?
Insurance protects you against injury, illness, accidents, and other potentially life-changing events that might ruin your financial security.
However, there are different types of insurance for self-employed Canadians. So how do you choose the perfect one?
Here I discuss different types of self-employed insurance policies in Canada, factors to consider when looking for the best insurance and how to get started.
What is Self-Employed Insurance?
Self-employed insurance refers to an insurance policy tailored to the self-employed. Whether you run your own business or operate as an independent contractor or a freelancer, this type of insurance is for you.
That said, self-employed insurance includes multiple kinds of coverage ranging from health, critical illness, disability etc.
Like other kinds of insurance, you’re expected to apply for self-employed insurance and pay a monthly premium and other fees to get coverage.
However, not all insurance policies as there are different insurance providers with different terms and conditions.
So before you buy an insurance policy, there are fundamental things you need to know to make the right decision.
As you continue reading, you will understand the features of the best insurance policy and where to get them in Canada.
What are the Benefits of Self Employed Insurance?
The benefits of self-employed insurance can’t be overemphasized. The following are the major benefits:
1. Cover Emergency Expenses
When you are self-employed, you are in charge of your success. But while you’re working hard to succeed, an emergency can strike.
Wouldn’t it be nice to know that there is a way to cover those expenses as soon as they happen? Sure, it will.
Whether you’re just starting up or own an established business, many things can go wrong and cause your company to suffer losses.
So buying insurance is one of the most critical factors for your business and entire success.
2. Constant Cash Flow
Regardless of the industry, all businesses need a steady cash flow to succeed. Thus, the last thing you want is your business falling apart because of the financial crisis.
With insurance, you could be sure that your business will be up and running even during an emergency, giving you peace of mind.
3. Increase Your Savings
Saving is essential for your future. But what if you could save more of your income without cutting back on your spending? It’s possible with the right insurance policy.
So as a self-employed Canadian, you need insurance to limit your expenses and increase your savings. This means staying on top of your finances even during emergencies.
4. Retire Well
Finally, buying insurance as a self-employed helps you secure your retirement days. Imagine a situation when you retire and face unforeseen circumstances such as critical illness or accident.
Although it may be simple to imagine but very difficult to be in such situations, your insurance gets you covered for such kinds of events – from your working days to your retirement days.
What are the Types of Self-Employed Insurance in Canada?
As mentioned previously, there are different types of insurance for self-employed Canadians. The major ones are:
1. Life Insurance
This is a type of insurance that guarantees benefits to your beneficiary when you die.
Thus, a life insurance policy provides financial protection to your partner or dependents when you pass away.
There are two types of life insurance: term and permanent life insurance. A term life insurance policy provides protection over a specific period and covers someone’s dependents in times of financial difficulty.
On the other hand, permanent life insurance provides coverage for a certain number of years at a predetermined death payout.
As long as the premiums are paid, permanent life insurance lasts until the policy becomes void due to nonpayment.
2. Critical Illness Insurance
As the name implies, critical illness insurance is coverage that pays a lump sum if you’re diagnosed with any of these illnesses:
- Heart attack
- Kidney failure
- Liver Failure
- Lung Disease
- Coronary artery bypass
- Muscular dystrophy
- Many sclerosis
- Motor Neurone Disease
- Parkinson’s Disease
- Terminal illness
- Alzheimer’s Disease
So with this type of insurance, you don’t have to worry about the cost of treating any of the above critical illnesses for yourself or family members.
3. Disability Insurance
Life is full of surprises. You’re never sure of your complete body structure until you pass away because a sudden car accident changes your appearance significantly.
So disability insurance is a type of insurance that replaces your income if you become sick or injured and unable to work. Common reasons disability insurance claims in Canada include mental health, muskoskeltal and cancer.
Thus, disability insurance is critical if you want to ensure your family is taken care of should you be unable to work due to disability.
4. Health Insurance
You or any of your family members can fall ill at any time. Regardless of your savings, this may ruin your financial stability.
But while you can’t always prevent yourself or your family members from getting sick, you can protect yourself against the expenses. This is where health insurance comes into the picture.
Health insurance is a type of insurance that insures you against medical expenses such as doctor consultation fees, medicines, and hospitalization costs.
What to Look for in the Best Insurance?
Now that you know the different types of insurance for the self-employed, how do you go about buying the one that suits you?
This is critical because you can ensure that you are protected against financial loss with the right cover for you and your family.
However, not all insurance policies are the same. So it’s essential to buy the best one for the best coverage.
Here are the two major factors to look for in the best insurance in Canada:
Getting the right insurance coverage is one of the crucial steps for getting the right kind of insurance.
Every insurer is different, and each offers a number of plans with varying levels of coverage to choose from.
So depending on the type of insurance you want to buy, ensure that the insurance company covers all you need.
Payment of premiums is required whether or not you use the coverage offered by the insurance company. You typically pay premiums monthly, and if you stop paying, you lose coverage.
Thus, you should consider an insurance company with affordable offers that you can meet the monthly payments.
Where to Get Self Employed Insurance in Canada?
An insurance broker that specializes in small business insurance is the right person to look for when considering self-employed insurance in Canada.
An online broker is one of the cost-effective means of getting self-employed insurance in Canada.
However, there are many online brokers in Canada, making it essential to choose the best one.
Thus, Bounc3 is one of Canada’s best online insurance brokers, providing self-employed Canadians access to Insurance best suited to self-employed individuals and personalized advice.
Furthermore, Bounc3 partners with major insurance carriers in Canada and uses advanced technology to simplify insurance purchases online with comprehensive coverage at the lowest price.
Insurance Benefits for Self-Employed Canadians
The Canadian Revenue Agency administers the following insurance benefits for self-employed Canadians.
The Employment Insurance (EI) includes a self-employed insurance program for eligible Canadians.
Thus, this program provides you with benefits as soon as 12 months after you register if you own a business or own more than 40% of your corporation’s votes.
Furthermore, you can receive up to 55% of your earnings, up to a maximum amount, if you need time off to care for yourself, your children, or other family members. $638 per week is the maximum amount in 2022.
On the other hand, Quebec residents can take advantage of this program for compassionate care, family caregiver and sickness benefits. Additionally, Quebec residents can enjoy paternity, maternity, adoption and parental benefits.
Range of Quebec Benefits
|Name||Beneficiary||Weekly Maximum||Maximum Weeks|
|Parental||parents who are away from work to care for their newborn or newly adopted child||$595 or $357||40 or 69|
|Maternity||people who are away from work because they’re pregnant or have recently given birth||$595||15|
|Family caregiver benefit for adults||people who provide care or support to a critically ill or injured person 18 or over||$595||15|
|Family caregiver benefit for children||people who provide care or support to a critically ill or injured person under 18||$595||35|
|Sickness||people who cannot work for medical reasons||$595||15|
|Compassionate care||people who provide care or support to a person who requires end‑of‑life care||$595||26|
Each benefit has its requirements. So applicants must meet the eligibility requirements of the benefit they are applying for. Additionally, you must:
- Be a Canadian citizen or permanent resident
- Earned a minimum self-employment income within the previous year before you applied for the program.
- Spend at least 12 months in the program.
- Reduced your business time beyond 40% for a minimum of one week.
Over to You
While no one can predict what will happen tomorrow, being prepared for unforeseen events is always the best move.
As a self-employed Canadian, you know the importance of reducing costs and maximizing profits. Thus, your mess insurance is to protect yourself, your family and your business against unforeseen financial crises.
From the above discussion, you understand how to choose the perfect insurance and where to do so. So the ball is now on your court to take the final step of buying your insurance in Canada.
What Type of Insurance Do I Need for Self-Employed?
There are four major types of insurance for the self-employed: health insurance, life insurance, critical illness insurance, and disability insurance. If you’re financially strong, I recommend you buy all these insurance policies.
If you are unsure where to start, bounc3 has a free risk diagnostic that will help you identify which product you need to buy first. Check it out.
However, when narrowing to one type of insurance, it’s essential to consider your situation, needs, budget and time commitment.
Can You Get EI if You are Self-Employed?
Yes, you can get Employment Insurance (EI) benefits if you’re self-employed in Canada. This is because the EI has a program that carter for the self-employed.
But to qualify for the EI self-employed program, you must be a Canadian citizen or permanent resident; earned a minimum self-employment income within the previous year before you applied for the program; spend at least 12 months in the program and; reduce your business time beyond 40% for a minimum of one week.
Can You Expense Health Insurance Self-Employed?
Yes, you can use your health insurance policy to fund various expenses. These deductions will be based on your monthly premiums.
However, since different insurance policies have different terms and conditions, it’s essential to check your health insurance deduction’s terms and conditions.
Should You Go With an Insurance Broker?
Insurance brokers are alternative means of buying insurance policies because they help you choose a policy that suits your situation.
So if you have complicated insurance needs or need a personalized insurance service, I recommend you use one of the best insurance brokers out there.
That said, Bounc3 is one of the best online insurance brokers offering affordable and personalized products for self-employed Canadians.
Have more questions? Kindly drop them in the comment section.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
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