How much does life insurance cost in Canada?
The cost of life insurance is unique to each Canadian and varies by product, term length and coverage amount. Find your price by comparing free personalized life insurance quotes from Canada’s top providers.
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What's the cost of life insurance coverage?
Matt Hands, VP, Insurance
Life insurance is one of the most important financial products you will buy. It guarantees that your family and dependents will be cared for if you pass away. At its core, life insurance transfers your financial risk of death to an insurance company. In return for your premiums, the company promises a payout to help cover expenses for your family.
But how much does life insurance cost? Unfortunately, there’s no simple answer because, like life, it’s complicated. With many variables impacting life insurance pricing, we’re here to break it all down for you.
What factors influence the cost of life insurance?
Insurers calculate premiums based on the policyholder's associated risk. Any factor that puts you at higher risk of dying will increase the price of your premiums—generally, insurers assess risk based on these core factors.
Age
Older individuals have a shorter life expectancy and are likelier to pass away during a term policy, making their premiums more expensive. Some policies are priced purely on age, meaning older people will always pay more for life insurance.
Health
Premiums will be higher if you're in poor health or at an elevated risk. Younger people may only be required to answer a health questionnaire, whereas older individuals may need to submit a doctor’s letter or undergo a medical exam.
Gender
Women have a longer life expectancy than men, so they present a lower level of risk to life insurance companies. As a result, life insurance premiums for women are 10-25% lower than those for men.
Smoking status
Smoking can double your life insurance rates. Every policy asks about smoking status, so you won’t be able to escape it unless you quit. Twelve months without smoking will consider you a non-smoker.
Occupation
People with dangerous occupations like truck drivers are at more risk than people working in low-risk jobs, like in an office. As such, high-risk workers will face higher life insurance premiums. The same goes for high-risk hobbies.
Policy type
Term life insurance is generally cheaper than permanent life insurance. In a term life policy, the death benefit could expire if the policyholder does not pass away. Permanent life policies guarantee the death benefit, making the premiums higher in cost.
Term length
The cost of your premiums will be determined by the length of coverage you choose. A 5-year term policy typically costs less than a 30-year term policy because there is a lower risk of a death benefit payout.
Coverage amount
The more coverage you purchase, the higher your premiums will be. Having more coverage means your insurer will have to pay a larger death benefit if you pass away, resulting in costly premiums.
What is the average cost of life insurance by coverage amount?
Here are examples of term life insurance premiums you might pay based on the coverage amount you choose. Keep in mind that every life insurance company is different, every person’s risk factor is different, and the ‘generic’ price of insurance can fluctuate daily based on the interest rate and expected market returns. As a result, the numbers below may not be 100% accurate for you.
To get a personalized quote, compare life insurance quotes and see what’s available.
How much is a $50,000 life insurance policy?
How much is a $100,000 life insurance policy?
How much is a $300,000 life insurance policy?
How much is a $500,000 life insurance policy?
How much is a $1,000,000 life insurance policy?
How much is a $4,000,000 life insurance policy?
How much is a $10,000,000 life insurance policy?
These examples cover a 20-year term, Canada's most popular option. However, depending on your needs, you can purchase term insurance coverage from 10 years up to 100 years, or you could look for a more permanent form of coverage with whole life or universal life insurance.
As shown in the above examples, premiums increase as you age, and females typically pay around 10-25% less than males. These examples are based on non-smokers. Smokers will generally pay premiums that are between 50-100% higher. Other factors may come into play to calculate your rate, but whether they’re considered varies between insurance companies and policy types.
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What is the cost of permanent life insurance?
Permanent life policies, like whole life insurance and universal life insurance, differ from term life policies because they offer lifelong coverage. As a result, permanent insurance is far more expensive than term insurance, as your policy is guaranteed to pay out. However, because premiums are calculated long-term, they are typically locked in for life, so you’ll pay the same premium now as you will in 30 years.
Understanding the value of permanent life insurance is more challenging than term life insurance because these policies often include an investment component through cash accumulation or active investing. There are also tax benefits you can take advantage of that supply even more value beyond the coverage provided. These and other complicating factors make it virtually impossible to offer a generic example for permanent insurance.
To get an accurate cost of permanent life insurance, compare quotes online and speak to an insurance broker or agent. There’s no risk in doing this, as you’re never obligated to buy a policy.
Common questions on the cost of life insurance
How do I get cheap life insurance in Canada?
What is a life insurance premium?
Is life insurance worth it?
How much life insurance do I need?
Matt Hands, VP of Insurance
With 6+ years of experience at Ratehub.ca, Matt’s focus has been on growing its newest business unit, Insurance. He is a thought leader and a valuable resource to respected publications across Canada. read full bio