So you’ve joined the gig economy; What are you doing about life insurance? Here's what you need to know

The state of gig worker benefits in Canada

No employer is legally required to provide life insurance to their employees, but many do as a way of attracting, retaining and rewarding their staff.

In 2023, 62% of life insurance in Canada was secured through employer-supported group plans, according to a poll conducted by PolicyMe.

But, with gig employers, offering life insurance appears to be less of a priority. Rideshare giants Uber and Lyft provide fairly generous accident insurance — while you’re driving for them — but offer no group life insurance or critical illness coverage. Food delivery companies DoorDash and Skip the Dishes offer even less auto coverage and no health or insurance benefits.

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Be prepared

Providing drivers with more money to put toward life insurance is a positive step, but for it to have any real impact, gig workers need to see life insurance as a priority.

According to the Canadian Life & Health Insurance Association, 75% of Canadians — nearly 30 million — have life insurance. If you’re a gig worker and have so far avoided securing coverage, you may want to join that cohort sooner rather than later.

“Term, permanent, critical illness, disability. These are all things that you need to look at,” says Michael Aziz, chief distribution officer at Canada Protection Plan. “Losing that income can be really disastrous for families.”

Two arguments young, healthy Canadians have against buying life insurance is that it’s expensive and unnecessary. But, accidents and illnesses can come for anyone; they don’t ask to see your ID before putting you on your back. And, the younger you are, the cheaper life insurance generally is.

Choosing the right plan

There is no shortage of insurance products out there for gig workers. Insurance companies are happy to take your money no matter who signs your paycheque.

Finding the right life insurance plan is a matter of balancing the cost with your budget, lifestyle and potential insurance needs. That’s a calculation that’s likely to require some professional guidance.

“You need to do a needs analysis,” says Aziz. “Maybe you have some student loans, or you have a mortgage or a car loan or some other liability that you want to protect against. Build your portfolio to match that.”

Applying for insurance doesn’t need to get in the way of your gig-hopping. Non-medical and simplified issue policies allow you to buy life insurance without having to visit a doctor or answer too many health questions. However, be aware that these policies usually come with higher premiums since the life insurance companies have less information to evaluate your health, which poses a higher risk to them. Additionally, flexibility and policy options are limited compared to a fully underwritten life insurance policy.

Nothing’s guaranteed when you’re trying to make a living in the gig economy, including your health. Looking into your life insurance options is one way of chipping away at the mountain of uncertainty you face everyday.

Sources

1. Securian Canada: More than half of gig workers rely on supplementary income; rising costs drive many to seek additional employment (Oct 8, 2024)

2. PolicyMe: Key Canadian life insurance statistics, by Cristina DaPonte (Apr 28, 2023)

3. Canadian Life & Health Insurance Association: Canadian Life & Health Insurance Facts 2024 edition