GuideBudgetingExpert

Critical Illness and Private Disability Insurance in Canada

What EI sickness benefits and CPP disability would pay you, and how to work out the gap a private policy would be covering.

By Nate Sorensen Reviewed for accuracyUpdated Sep 202615 min read

Listen to this chapter

0:00 / 9:35

Somebody quotes you a price for critical illness insurance, or the bank offers you disability coverage along with a loan. Whether that's worth it turns on how much you'd be short if your pay stopped, and you can work that out today. If you're an employee, Employment Insurance sickness benefits run for up to 26 weeks and then they stop. Canada Pension Plan disability can follow if you're approved for it, and new beneficiaries have been averaging a little over $1,200 a month. Take what your month costs and subtract whatever would still arrive. The difference is what a policy is being sold to cover.

What you can't work out in advance is the price. Both are priced one applicant at a time, off an application you fill in, so there's no table anywhere to check a quote against.

Key takeaways

EI sickness benefits pay 55% of your insurable earnings, capped at $729 a week in 2026, and they're paid for up to 26 weeks. Then they stop.
CPP disability pays you a basic $610.46 a month, plus an amount built on what you've contributed. New beneficiaries averaged $1,234.68 a month as of October 2025.
Take what your month costs, subtract what would still arrive, and what's left is your monthly gap.
If you work for yourself, none of the EI half is there for you unless you signed an agreement with the EI commission at least twelve months ago.

A lump sum, or a monthly cheque

If you've been offered both, they do different things for you.

Critical illness insurance pays you one cash amount if you're diagnosed with one of the medical conditions listed in your policy.⁵ The cash is yours to use on anything. You can put it against the mortgage, or a treatment your provincial plan won't cover, or paying somebody to do the parts of your life you can't do for a while.

Disability insurance pays you a monthly income if you become disabled, as your own policy defines that.⁶ You're replacing income with it rather than being handed a pot of money.

The difference shows up once time passes. Your lump sum goes wherever you send it, and after that you're living on whatever you have left of it. A monthly payment keeps landing for however long your own policy says it will.

	Critical illness	Disability income
What starts the payment	A diagnosis of a condition listed in your policy	Becoming unable to work, as your own policy defines that
What arrives	One cash amount	A monthly amount
When it ends	It doesn't. The money is yours	When you can work again, or whenever your own policy says
If your insurer fails	Up to $250,000, or 90% of the benefit, whichever is higher⁵	Up to $5,000 a month, or 90% of the benefit, whichever is higher⁶

How long would EI pay you if you got sick?

Up to 26 weeks, and how many of those weeks you get depends on how long you can't work for medical reasons.¹

You'd be paid 55% of your insurable earnings, and in 2026 the payment stops climbing once it reaches $729 a week.¹ Take 55% of $1,325 and you're already at $729, so once your best weeks average more than about that, a bigger paycheque doesn't move the payment. Those best weeks are 14 to 22 of your highest-paid ones, and the number used comes from how high unemployment runs where you live.¹

A family supplement gets added to your weekly payment automatically, with no application from you, on three conditions. You have at least one child under 18. The Canada Child Benefit is going to you or to a partner. And your net family income comes to $25,921 or less. Even then, your total for the week can't go above $729.¹

Twenty-six weeks, and what comes after

EI sickness benefits are a fixed length. What follows is a different program, with its own application.

Source Service Canada, EI sickness benefits: how much you could receive; Canada Pension Plan disability benefits: how much you could receive. Accessed 2026-09-06.

CPP disability, once you're approved

Once you're approved, it comes to you in two parts. There's a basic monthly amount, $610.46 in 2026. Then there's a second amount, built on what you paid into CPP across your working years.² That second piece is built from your own contribution record, and without it nobody can put a figure on it.

The most anyone gets in 2026 is $1,741.20 a month, and new beneficiaries averaged $1,234.68 as of October 2025. Neither number is guaranteed to you.² Use the average for your arithmetic. The maximum sits about 41% higher, so if you start from it your gap will look smaller than it is.

It won't pay for your medications, your medical devices or your other health costs.² Those don't go down when you get ill. If you already receive a CPP survivor's pension, yours arrives as one combined payment with the disability benefit, and the most that combination pays is $1,756.14 as of January 2026.² That's $14.94 a month above the disability maximum by itself, so if you're near the top already, a second CPP benefit adds you very little.

Adding up what would still arrive

Work your own gap out in this order, and write the answer down at the end of it.

Start with what your month costs, not with what you earn. Your rent or mortgage, your groceries, the car, the insurance, and the minimum on every debt you are carrying. Leave out the spending that'd stop by itself if you were at home. Never priced a month before? Run your own numbers.
Take off what a partner brings home, where there's one and their pay wouldn't change.
Take off anything your work would keep paying you, and write down how many weeks it would do it for.
Take off EI sickness benefits, at 55% of your insurable earnings, capped at $729 a week, for up to 26 weeks. Then write your figure out a second time for month seven, with that line gone.
Take off CPP disability where your condition would keep you off work long term, using the $1,234.68 average rather than the maximum.

Whatever's left is your monthly gap. Judge any quoted premium against that number. Haven't added your monthly costs up before? Sit down with a bank statement, and the figure you land on is the one that sizes an emergency fund too.

The cost figures for the three people here are round numbers for illustration. The benefit amounts are the real 2026 ones.

Maya rents alone, earns one income, and has nothing extra at work. Her month costs about $2,300. On best weeks averaging $900, EI pays her $495 a week, near $2,145 a month, so she is about $155 behind each month while it lasts. From month seven the whole $2,300 is missing unless CPP disability comes through. Maya works out which of the things being sold to her are worth paying for, in "Protect the Plan".

Nadia and Theo both work, with two young children at home. If Theo's pay stopped, Nadia's would carry on, so they are short his share of the bills rather than all of them. Their net family income clears $25,921. No family supplement. On best weeks averaging $1,400, his 55% would come to $770, and he is held to the $729 ceiling, about $3,159 a month. "The Same Page" puts both their incomes in front of them for the first time.

Joanne is on her own, near the end of her working life, with the mortgage paid off. Her month costs about $1,900. On best weeks averaging $1,100, EI pays her $605 a week, near $2,621 a month, so across those 26 weeks there's nothing missing at all. From month seven, CPP disability at the average would leave her about $665 short. "Counting What's Already There" has Joanne pricing a single year of retirement.

Working for yourself puts you outside all of it

EI does run a program for the self-employed, and its sickness benefits give you the same 26 weeks at the same 55% under the same $729 ceiling.³ Getting through the door is the hard part.

You have to enter an agreement with the Canada Employment Insurance Commission, and it's got to have been running twelve months before you can receive any special benefit at all.⁴ You need at least $9,254 of net self-employed earnings in your previous calendar year. You've got to own your business, or control more than 40% of its voting shares. And your time working on it has to have dropped by more than 40% for at least a week.⁴

Those twelve months run from your agreement, not from your illness. If you haven't already signed one, there's nothing waiting for you to claim, and signing one today just starts your twelve months from today. Once you're in, you pay premiums through your yearly tax return for however long you stay self-employed.⁴

You don't have to guess at where you stand. Your agreement status sits inside My Service Canada Account, in the Employment Insurance section.⁴ If nothing's there, treat the first 26 weeks as empty when you do the arithmetic. CPP disability is a separate program with its own application, and the EI agreement doesn't affect it either way.

Only your contract has these answers

Three things only your own contract can settle.

What it costs you. Neither product has a published price. Your quote comes out of an application and moves with what you put on it. A figure you've seen somewhere belonged to somebody else, with a different application behind it.

Which conditions count. A critical illness policy pays out if you're diagnosed with one of the conditions listed in your policy.⁵ That list is the one printed in your own contract, and there's no national list to check it against.

What counts as unable to work. Your disability policy pays you a monthly income if you become disabled.⁶ What yours means by disabled is written into your own contract, and the policy your neighbour holds can mean something different by the same word.

The last two are in the definitions section of your policy document, and the price comes back on your own application, not off a shelf. If you haven't got a copy of the policy, ask your insurer for one.

The guarantee behind a private policy

Your policy's a promise from a company, and companies do fail. When one does, Assuris protects the people holding its life and health policies, and what you keep depends on which product you hold.⁵

On a critical illness policy you'd keep up to $250,000, or 90% of your benefit, whichever is higher.⁵

Under $250,000, the whole benefit is yours. Over $250,000, you get whichever is bigger out of the flat $250,000 and 90% of your benefit. On a $260,000 policy that comes to $250,000, where 90% by itself would have given you $234,000.

What you would keep if your insurer failed

Benefits between $240,000 and $290,000. You keep a flat $250,000 until 90% of your benefit overtakes it.

Source Assuris, Critical Illness. Accessed 2026-09-06. Both lines plotted from the published guarantee.

An individual disability policy works the same way at a different size. You keep whichever is higher out of two figures. One is a flat $5,000 a month. The other is 90% of the benefit you're insured for.⁶ Between $5,000 and about $5,556 a month the flat figure's the larger one, so that's the stretch where it helps you. Past $5,556 you're always better off on the 90%.

Group coverage at work has two answers, and you get one or the other depending on whether your payments had started.⁷ If payments to you hadn't started on the day it failed, your coverage runs on until the earlier of your group contract's next renewal date or six months from the failure. If they had started, Assuris looks to move your policy to a solvent company, and that same higher-of-two guarantee applies to you.⁷

Who paid the premium decides the tax

You're in one of two situations, and you can tell them apart by asking whether an employer put money into the plan.

Your plan at work counts as a wage-loss replacement plan only when all five of these hold.⁸

Your employer funds any part of it.
It's a group plan, not yours alone.
Its purpose is to make up employment income you lost to sickness, maternity or accident.
It pays you periodically rather than in one lump sum.
It's a contract of insurance, or it follows insurance principles.

Miss any single one and none of what follows applies to your plan. Where your employer just pays claims as they come in, that fails the last condition, and payments out of it carry CPP contributions and EI premiums.⁸

When all five do hold, your benefit reaches you in box 14 of your T4. You report the amount you received minus the contributions you made to the plan yourself, where you didn't already use them on an earlier year's return, and your contributions go on line 10130.⁹ The more you've put in over the years, the less of your benefit lands in your income.

A policy you bought on your own isn't one of these plans at all. No employer funded yours and it isn't a group plan, so it fails two of the five before you reach the others.⁸ Provincial workers' compensation sits outside these rules as well, and so do the disability benefits paid by CPP and by the Quebec Pension Plan.⁸

For a policy you bought yourself, none of that machinery applies, and the current page for the tax is line 10130. The older detail sits in an interpretation bulletin, IT-428, which that page still points to and marks as archived.⁹ Take that one to whoever files your return rather than leaning on it yourself.

Do you need critical illness or disability insurance?

That depends on the gap your own arithmetic leaves, and who else is earning decides how big it'll be.

If a partner keeps earning and something at work keeps paying, EI sickness benefits land on top of both, so what goes missing is one share of the bills rather than all of them. A gap that size is the kind savings absorb. The question becomes whether you'd rather hold it in cash than pay a premium against it, year after year, for a risk that may never arrive.

If you're the only earner, nothing lands on top. You get up to 26 weeks at $729 a week at most, and from month seven you're on CPP disability or on nothing. That gap lasts as long as you're off work, which is what a monthly benefit is built for and what a single lump sum has to be stretched across.

If you work for yourself and never signed the EI agreement, your first 26 weeks are empty too. Your gap starts at the full amount in week one and never steps down, which makes it the largest of the three by a distance.

Whichever one you're in, that number is arithmetic and it's yours. What a policy charges to close it is the part you'll have to go and ask about.

Common questions

Do EI sickness benefits pay more if I have children?

They can. You'd get a family supplement on top of your weekly payment, added for you without an application, so long as there's a child under 18 at home, the Canada Child Benefit goes to you or to your partner, and your household's net income is $25,921 or under. Your weekly total is still capped at $729 in 2026.

Can I get EI sickness benefits if I'm self-employed?

Only if you signed up well in advance. You'd need an agreement with the EI commission in place, active a full twelve months, before you can be paid any special benefit. You'd also have to clear the earnings and ownership conditions, one being a minimum of $9,254 in net self-employed earnings the year before. And you can't sign after you fall ill and then claim, because your twelve months are counted from the agreement, not from your illness.

Will my private disability payments drop if CPP disability is approved?

They might. An approval for CPP disability can change what another payer sends you, so your total income doesn't always go up when it lands. Ask your insurer what your own contract does with it.

Is a disability benefit taxable in Canada?

It depends on who funded the plan. Paid out of a wage-loss replacement plan at work, your benefit lands in box 14 of your T4, and you report it less your own contributions to the plan, so long as you didn't already use those on an earlier year's return. The contributions go on line 10130. That reduces what you report. It doesn't remove it. If you bought the policy privately, the detail lives in an archived bulletin, IT-428, and that's a question for whoever files your return.

What happens to my policy if my insurance company goes out of business?

Assuris protects you. How much you'd keep turns on the kind of policy you have. A critical illness policy keeps up to $250,000, or 90% of your benefit, whichever of the two is higher. On your own disability policy it is up to $5,000 monthly, or 90%, on that same rule. Group coverage at work splits in two. If your payments hadn't started when the company failed, your coverage runs to whichever comes first, your contract's next renewal or six months. If they had started, Assuris looks to move your policy to a solvent company, and you keep the same higher-of-two amount.

Sources

Educational, not financial advice. Figures verified against primary sources on the date shown.

If your pay stops for a reason other than illness, the arithmetic is close but a different program pays it, and the guide to EI when you lose your job takes that side of it. Sizing an emergency fund answers the cheaper half of the same question, and everything else sits in the budgeting hub.