Compare life insurance quotes in Canada
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compare quotesSample life insurance quotes from the Canadian market
Thousands of users visit us weekly, looking for the right coverage to fulfill all their needs. Just as we’ve helped them compare personalized life insurance quotes, we can help you too. Below are a few sample rates from the Canadian market – last updated in September 2024. To see how much you could be paying for a policy tailored to your unique situation, take advantage of our free comparison tool today.
- $14/month
20-year term policy with $300,000 coverage
for a 40-year-old, non-smoking female
- $20/month
10-year term policy with $500,000 coverage
for a 30-year-old, non-smoking male
- $512/month
Universal life policy with $700,000 coverage
for a 45-year-old, non-smoking female
- $631/month
Whole life policy with $500,000 coverage
for a 50-year-old, non-smoking male
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What is life insurance? Why do I need it?
Matt Hands, VP, Insurance and MoneySense
A life insurance policy is essentially a contract between you (the policyholder) and your insurance company. By paying regular premiums, either monthly or annually, your provider agrees to pay a lump sum of money to your dependents after you pass away. So if you have loved ones around you that rely on you financially, a life insurance policy can provide peace of mind as they'll still be covered after a worst-case scenario.
Here, we highlight a few key statistics about Canada's life insurance market from the Canadian Life & Health Insurance Association – including the number of policyholders, average household coverage, and annual benefits paid:
- 22 million
Canadians insured
In 2022, 22 million Canadians had life insurance, totalling to $5.5 trillion in coverage.
- $474,000
Average coverage
The average life insurance coverage for a Canadian household was $474,000 in 2022.
- $16.1 billion
Benefits paid out
In 2022, insurers paid out $16.1 billion in life insurance benefits – including $9.4 billion in death benefits.
What does life insurance cover?
The money your beneficiaries receive after your passing is also known as a death benefit. This reserve can generally be used for anything they wish – so life insurance can cover a variety of needs, such as:
Mortgage
If the home hasn't been paid off yet, a life insurance policy can cover the remaining payments needed.
Income stream
If your family relies on your income for everyday expenses (e.g. groceries), life insurance can step in to help.
Funeral expenses
The death benefit can be used to cover end-of-life expenses, such as funeral, burial, or cremation fees.
Outstanding debt
If you have debt that will be passed on to your loved ones, life insurance can help pay it off.
School tuition
Life insurance can help fund your child's education in the event you're no longer there to do so yourself.
Financial gift
Even if there's no specific need, a life insurance policy can be a gift for your loved ones.
Common types of life insurance in Canada
There are many different types of life insurance in Canada – here, we cover some of the most popular options, so you can choose the best one for your needs:
Term life insurance
Whole life insurance
Universal life insurance
Which type of life insurance is right for me?
Many Canadians already have coverage through their employer, also known as group life insurance. According to the Canadian Life & Health Insurance Association, the breakdown between premiums from individual policies and group policies is 83% and 17%, respectively.
83%
of life insurance premiums are from individual policies
17%
of life insurance premiums are from group policies
Even if you have group life insurance, it's important to consider supplementing it with a personal policy – employer-provided plans aren't typically customized to your needs (and it can be lost if you leave your job). If you don’t have any coverage at the moment, now is also the time to think about securing a personal policy to protect the financial future of yourself and your loved ones.
For reference, the chart below summarizes the breakdown of different types of life insurance in Canada – the percentages represent the share of the total value of policies in force. While term life insurance takes up majority of the market, including both group policies (35%) and individual policies (40%), permanent life insurance still makes up one quarter. This includes whole life insurance (12%) and universal life insurance (13%).
Life insurance market breakdown in Canada
It’s no surprise that term life insurance dominates the Canadian market as many policyholders have only temporary coverage needs – such as paying off a 20-year mortgage or covering a child's education. However, permanent life insurance can be an excellent option for those seeking lifelong coverage for reasons such as tax planning, estate planning, and business succession planning.
To help you choose the right one for you, below is a table outlining the main differences between term life insurance products and permanent life insurance products:
Feature | Term life insurance | Permanent life insurance |
---|---|---|
Coverage period | Term life insurance only covers you during the fixed term you choose – be it five years, ten years, or thirty. | Permanent life insurance covers you for an entire lifetime – from the policy start date until the day you pass. |
Coverage needs | Term policies are well-suited if you only need financial protection for a specific period (e.g. mortgage debt). | Permanent life insurance is recommended if you have a lifetime need for coverage (e.g. estate planning). |
Death benefit | Your death benefit is the set amount purchased – it'll also only be paid out if you pass away during the term. | Your death benefit is usually also fixed to a certain amount, but it can change in some cases – it's also guaranteed to pay out after you pass. |
Cash value | Term life insurance policies don't accumulate cash value, so you won't be growing a reserve. | Most permanent plans accumulate cash value, so you can access funds during your lifetime. |
Withdrawals | You can't withdraw from a term life insurance policy during your lifetime. | With permanent life insurance, you're generally able to withdraw or borrow against your cash value reserve. |
Cost | Term life is generally much more affordable than whole life – that's because you might not need a payout. | Permanent insurance policies are eventually paid out, so expect to pay much more for this coverage. |
As outlined in the table, one of the key advantages of choosing permanent life insurance – which includes whole life or universal life – is the cash value reserve. This is a sum of money that grows tax-deferred, and it can be accessed during your lifetime for an emergency, retirement, or other financial goals. If you have a need for this feature, a permanent life insurance policy may be right for you.
Ultimately, it's important to discuss your specific needs with a licensed life insurance broker in Canada. With professional guidance, you can choose the best option for both your current financial situation and your future financial goals.
Pro tip: Leverage your TFSA and RRSP
While a permanent life insurance policy can be used as an investment tool, it can be a good idea to maximize your Tax-Free Savings Account (TFSA) and Registred Retirement Savings Plan (RRSP) contributions first.
TFSA: This allows your investments to grow tax-free and withdrawals are also tax-free, making it ideal for retirement savings and other financial goals.
RRSP: Contributions here are tax-deductible (reducing your taxable income), and the investments grow tax-deferred until you take it out for retirement.
Universal life insurance, for instance, offers advantages in tax planning but can be quite hands-on – often better suited for financially savvy individuals. Investing through a TFSA or RRSP typically provides better tax benefits, while investing through life insurance can be more complex, less flexible, and significantly more expensive. It’s wise to explore other options first before turning to life insurance for investing.
How much life insurance do I need?
The amount of life insurance you need to purchase will vary on a case-to-case basis. One way to calculate this is to add up any existing debts, mortgage payments, and educational costs, along with the income replacement your dependents will need – while also keeping in mind any existing coverage you may have (such as through a group policy). You may also want to factor in final expenses, such as for a funeral, burial, or cremation.
For reference, according to the Canadian Life & Health Insurance Association, the average household coverage across the country in 2022 was $474,000. The table below outlines averages by province, along with the median age of policyholders:
Province | Average household coverage | Median policyholder age |
---|---|---|
Alberta | $567,000 | 38 years old |
British Columbia | $511,000 | 42 years old |
Manitoba | $462,000 | 38 years old |
New Brunswick | $377,000 | 46 years old |
Newfoundland & Labrador | $363,000 | 48 years old |
Nova Scotia | $370,000 | 44 years old |
Ontario | $504,000 | 40 years old |
Prince Edward Island | $404,000 | 42 years old |
Quebec | $391,000 | 43 years old |
Saskatchewan | $519,000 | 38 years old |
Territories | $392,000 | 34 years old |
Again, be sure to discuss your specific coverage needs with a trusted life insurance broker to review your financial situation in detail. And if you have more complex requirements – such as estate planning, tax planning, or succession planning – it’s especially important to consult with a professional to ensure your policy is tailored to your unique circumstances.
Pro tip: Insure against inflation
After selecting your policy's death benefit, it’s important to review it periodically to ensure it continues to meet your financial needs. The cost of living in Canada, for one, only appears to be increasing over time – you want to make sure your loved ones remain adequately covered if your policy is meant to act as income replacement.
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Other life insurance products in Canada
Here's a quick overview of a few other life insurance products you may be interested in – some of these may also be added to your primary policy as a rider:
Critical illness insurance
Disability insurance
Mortgage life insurance
Funeral insurance
Family plan insurance
Pro tip: Protect your life, not just your legacy
One of the most overlooked aspects of life insurance is living benefits. Many people focus solely on death benefits and overlook the importance of coverage that provides financial support while you’re still alive – such as critical illness or disability coverage.
These policies can offer financial protection and peace of mind in case you face serious health challenges. The funds can be used to access accelerated healthcare internationally, for instance.
How much is life insurance in Canada?
The cost of life insurance will differ based on your needs as a policyholder, as well as the risk you bring – to find out the exact cost you'll be paying, be sure to compare life insurance quotes with us today.
For reference, here is a chart outlining sample life insurance quotes for term life and whole life policies by age and gender. The term life policy is representative of a 20-year period, and both policies consist of $500,000 in face-value coverage.
The cost of life insurance in Canada
Factors that go into your life insurance quote
Along with age and gender, here are some key factors life insurance companies consider when quoting you for coverage – understanding these can give you better insight into how your rate is determined:
- Age
The older you are, the more expensive your life insurance policy will be. And some insurers won't offer you coverage after passing a certain age.
- Gender
Males generally pay more for life insurance than females – statistically speaking, men are at higher risk of passing away earlier.
- Health & lifestyle
A pre-existing condition, family history of illness, or participating in activities like heavy drinking and smoking, can come with higher premiums.
- Policy type
Term life insurance is generally much more affordable than permanent life insurance, simply because the death benefit could potentially expire.
- Term length
A 5-year term policy will cost less than a 30-year policy because you're far less likely to pass away during a short period of time.
- Coverage amount
It's no surprise that the larger the benefit you choose, the more you'll be paying in premiums during your lifetime – added protection comes at a cost.
Pro tip: Honesty is the best policy
When filling out your life insurance application, it's crucial to be as honest as possible with all the rating factors. Providing accurate information ensures that your policy is properly underwritten so that you're covered according to your actual health and lifestyle. Misrepresenting details – whether intentionally or unintentionally – can lead to denied claims or policy cancellations when you or your loved ones need it most.
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More life insurance questions, answered
Who needs a life insurance quote?
If you're a multi-millionaire with no dependents and no debt, you may not need life insurance. However, if you're like most of us, and you have some debt and people who depend on you financially, you should consider purchasing a life insurance policy. It ensures your loved ones won't suffer financial hardships after you pass – even a small death benefit can help offset the cost of your funeral, making a stressful and emotional time a bit easier on your family.
What is the difference between whole life and term life insurance?
Neither term life insurance nor whole life insurance is the superior option – they are different products for different jobs. And sometimes, you'll want to have both.
Term life insurance is a policy that covers the insured for a specific period of time. Whether you select coverage for ten, twenty, or thirty years, the monthly or annual payment amount will remain the same – premiums are fixed regardless of any changes in your health. This makes term life insurance a cost-effective solution for individuals looking for coverage. Another advantage of term life insurance is that many policies can often be converted to permanent insurance, regardless of any changes to your health, job, or lifestyle.
So what’s the advantage of this? For one, getting coverage when you’re young and healthy makes it easier to continue being insured as your life goes on. If you get sick and then want to apply for coverage, it’s going to be a lot more difficult to get. Likewise, if you want to graduate to a whole life or participating life policy, it’s generally pretty easy to switch a term life plan over, rather than start fresh. So if you’re young, healthy, and are looking for simple coverage to protect your family, this type of policy may be just the way to go.
Permanent life insurance, on the other hand, is coverage that lasts for an entire lifetime. The cost of permanent life insurance is generally significantly higher than a term policy, given that the payout is guaranteed – while the life insurance company might not know when they’ll have to pay out, they do know that they will eventually. Common types of permanent life insurance in Canada include whole life insurance, universal life insurance, and term to 100 life insurance.
Before you jump into signing up for a permanent life policy, be warned that these can get expensive. Because the annual cost of permanent insurance is so much greater than term life, it's often not possible for younger individuals to pay into the high premiums. Instead, it can be a good idea to buy term life insurance and invest the difference in an RRSP, TFSA, or mutual fund. If you’ve managed to save up a good nest egg later in life, and you're maxing out your annual investment contributions, it might be a good time to look into a participating life insurance policy then. Of course, if you have a term life plan already, you want to make sure that you’re able to transfer it to a participating policy.
For more information, be sure to check out our blog: Term life vs. whole life insurance – which one is right for you?
What other types of life insurance are available?
While term and whole life are amongst the most popular policies, here is a brief overview of some specialized types of life insurance plans in Canada.
- No medical life insurance is exactly what it sounds like – a kind of life policy you can buy without having to undergo a medical examination. Many people prefer this kind of insurance because it's easier and less time-consuming to get and because it's a viable option for those with pre-existing conditions. No medical life insurance is often more expensive than a standard policy as insurance providers have less information to evaluate your health. People in good health tend to opt for standard policies, instead.
- Guaranteed life insurance falls under the category of no medical life insurance – the coverage is available without having to complete a medical questionnaire or undergo a physical exam. This type of insurance generally costs more than term coverage, and the payout is usually maxed out at a much lower rate (typically between $25,000 and $50,000). Because there is a lower payout, guaranteed life insurance is generally for people who have not been able to obtain alternate insurance. It’s ideal for those who are seeking coverage to cover potential funeral costs, and it is generally sought by elderly individuals.
- Mortgage life insurance is effectively a form of guaranteed life insurance. This type of coverage uses your life insurance policy to pay off your remaining mortgage upon your death. This can be a great option if you want to ensure that your dependents are able to remain in your house upon your demise – especially if they are unable to make the payments independently. With a mortgage life policy, your premiums will often be used against your mortgage as well, but when and if your mortgage is paid off, your premium will remain the same. It's important to note that your mortgage lender will be listed as the beneficiary in a mortgage life policy. So even if you pay off your mortgage in advance of your death, your dependents will not be entitled to your death benefit. For this reason, mortgage insurance is more restrictive than traditional life insurance – it's not advisable to purchase mortgage life insurance before other forms of life insurance.
- Joint first-to-die term life insurance is a policy that covers two individuals under one plan. As the name suggests, the policy pays out when one of the two named individuals dies. This term policy is generally cheaper than two individual life insurance plans, but it's also terminated after the first individual passes away. In this event, if the surviving party named in the insurance policy wants to continue to have coverage, they will have to re-apply individually.
What is a life insurance beneficiary?
The beneficiary is the person who will receive the payment of your insurance policy. You can name anyone you want – your partner, a family member, a dependent, or even a charity. And if you want, you can even name more than one beneficiary, as well as instruct the insurance company on how to allocate the premiums.
Your beneficiary can be either revocable or irrevocable – if your beneficiary is irrevocable, you need their signed agreement to change who is named. With life insurance in Quebec, if you name your spouse as a beneficiary, they automatically become irrevocable unless you explicitly designate otherwise.
Can you get life insurance with pre-existing conditions?
Although life insurance companies may deny you traditional coverage if you have a pre-existing condition, you can look into other options, such as a guaranteed life insurance policy. These policies are designed for those who typically won't qualify for other types of life insurance. Keep in mind that the death benefit is generally capped much lower while premiums will be much higher due to the added risk your condition brings.
At what age should a person get life insurance?
There isn't a designated age at which you should purchase your life insurance policy – it all depends on your own needs (and the needs of those that depend on you financially). The general rule of thumb is that life insurance will be cheaper the younger you are, so purchasing coverage early can help lock in cheaper premiums.
However, you might not need life insurance in your 20s if you don't have a mortgage or children. Once you do start accumulating debt and providing for other people, you may want to consider life insurance – you wouldn't want to leave your loved ones in financial trouble in the event of your passing.
How long does it take life insurance to pay out?
After a valid death claim is made, it generally takes between 14 and 60 days for a life insurance policy to pay out. Most of the time, however, you'll receive the benefit within 30 days.
What doesn't life insurance cover?
While life insurance covers most causes of death, here are a few situations in which a payout could be denied:
- Risky activities – Deaths due to high-risk jobs and activities, such as scuba diving, may not be covered, depending on the circumstances. If you engage in these, be sure to inform your insurer ahead of time.
- Suicide – While life insurance does generally cover suicide, there is usually a set period of time in which the death won't be covered – typically within the first two years of an active policy.
- Murder – If your beneficiary commits your murder (or is closely tied to it), they won't be receiving your death benefit. Instead, the money goes to either your contingent beneficiary or your estate.
- False information – Lying to your insurance company during the application process can be grounds for denying a payout when your beneficiaries need it the most. So it's best to stay truthful, even if you'll face higher rates.