What insurance do I lose when I go self-employed?

Everything that came through your employer's group plan: life, long-term disability, extended health and dental, and often critical illness. You also lose automatic EI unless you opt in.

Can the self-employed get EI?

Yes — you can voluntarily register for EI special benefits (sickness, maternity, parental, caregiving). There's a waiting period (generally 12 months) before you can claim, and you pay premiums on your self-employment income.

Do I need disability insurance if I'm self-employed?

It's the most important coverage to price. There's no group LTD behind you, and CPP-Disability is thin (about $1,234.68/month on average) and hard to qualify for. Personal own-occ coverage protects your income.

What's a Health Spending Account?

An HSA lets an incorporated business reimburse medical and dental expenses in a tax-efficient way — a common replacement for group health coverage.

Should I incorporate for insurance reasons?

Incorporation opens options (HSAs, corporate-owned life insurance, tax-efficient premium funding), but it's a broader tax and legal decision. Weigh it with your accountant.

Verified July 2026

Going self-employed: you just became your own benefits department

Leaving a job means leaving your group coverage. What used to be automatic — life, disability, health — is now your responsibility.

You are now the benefits department

Group benefits quietly did a lot: life insurance, disability coverage, health and dental, sometimes critical illness — all underwritten, subsidized, and automatic. Going self-employed removes that entire layer. Nothing about your risk changed; only who's responsible for covering it did. Here's how to rebuild each piece.

What you lost, and how to replace it

Lost with the job	Replacement	Notes
Group life (1–2× salary)	Personal term (or permanent) life	Buy while healthy; it's underwritten
Group long-term disability	Personal disability insurance	The priority — see below
Critical illness (if any)	Personal critical illness	A diagnosis hits a one-person business hard
Extended health / dental	HSA or personal/association plan	Choose by your usage
Automatic EI	Voluntary EI special benefits	Opt-in, with conditions

Disability — the priority

This is the coverage most self-employed people underestimate. There's no employer LTD behind you, and the government floor is thin: CPP-Disability is hard to qualify for and averages about $1,234.68/month. If your business depends on your ability to work, personal disability insurance — ideally with a true own-occupation definition, a benefit period to age 65, and a chosen elimination period — is worth pricing early. Size the gap with the Disability Gap tool.

The EI option most people miss

Self-employed Canadians can opt into EI special benefits — including sickness, maternity, parental, and caregiving benefits. It's voluntary: you register, pay premiums on your self-employment income, and generally must wait 12 months before claiming, with a commitment to keep paying while you receive benefits. EI sickness replaces 55% of earnings to a maximum of $729/week for up to 26 weeks (2026). It's a partial backstop, not a substitute for real disability insurance, but worth knowing about.

Health, dental, and incorporation

Health Spending Account (HSA) — if you incorporate, an HSA lets the corporation reimburse medical/dental costs tax-efficiently.
Personal or association health plans — replace extended health and dental if you're not incorporated or want predictable coverage.
If you incorporate, also explore corporate-owned life insurance for tax-efficient funding of permanent coverage.

Your transition checklist

Replace group life with a personal policy — before any health change.
Price personal disability insurance (own-occ, to age 65).
Consider critical illness.
Decide on EI special benefits opt-in.
Set up an HSA or personal/association health plan.
If incorporating, review corporate-owned coverage.

Frequently asked questions

What insurance do I lose when I go self-employed?: Everything that came through your employer's group plan: life, long-term disability, extended health and dental, and often critical illness. You also lose automatic EI unless you opt in.
Can the self-employed get EI?: Yes — you can voluntarily register for EI special benefits (sickness, maternity, parental, caregiving). There's a waiting period (generally 12 months) before you can claim, and you pay premiums on your self-employment income.
Do I need disability insurance if I'm self-employed?: It's the most important coverage to price. There's no group LTD behind you, and CPP-Disability is thin (about $1,234.68/month on average) and hard to qualify for. Personal own-occ coverage protects your income.
What's a Health Spending Account?: An HSA lets an incorporated business reimburse medical and dental expenses in a tax-efficient way — a common replacement for group health coverage.
Should I incorporate for insurance reasons?: Incorporation opens options (HSAs, corporate-owned life insurance, tax-efficient premium funding), but it's a broader tax and legal decision. Weigh it with your accountant.

Sources

Government figures verified July 2026 against the cited Service Canada pages. Educational only — not insurance or tax advice.

Educational only — not insurance advice, and no products are sold here. Government figures verified against their cited sources. Robert is a mascot, not a licensed advisor. See our disclaimer.

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