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The average cost of life insurance in Canada ranges between $15 to $100 per month, says Life Insurance Advisor Erik Heidebrecht. The average cost of term life insurance rates in Canada is $26.55 per month for PolicyMe customers (age 40 and under, $500,000 in coverage, 10 year term).
Here's what you could expect to pay for life insurance, on average, based on data from 33 different Canadian life insurers:
45 and under? Term life insurance rates in Canada are even more affordable. Here are some sample rates for a 40 year old:
PolicyMe only sells its own term life insurance, and we make it fast, affordable and reliable to get covered. Check your PolicyMe price below.
The cost of life insurance in Canada partly depends on factors that are out of your control, like your age and gender. And it also may depend on factors that are in your control, like your health, lifestyle and coverage amount. Here's exactly what insurers consider when calculating your life insurance premiums:
Insurance companies usually give you your price in two steps:
And, spoiler alert: rates go up as we grow up. So, the sooner you lock in your premium the better. As the graph shows below, prices really start to climb once you hit your 40s (it's a mortality risk thing, not that we want to remind you).
PolicyMe's prices are 5-10 per cent cheaper than the Canadian competition, plus we let you skip the annoying advisor calls and endless paperwork. Apply online in 20 minutes or less (on average, for eligible applicants) and lock in your protection today.
How much you'll pay for life insurance depends partly on personal factors, like your age, gender and whether you smoke.
Prices are for $500,000 in coverage for a non-smoking man.
Term life insurance estimated costs by age (20 year term):
Whole life insurance estimated costs by age:
This chart shows how life insurance premiums break down by age and gender:
Younger people pay lower life insurance premiums since, statistically, they're less likely to pass away. And the great thing is that once you purchase a term life insurance policy, your price won't change for the entire length of the term, even if it's for 30 years.
Make sure you're getting a level term, though (like with PolicyMe). Yearly renewable policies that are available through Canadian companies like Cover Direct and Emma have prices that go up every year of your term.
Pushing 40 or 50? You can still get affordable life insurance. Term life insurance rates in Canada can cost as little as $30-40 a month from providers like PolicyMe. You'll pay a lot more for whole or no medical life insurance; think hundreds of dollars a month, not dozens.
Both prices are for 40 year olds buying a 20-year term insurance policy with $500,000 in coverage.
Your gender plays a role in determining how much ife insurance costs, because men have a shorter life expectancy than women, says Harvard Medical School.
Both prices are the industry average for a 35-year-old man for $500,000 in term life insurance coverage over 20 years. The non-smoker price is a 255 per cent decrease! Definitely a good reason to quit smoking.
Smokers pay much more for life insurance coverage because smoking is tied to serious medical issues like cancer, making smokers more expensive to insure.
You'll need to be nicotine-free for at least one year to qualify as a non-smoker.
And it may be tempting but don't lie about your health status (or lifestyle) on your application. Not only is it considered fraud, but you may also lose your coverage, leaving your family without a financial safety net.
The healthier you are, the lower your life insurance prices will be. That said, how much your price goes up really depends on your individual health condition.
For example, someone with type two diabetes would likely be declined for coverage if they're under 40 years old. Over 40 years old, you'd pay around 150% of the base price, depending on how well your diabetes is being managed.
Some insurers require applicants to undergo a medical exam and provide your medical history and your family medical history, though you may not have to.
Health conditions that may impact your life insurance costs are:
If you have been denied coverage or have a pre-existing condition, you can apply for no medical life insurance products, some of which approve you instantly without a medical exam. But these policies are much more expensive, sometimes three times as much as a term policy.
Buy life insurance as soon as possible if you have a pre-existing condition or a family history of medical issues as this will help you lock in the lowest rate. Prices only increase the older you get!
You may pay more for life insurance if you like to live life on the edge. Risky choices like high-risk hobbies (skydiving or scuba diving) increase the risk factor of covering you.
On top of this, insurers may review criminal history and motor vehicle reports to see how risky you are to insure. Driving violations or criminal convictions can affect your monthly price or get your application denied, but each insurer has its own rules.
Here's where the math gets complicated. Your life insurance premiums are calculated with standard industry ratings, from A to J or 1 to 10, with 1 being the most ideal and 10 being the riskiest.
Let's say you engage in a few high-risk hobbies and your life insurance company places you in the "C" rating class. You'd pay about 75 per cent more for life insurance.
Dangerous jobs, as classified by life insurers, would include jobs like:
Risky jobs can have serious real-world consequences. 1,071 workers passed away at work in 2021, reports the Association of Workers' Compensation Boards of Canada.
Different life insurers may have different definitions of what constitutes a dangerous job, so shop around to get the best life insurance quote.
The life insurance policy you go with will also have a big impact on how much life insurance costs.
The more life insurance coverage you get (i.e. the higher the death benefit is that your beneficiaries would get), the higher your premiums will be.
More coverage may not increase your price as much as you'd think.
Here's what someone aged 35 would pay for different coverage amounts:
The monthly cost of life insurance differs based on the type of coverage you choose, for example here are term life insurance rates versus whole life insurance rates:
Here are some basics about the two main types of life insurance policies you can buy in Canada.
Life insurance prices start at $22.50 for a 35-year-old man for a 10-year term with $500,000 in coverage and $31.32 for a 20-year term.
The shorter the policy length, the more affordable the life insurance policy. And most term options (like PolicyMe) are "level", meaning the premiums stay the same the entire term.
Read your policy before signing! Other types of term policies have premiums that go up incrementally, like a one-year renewable or a five-year renewable policy.
A 35-year-old man and woman can expect rates to start at $22.50 per month for a joint policy.
Joint life insurance is a single policy that covers two people under one premium. These policies are often cheaper than buying two separate permanent insurance policies.
Another option for couples is individual policies which let couples to pick their own lengths and coverage amounts. While this can sometimes be pricier than buying one joint life insurance policy, it's much more flexible.
PolicyMe offers the best of both worlds: couples can buy their own policies and get a discount in their first year when they apply together.
A 65-year-old man and woman can expect monthly premiums to start at $81.17 and $59.94 respectively for a 10-year term policy with $100,000 coverage.
Senior life insurance is often used for funeral expenses, estate planning and supporting your beneficiaries once you have passed. And it's still very much possible to get good coverage once you're older.
A child rider benefit can be tacked on to an average 20-term term policy for costs starting at $9.
But whole life insurance premiums for a 5-year-old child can start at $67.14 per month, which is pretty high.
Some families purchase life insurance for their children to lock in lower prices, using the policy as an investment vehicle for their child's future. One of Canada's leading providers of children's life insurance policies is Equitable Life.
PolicyMe offers free child coverage – at no extra cost – to every policy.
This means that if a policyholder's child passes away, the parents get $10,000 to help them financially during this difficult time.
When considering life insurance in Canada, one of the most critical decisions you'll need to make is determining the appropriate amount of coverage. The right amount of coverage will depend on various factors, including your financial situation, family needs, and long-term goals. Here are some key considerations to help you determine how much life insurance coverage you need:
A primary purpose of life insurance is to replace lost income if the insured person passes away. Consider your annual income and how many years your family would need that income to maintain their standard of living. A common rule of thumb is to aim for coverage that is 5 to 10 times your annual salary, although this can vary based on your specific circumstances.
Take into account any outstanding debts you have, such as mortgages, car loans, student loans, or credit card balances. Ensure that your life insurance coverage can cover these debts, so your family is not burdened with repayment after your passing.
If you have children or plan to support their education, calculate the future costs of tuition, books, and other educational expenses. Your life insurance policy should include enough coverage to fund these educational needs.
Factor in the costs associated with your funeral, burial or cremation, and any other final expenses. These expenses can add up quickly, and having coverage for them can ease the financial burden on your loved ones.
Consider the ongoing expenses your family will incur, such as childcare, groceries, utility bills, and other day-to-day costs. Ensure that your coverage is sufficient to cover these expenses for the foreseeable future.
Think about any unique financial needs or circumstances that apply to your situation. For example, if you have a special-needs child, you may require additional coverage to provide for their long-term care and support.
Consider your long-term financial goals, such as retirement savings, paying off a mortgage, or leaving a legacy for your loved ones. Your life insurance coverage should account for these goals to ensure they can be met even if you're no longer there to contribute.
Take into account any existing life insurance policies, savings, investments, and other assets that can provide financial support to your family. Subtract these amounts from the total coverage needed to avoid over-insuring yourself.
Remember that life insurance needs can evolve over time, so it's essential to review your coverage periodically and make adjustments as necessary, especially after significant life events like marriage, the birth of a child, or changes in your financial situation.
Life insurance offers a multitude of advantages to individuals and families in Canada. Whether you are young and just starting a family, in your prime earning years, or enjoying your retirement, having a life insurance policy can provide peace of mind and financial security. Here are some key benefits of having life insurance in Canada:
One of the primary benefits of life insurance is the financial security it provides to your loved ones in the event of your untimely passing. The death benefit paid out by the insurance policy can help replace lost income, cover outstanding debts, and ensure that your family can maintain their standard of living.
Life insurance can play a crucial role in estate planning. It can help cover any estate taxes that may be owed upon your death, ensuring that your assets are passed on to your heirs without the burden of a significant tax bill. This allows your loved ones to inherit your wealth with minimal financial strain.
Life insurance can be used to pay off outstanding debts, such as mortgages, car loans, or credit card balances, so your family is not burdened with financial obligations after your passing. This ensures that they can maintain their financial stability and avoid the risk of losing their home or assets due to unpaid debts.
If you have children, life insurance can be a valuable tool for securing their education future. The proceeds from a life insurance policy can be earmarked for educational expenses, such as tuition fees, books, and other educational costs, ensuring that your children have access to quality education.
For business owners in Canada, life insurance can be a crucial component of succession planning. It can provide funds for the buyout of a deceased partner's shares or help ensure the smooth transition of the business to the next generation without financial disruption.
Having a life insurance policy can offer you and your family peace of mind, knowing that they will be financially protected in the event of your passing. This peace of mind can alleviate stress and anxiety, allowing you to focus on enjoying your life without worrying about the financial future of your loved ones.
Certain life insurance policies in Canada offer tax benefits. The death benefit is typically paid out tax-free, and some policies also offer tax-deferred growth on the cash value component, allowing you to accumulate savings on a tax-advantaged basis.
There are eight key ways to crunch the numbers and get the lowest prices when you shop for a life insurance policy.
1. Buy early: It's best to purchase life insurance when you're younger and lock in a lower price, as rates increase each year.
2. Shop around: Get quotes from various life insurance companies to compare and find the best deal.
3. Consider a term life insurance policy: One of the easiest ways to save money — permanent insurance policies last your entire life but are much more costly.
4. Bundle your policy: Some insurers allow you to bundle your life insurance policy with other types of insurance, like home or car insurance, for a discount.
5. Look for discounts: Some companies offer discounts if you apply as a couple. PolicyMe offers 10% off the monthly cost of life insurance in the first year if you apply together.
6. Maintain a healthy lifestyle: Stay in good health by managing your weight, quitting smoking and avoiding high-risk hobbies.
7. Don't skip the medical exam: If you don't have pre-existing medical conditions, stay away from pricey no medical policies. You may not even have to do a medical exam with traditional policies.
8. Adjust your coverage: You don't need to purchase more life insurance coverage than you need — you can always adjust the death benefit or length of your policy.
Inflation doesn't usually impact the cost of life insurance if you already have a policy. You may experience higher life insurance premiums if you're shopping for a new policy or renewing your policy.
Inflation drives up costs, making things pricier over time. It also impacts interest rates, which means higher returns on investments like bonds, savings accounts, and some insurance policies, like permanent policies. This means your cash value may go up, but the purchasing power of your death benefit may be lower.
A life insurance premium is the amount of money paid by the policyholder to the insurance company to get covered. Premiums are most commonly paid on a monthly basis, but some companies allow for annual payments instead.
Life insurance premiums are calculated at the time of the policyholder's application and are based on various factors, like the type of life insurance product, the age, gender, smoking status and health of the policyholder i.e. the likelihood of claims being made.
1. WinQuote Canadian Products. WinQuote by Equisoft. Accessed May 2023. https://www.winquote.net/
2. Hobbs, S., Director of Policy at Canadian Life and Health Insurance Association. Interview conducted by Hanna Horvath. 2023.