Income Protection Calculator Canada

Why Income Protection is Vital in Canada

If you're unable to work due to illness or injury, your income may suddenly stop—but your expenses won’t. Income protection insurance is designed to replace a portion of your salary so you can cover essentials like rent, groceries, healthcare, and family needs.

How This Calculator Helps

This tool helps Canadians estimate the exact amount of monthly income protection they need. It factors in your current salary, savings, and any existing coverage to highlight the gap that insurance needs to fill.

Who Should Use This Tool?

• Employees not covered fully by workplace benefits
• Freelancers, consultants, and small business owners
• Anyone looking to protect their family’s financial stability

Typical Replacement Rates

Most Canadian income protection plans aim to replace 60–75% of your gross monthly salary. These benefits are typically non-taxable when paid from a personal plan. Policies from providers like Manulife, Sun Life, or Canada Life offer flexibility in benefit duration and waiting periods.

Factors to Consider When Estimating

• Emergency Fund: The more you’ve saved, the less coverage you might need short-term.
• Coverage Duration: Estimate how long you'd need benefits before returning to work.
• Existing Plans: Subtract any employer-provided or personal policies already in place.

For example, if your expenses are $3,000/month, but you only receive $800/month from group insurance, and you expect 6 months off work—you might need a plan to fill the $2,200/month gap.

Use this calculator regularly to update your estimate as your income, expenses, or coverage changes.