Gig Economy in Canada & Life Insurance

gig economy canada

The gig economy in Canada has grown rapidly in recent years, so the importance of providing for this demographic is growing. Its trend has been heavily influenced by the pandemic, where many Canadians have had to rethink their positions and look for freelance work. Gig workers and self-employed citizens are now a key part of Canada’s economy, but whether insurers have been able to meet their needs – let’s understand in this article.

The importance of the gig economy

Unlike self-employment, the gig economy has become the best option for those who have suddenly lost their jobs. According to Payments Canada research, about 13% of the adult population is engaged in it, with 37% of companies hiring gig workers in various positions. Hygienic work attracts Canadians by its flexibility – they can choose their own schedule, and by its affordability – the requirements for temporary workers are much lower than those for full-time employees. 

Despite the significant development of the gig economy, life insurance for these workers remains an issue. Sure, your employer can provide you with health insurance, but it will cover dental and vision services. However, what should an employee do if something serious happens to him or her while on the job? 

What is a gig worker?

At its core, the gig economy is a free-wage economy. It emerged after the massive development of information technology. For this reason, many platforms have emerged that offer temporary jobs. In other words, a gig worker is an employee who performs certain tasks on a short-term contract.

As a rule, the following specialists are involved in the gig economy:

  • designers;
  • educators;
  • planners;
  • writers;
  • animators;
  • accountants;
  • programmers;
  • coaches;
  • psychologists;
  • administrators of social networks. 

Such work can also involve drivers, couriers, seamstresses, and other workers who carry out one-time orders, but their physical presence to solve a particular order is mandatory. Unlike self-employed citizens, gig employees do not formalize their status and work under a one-time contract or without one at all. 

Advantages and disadvantages of gig work

The main advantage of temporary work is flexibility. An employee chooses a convenient schedule and chooses the clients he or she feels comfortable working with. This format of cooperation is especially suitable for those who prefer telecommuting or are ready to try out new professions. 

Among the disadvantages of gig work are the following:

  1. Lack of permanent earnings. Usually, one-time orders are paid to an employee after a job is well done, so his or her earnings directly depend on the number of tasks. In contrast, full-time employees get regular earnings and additional access to a package of social services. 
  2. Burnout. Many gig workers become stressed and nerve-weary over time because of shortened deadlines for tasks. This happens for the following reason: in order to get more money, temporary employees take on too many orders that cannot be done in a short period. 

The disadvantages also include the same flexibility. Some gig workers are willing to take on even low-paying orders that others have given up on. This happens when the specialist has little experience and is just beginning to get the hang of the new profession. 

Benefits for Canada’s Gig Workers

Under Canadian law, no employer is required to provide life insurance for employees. But some do provide insurance to attract and motivate their employees. According to statistics, in 2020, more than 18% of life insurance was provided by employers. This has changed dramatically in subsequent years, especially for gig workers.

For example, employers who hire temporary employees do not consider it necessary to ensure their lives. For example, the major food delivery companies Skip the Dishes and DoorDash offer gig workers only minimum car coverage, but no insurance benefits. And ridesharing giants Uber and Lyft provide generous insurance, but only while the employee is driving. At the same time, group life insurance and compensation for serious illnesses were out of the question.

However, things may yet change for the better. Last August, Uber executives proposed creating a special fund with flexible benefits for drivers who use apps and provide food delivery services. The fund would allocate money to gig workers, which they could invest in life insurance. 

However, the funds will only be available if the temporary employee has completed a certain number of hours of work in a quarter. At the same time, different companies will participate in the fund, so it won’t matter where the gig worker worked. 

Why isn’t health insurance for the self-employed in Canada in demand? 

In many ways, gig workers are slow to take out life insurance because they don’t think it’s important. But accidents, serious illnesses, and long-term disability can happen to any employee, regardless of status. All of this can have a devastating impact on the family budget. 

Another argument that causes many Canadians to reject voluntary life insurance is the high cost of the service. However, it will not be as much of a reason when an accident does occur. In addition, the younger the employee, the lower the cost of insurance. Statistics show that 22 million Canadians have already taken out life insurance and made the right decision.

What should hygienic workers do?

In fact, insurance companies offer quite a few products for gig workers. Finding the right service will depend on your budget, lifestyle, and the need for the insurance itself. In order to make the right choice, you should conduct a thorough analysis of the circumstances you want to protect yourself from and how much money you’re willing to shell out for it.

Some agents provide employment insurance, but they provide limited coverage for accidents. Self-employed individuals and gig workers can also get income insurance at an affordable price. All they need to do is download a special application and take a few minutes to sign up and link the policy to their personal account. 

Such a solution will enable gig employees not to worry about tomorrow and life contingencies. Ensure your life and income today so you won’t regret it later!

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