Best Life Insurance For Parents (2023 Guide)

Peer reviewed by
Ivana Govedarica
, Certified Life Insurance Advisor
In This Article

Key takeaways

  • As a parent, having life insurance means your children will have a financial safety net in the event of your passing
  • If you pass away, the death benefit can help pay for your family's expenses and maintain their current standard of living
  • The affordable premiums and flexible term lengths make term life insurance the best choice for many families

What’s the best life insurance policy for parents?

“What makes something the “best” life insurance for parents? I’d define it as the affordable option for the coverage they need," says life insurance advisor Ivana Govedarica.

"The best life insurance for young parents, single parents or anyone looking for affordable yet robust coverage is term life insurance."

Term life insurance is a great choice for parents because: 

  • Term life insurance is much more affordable
  • Your premium rate is locked in for the full term
  • The payout for your beneficiaries is tax-free in Canada
  • You only pay for it when you actually need it (while the kids are young, while you pay off the mortgage, etc.) 
  • Choose how much coverage you want and your term length

Even though it's so important for parents, 33% of parents stated they don't have life insurance. The majority of which citing costs as the main reason why. But you might be surprised to find out how budget-friendly term life insurance can actually be.

And with PolicyMe, every policy comes with comes with $10,000 of free life insurance for each of your children.

Should parents buy term or whole life insurance?

For most parents, term life insurance is better than whole life insurance. There are two key reasons for this:

1. Term life insurance allows parents to tailor their coverage; buying just enough to cover them until the kids are grown or until retirement. For many people, there’s no need to have life insurance past those milestones. 

Ideally, your home will be paid off, your outstanding debts cleared, and your children will be financially independent.

So limiting your coverage to a set period of time is actually a good decision. You likely won't need life insurance your entire life. 

2. A permanent life insurance policy for parents can be very expensive. 

Most young families just starting out won’t want to allocate such a significant portion of their budget towards this type of life insurance — they could use that money for other things.

"But because whole life insurance policy is so expensive, you may want to consider purchasing a small permanent plan in conjunction with a larger term policy in order to minimize costs," says Govedarica.

Best life insurance companies for parents

With so many insurers out there, how can you know which one offers the best policies for you and your family?

Here’s a quick rundown of the best life insurance in Canada for parents to help you decide.

PolicyMe: best life insurance for parents

Who they are: Backed by Canadian Premier and fully underwritten (which means better rates for you), PolicyMe was founded in 2018. They offer Canadian life insurance products online, making it easy and accessible for anyone to get the coverage they need.

In November 2022, PolicyMe announced the launch of their critical illness insurance product, with up to $1 million in coverage.

What they offer: PolicyMe offers some of the lowest term life insurance premiums in the country. In addition, their licensed advisors aren’t commission based, so you can be confident you’re getting the best advice for your situation.

The convenience factor is a big plus for busy parents. PolicyMe has made it easy to get a quote in a few clicks, paired with an application you can complete in minutes.

Cost: rates start at around $23/month for a 35-year-old woman and $31/month for a man of the same age.

Perks

  • Couples who apply together get a 10% discount in their first year
  • Every policy has free child coverage ($10,000 per child)
  • Applications get an instant decision, so you know if you're approved right away or if more information is required
  • Non-commissioned Canadian advisors are available 7 days/week via phone or email
  • You can upgrade or extend your policy during the first five years of coverage
  • You can add critical illness insurance to your coverage

Drawbacks

  • No physical locations
  • Only offers term life insurance products
  • No option for conversion to whole/permanent life insurance policy

Get affordable term coverage without cutting into the daycare budget. See how much PolicyMe coverage might cost you in just a few clicks.

Bank of Montreal (BMO): good life insurance option for parents

Who they are: First founded in 1817, the Bank of Montreal (also known as BMO) offers a full slate of banking and insurance options for Canadians.

In November 2022, they were named the top ranked financial institution by the World Benchmarking Alliance's for "helping make progress in support of a just and sustainable economy."

What they offer: Choose from various standard life insurance options, including both term and permanent policies.

If you’re interested in purchasing a policy through BMO, you can get an estimated life insurance quote online, but you’ll have to go through one of their advisors and possibly even meet them in person.

Cost: Rates for term life insurance start at $26/month for a woman and $33/ month for a man, on average.

Perks

  • You can convert your term policy to a permanent one
  • They have an excellent financial rating, over 200 years in the business
  • You can renew your coverage at the end of your term

Drawbacks

  • You have to buy coverage through a commissioned advisor
  • Depending on the coverage you’re looking for, you may need to meet with a representative in person
  • The process cannot be completed online

Canada Life: customizable life insurance for parents

Who they are: Canada Life is the country’s second-largest insurance company. The company recently celebrated 175 years of business, founded in 1846. They have a financial strength rating of A+ and manage over $220 million in assets.

What they offer: While Canada Life provides many of the same life insurance options as their competitors, they do have a pretty extensive list of add-ons and riders so that you can customize your policy.

Cost: Rates start at $29/month for a 35-year-old woman and $36/month for a 35-year-old man, on average. The entire process, from quote to application to approval, requires an advisor; you can’t complete it online.

Perks

  • Your advisor can arrange a virtual meeting or one on the phone
  • You can renew your term policy or convert it to a permanent one
  • Couples can apply together for a joint life insurance policy (joint first-to-die)
  • There are many rider options for their single and joint policies, like child coverage and business growth riders

Drawbacks

  • Online reviews contain many customer complaints, reporting long wait times, poor customer service and unreasonable claim processing times
  • There’s no way to get an online quote or access an application tool, you must contact an advisor
  • Premium costs are high compared to other insurers
  • The approval process can take as long as ten weeks

Wawanesa Life: a new(ish) option for parents, with a storied history

Who they are: Founded in 1896, Wawanesa provides investment services, employee benefits and insurance; with life insurance representing just a small slice of their business.

AM Best, a credit ranking agency, has given them a score of A for their Life/Health services. What does that mean, exactly? AM Best states: "The ratings reflect its balance sheet strength, as well as its adequate operating performance, neutral business profile and appropriate ERM."

What they offer: Wawanesa offers a range of term and permanent life insurance policies. Their term policies are renewable, convertible and available in lengths of 10, 15, 20, 25, 30 and to age 80.

Cost: Rates start at around $28.80/month for a woman and $36.66 per month for a man.

Benefits

  • You can be covered up until you're 100 years old
  • A variety of optional riders are available for an additional cost
  • Rates can be competitive for healthy applicants
  • Their payment options are flexible, allowing you to pay by credit card, annually or monthly

Drawbacks

Finding life insurance for parents with health problems

If you or your partner have serious health issues, finding affordable life insurance can be challenging. But it’s possible! Here's our recommended 4-step course of action for parents with health issues:

  1. Look for simplified issue or no medical life insurance coverage. These policies don’t require a medical exam; you may not even need to answer any health questions. However, because you’re riskier to insure, it’ll be reflected in the form of higher premiums.
  2. Guaranteed issue life insurance can be a good “last resort” option if you’ve been denied elsewhere already. But coverage amounts will be much smaller and premiums much higher.
  3. Don’t write off term life insurance altogether, especially if cost is a concern. Sometimes, you may even get more affordable coverage with a health exam and questionnaire. 
  4. Bottom line: make sure you shop around before you settle.

Should both parents have life insurance?

Yes, it’s a good idea for both parents to have life insurance. Life insurance provides financial security against a worst-case scenario: if one or both of you pass away.

While it’s generally unlikely if you’re young and healthy, if there's only one insured parent, this leaves a gap in your protection. For example, what if the uninsured partner passes?

Even if only one parent works outside the home, it’s still worth considering purchasing a policy for the stay-at-home spouse.

If they were no longer in the picture, new life expenses would crop up (and add up!). It’d likely cost a significant amount to cover the work they do around the home, like childcare, cleaning and general family management. 

Next steps: finding the best life insurance for parents

  • Figure out whether a term or permanent policy works better for your family.
  • Decide how much coverage you need to buy, and in the case of term insurance, how long you want your policy to last. (Our life insurance calculator can help with this - it'll even tell you if you don't need life insurance at all).
  • Consider whether there are riders or benefits you want to include in your policy. For example, PolicyMe offers free child coverage, at $10,000 per child.
  • Make a shortlist of insurers you're interested in reaching out to, and get quotes to compare.
  • Apply to the one that meets your needs the best! If you're denied, you can try another insurer.
  • Read and sign your policy!

Applying for life insurance to protect your family is easy and convenient. Get started with our no-obligation rate calculator below!

FAQ: Life insurance policies for parents

Why do parents need life insurance?

Parents need life insurance coverage to protect their families if something happens to them. Life insurance is a critical tool for providing financial protection for their loved ones (like kids!) who depend on their income.

If you know your partner will have trouble juggling the expenses involved in raising the kids, making the mortgage payments and paying off any debts you share, then it only makes sense to have a life insurance policy in place. So is it smart for parents to get life insurance? Absolutely!

How much life insurance do parents need?

Ideally, a parent needs to buy enough life insurance to help their families maintain their current standard of living in the event they pass away. To get started, we recommend looking at your current expenses, debts and financial obligations.

Many parents will purchase enough coverage to pay off the home, handle the bills, cover funeral costs and help with post-secondary costs for their children.

You’ll also need to consider how long you want your policy term to be. For example, some families will choose coverage until the children are financially independent. Others may prefer to have coverage up until they retire.

Our life insurance calculator for Canadians can help you with the decision and give you some ballpark life insurance rates.

Laura McKay

COO & Co-Founder

About the Author

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