So you’ve joined the gig economy; what are you doing about life insurance?

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 2020, 18% of life insurance in Canada was secured through employer-supported group plans, according to the Canadian Life and Health Insurance Association.

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.

The coverage situation could improve for some Canadian gig workers.

In August, Uber proposed a “flexible benefits fund” for app-based ride-sharing and food delivery drivers in Canada. The fund would provide cash benefits gig workers could put toward a life insurance plan.

The fund wouldn’t be available to all workers, though. An Uber blog post detailing the proposal says workers would need to qualify for the benefits fund “based on completing a specified amount of engaged hours per quarter,” although those hours could be aggregated across all the companies participating in the fund.

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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.

The CLHIA says 22 million Canadians 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. “No medical” and “simplified issue” policies allow you to buy life insurance without having to visit a doctor or answer too many health questions.

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.