Health insurance for self-employed Canadians

Being self-employed in Canada can come with plenty of advantages, but one big trade-off is the lack of employer-provided health benefits. Freelancers, contractors, and small business owners are responsible for organizing their own health coverage, which can be overwhelming especially if you’re not sure where to start. 

In short, health insurance for the self-employed can help cover essential medical expenses that provincial health plans don’t pay for, such as certain prescription drugs, dental care, vision care, and more. The good news is that flexible options exist, and with the right plan, you can protect both your health and your finances.

This guide explains how self-employed health insurance works in Canada, what it can cover, and how to choose the right option for your unique situation.

Key points: 

• Provincial coverage has gaps: While Canadian provincial health plans cover essential medical services, self-employed individuals should consider private health insurance to help cover prescription drugs, dental care, vision care, paramedical services, and emergency travel medical expenses. 
• Flexible plan options: Sun Life offers three Personal Health Insurance (PHI) tiers—Basic, Standard, and Enhanced—with varying levels of coverage and reimbursement rates to match different budgets and healthcare needs. 
• Consider Critical Illness Insurance: Beyond regular health coverage, self-employed Canadians should consider Critical Illness Insurance (CII) to protect their income and financial stability if diagnosed with a serious health condition, as time away from work means lost income.

Do self-employed Canadians need health insurance? 

In Canada, provincial healthcare plans cover many essential medical services, but they don’t cover everything. As a self-employed Canadian, you may want private health insurance if you need coverage for: 

• Certain prescription medications 
• Dental care 
• Vision care
• Paramedical services like physiotherapy, chiropractic care, massage therapy 
• Extended mental health services 
• Emergency medical coverage while travelling 

Without health insurance, these expenses can add up quickly and become difficult to budget for, especially if you or your family rely on regular medication or ongoing care. With health insurance, these costs become more predictable and bring peace of mind.

What types of health insurance are available to self-employed Canadians? 

Several options are available depending on the type of coverage required. Sun Life offers three tiers of Personal Health Insurance (PHI): Basic, Standard, and Enhanced. All three plans offer varying degrees of coverage:

PHI plans are meant to compliment existing provincial coverage. For more information on what’s covered and not covered by each provincial health plan, please visit our provincial health coverage page.

How to choose the right PHI plan when you’re self-employed 

Given all the information above, choosing the right plan can seem daunting. Remember that it isn’t about getting the most coverage, it’s about getting the right coverage. 

When making your decision, consider the following: 

• Your regular medical expenses: prescriptions, dental visits, vision care, etc. 
• Family needs:  your spouse and/or children may have different coverage priorities 
• Budget: balance monthly premiums with potential out-of-pocket savings 
• Short vs. long-term needs: current health vs. future planning 

Try to avoid paying for benefits you’re not likely to use and prioritize coverage that addresses your real needs.

Do you need Critical Illness Insurance if you’re self-employed? 

Getting Critical Illness Insurance (CII) as a self-employed can be a wise decision. While personal health insurance plans help cover ongoing medical expenses, CII is designed to protect your income and financial stability if you’re diagnosed with a serious health condition. 

For self-employed Canadians, a critical illness diagnosis can be financially devastating, not only because of medical costs, but because time away from work often means lost income. 

Sun Life offers two primary CII options designed to fit different needs and budgets: Sun Critical Illness Insurance, and Express Critical Illness Insurance.

Sun Critical Illness Insurance (comprehensive coverage) 

This is our most extensive CII product, built to provide broad protection for you and your family: 

• Wide range of illnesses covered: up to 26 full-pay critical illnesses and 8 partial-pay conditions. 
• Child coverage is available: 5 additional childhood illnesses are covered. 
• Flexible coverage amounts: from $25,000 up to $4 million for adults. 
• Multiple plan options: You can choose different term structures.

This is ideal for self-employed individuals who want comprehensive coverage and higher benefit amounts in the event of a serious illness.

Express Critical Illness Insurance (fast and simple) 

Our more accessible CII product features: 

• No medical exam: get approved online without the need for medical tests. 
• Coverage for key illnesses: choose plans that cover 1, 3, or up to 7 critical illnesses (like cancer, heart attach, and stroke) with benefit amounts up to $50,000. 
• Instant online approval: faster turnaround and easy application.

For many self-employed Canadians, combining personal health insurance with CII offers a strong financial safety net that balances daily healthcare needs with protection against significant illnesses.

Are health insurance premiums tax-deductible for self-employed in Canada? 

In many cases, yes. Though this depends on your situation:

Sole proprietors and partnerships 

In many cases, health insurance premiums can be claimed as business expenses, subject to CRA rules and limits. This can reduce taxable income and make coverage more affordable in the end.

This information is meant for educational and illustrative purposes only. Some conditions, exclusions and restrictions apply.