Verified July 2026
Your coverage has three layers. Most gaps hide in the seams.
Government programs, workplace benefits, and personal policies stack on top of each other. Understanding the order — and where each one stops — is the whole game.
Before you buy anything, know what you already have. Personal insurance should fill the gaps the first two layers leave — not duplicate them.
Layer 1 — The government baseline
What exists whether or not you buy a policy. It's real, and thinner than most people assume — a floor, not a plan.
- Provincial health care pays for medically necessary treatment inside Canada — but reimburses only small fixed amounts out of country, so it effectively stops at the border.
- CPP Disability — basic $610.46/mo, average for new beneficiaries $1,234.68/mo, maximum $1,741.20/mo. Requires a severe and prolonged disability plus enough contributions, and most group LTD plans offset it.
- EI sickness — up to 26 weeks at 55% of insurable earnings, capped at $729.00/week. A short bridge while you recover or transition to longer-term coverage.
- CPP survivor & death benefits — a one-time $2,500.00 death benefit plus a modest survivor pension (60% of the retirement pension at 65+, or a flat amount plus 37.5% under 65).
- Workers' compensation — covers work-related injury and illness only, through your provincial board.
The seam: Layer 1 barely travels, replaces only a fraction of income, and much of it depends on eligibility rules you can't assume you'll meet. The 2026 figures are in this year's numbers post.
Layer 2 — Workplace / group benefits
If you're employed, usually your biggest chunk of coverage — and the one you've read the least. Typically some group life (often 1–2× salary), LTD, sometimes STD, critical illness, and extended health/dental.
- The monthly cap quietly under-insures higher earners — a "60% of salary" benefit can be far less once the cap applies.
- The own-occ → any-occ switch around month 24 can end a disability claim when the definition tightens to any job you're suited to.
- Taxability — employer-paid LTD premiums make the benefit taxable, so budget the after-tax number.
- Portability — group life and LTD rarely follow you out the door.
The seam: Layer 2 is generous while you're employed and healthy and evaporates exactly when you might need it most. Decode it with the group benefits guide and size it with the Disability Gap tool.
Layer 3 — Personal policies
The layer you control. Its job is to fill the specific gaps Layers 1 and 2 leave — no more. Personal term life, personal disability, critical illness, home/condo/tenant, auto, and travel medical. Portable, in your control, priced to your health today.
The seam: the risk here is buying by default — duplicating what you already have, or over-insuring a need that's actually falling. That's what our calculators and Beast Policy Organizer are for.
The three layers at a glance
| Layer | What it covers | Key limits | Portable? | Taxable? |
|---|---|---|---|---|
| Layer 1 — Government | A baseline floor: provincial health, CPP-D, EI sickness, CPP survivor, workers' comp | Thin, eligibility-gated, barely travels abroad | Universal, but rules-bound | Varies (EI/CPP benefits are taxable) |
| Layer 2 — Group | Group life (1–2× salary), LTD, sometimes STD/CI, health & dental | Capped, any-occ switch ~month 24, ends with the job | Rarely portable | Employer-paid LTD is taxable |
| Layer 3 — Personal | Term life, personal DI, critical illness, home/auto/tenant, travel medical | Priced to your health; costs money | Fully portable, in your control | Life proceeds tax-free; DI tax-free if you pay premiums |
A worked example: the stack in a real disability
Raj, 45, earns $90,000 (about $7,500/month, roughly $5,500 after tax). A back injury stops him working. Here's how the three layers actually pay out, month by month:
| Period | What pays | Roughly |
|---|---|---|
| Weeks 1–26 | EI sickness (55% to $729.00/week) | ~$729.00/wk |
| Months 7–24 | Group LTD (own-occ), less any CPP-D offset | capped, taxable |
| Month 24+ | LTD switches to any-occ; CPP-D if he qualifies | ~$1,234.68/mo |
The gaps are obvious once it's laid out: a capped, taxable benefit for two years, then a much thinner floor. Personal disability insurance is what fills the shortfall. See your own month-by-month stack in the Disability Gap tool or the What Happens If simulator.
Personalize it
Set your province in the header and your situation determines which gaps matter most:
- Employed with dependants → check the any-occupation switch and whether group life is enough (Disability Gap, Life Insurance Needs).
- Self-employed → you are Layers 2 and 3 (Going self-employed).
- Snowbird / frequent traveller → Layer 1 stops at the border (Travel & Snowbird).
Frequently asked questions
- Does CPP-Disability stack on top of my group LTD?
- Usually not. Most group long-term disability plans offset (reduce) their payment dollar-for-dollar by what CPP-Disability pays (averaging $1,234.68/month, up to $1,741.20/month in 2026). So CPP-D typically shifts who funds your benefit rather than increasing your total income.
- How long does EI sickness last, and how much does it pay?
- EI sickness replaces 55% of your insurable earnings, up to $729.00 per week, for a maximum of 26 weeks. It's a short bridge, not long-term income replacement.
- Do I still need personal insurance if I have good work benefits?
- Often yes. Group coverage is capped, frequently taxable, and ends when the job does — usually when you're most stressed and possibly less healthy. Personal policies fill the gaps and stay with you between jobs.
- What does the government pay if I die?
- The CPP death benefit is a one-time $2,500.00, plus a modest survivor pension. That's a fraction of what a household actually needs, which is what life insurance is for.
- What happens to my coverage if my insurer fails?
- Industry-funded backstops protect you: Assuris guarantees the greater of $1,000,000.00 or 90% of a life insurance death benefit, and PACICC covers home and auto claims within limits. Insolvencies are rare and most policies are fully protected.
Sources
Figures verified July 2026 against Service Canada, Assuris, and PACICC sources. Read the methodology. Education, not advice.