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Have you ever wondered how much is life insurance in Canada?
Depending on the type of life insurance coverage you choose, your life insurance premium could be anywhere from a few dollars to a few hundred dollars per month.
But what's the right amount of coverage for you and your children? Read on to find out more about life insurance premiums and get some tips for finding the best deal, taking into account your unique circumstances and ways to manage your debt effectively.
How much does life insurance cost in Canada?
The average life insurance premiums in Canada depends on both personal factors, like age and health, and the specifics of your life insurance plan as there are 5 main types of life insurance. A 30-year-old healthy individual may pay less than $15 per month for a 10-year lowest price term life insurance plan worth $100,000. The same insurance plan, however, may cost more than $100 per month for a 60-year-old smoker.
That is why assuming you'll be paying the average life insurance premiums in Canada is not realistic. Find your cheap life insurance quote to find out how much you’ll have to pay for this kind of coverage and how much you'll need to pay for things like debts, education costs, and other family financial obligations.
Some of the key factors insurers look at include:
Age
Life insurance cost increases as you grow older. Statistically speaking, the older you are, the higher your risk of dying.
Life insurance is cheapest when you’re young and healthy because the risk assumed by your insurer is low. If you buy term life insurance early in life, there’s a good chance you’ll outlive the life insurance policy term and the life insurance company won’t have to pay a claim.
The same logic applies to permanent life insurance. When you buy a life insurance plan in your 20s, early 30s, or pay for life insurance for your child, there's a good chance you’ll pay life insurance premiums over a longer period. So the cost and risk get nicely spread out for the life assurance company.
All else being equal, people in their 40s, 50s, 60s, 70s, and above will pay more for coverage than younger people.
Gender
Women generally live longer than men. In Canada, the average life expectancy for women is 84 compared to 80 for men. Because of this disparity, women pay less for life insurance coverage than men.
Health
Health is one of the most critical factors in determining how much life insurance costs in Canada, as a healthier lifestyle can lead to lower life insurance premiums.
A healthier lifestyle is not only good for your body — it is also good for your life insurance premiums, as this article will cover. In many cases, taking control of your health can lead to lower premiums, especially if you can mitigate risk factors associated with certain health conditions.
Insurers like healthier applicants, whether they're from Manitoba, Saskatchewan, Ontario, Alberta, or British Columbia, because they are likely to live longer. As such, they reward them with lower life insurance premiums.
Insurers in Ontario, Alberta, British Columbia (or any province) may ask you health-related questions to assess your health. They may also require a medical exam and access to your health records or request an attending physician statement. However, there are also some life insurance products that don't require medical exams, offering a simplified form and faster application process for those who prefer not to undergo a medical examination.
One of the factors insurers consider is your body mass index (BMI), as shown in your medical exam. That’s because it is a useful indicator of health. High blood pressure, diabetes, and heart problems are just a few examples of illnesses linked to higher BMIs. People with higher BMIs often pay higher life insurance rates. Policy add-on rider options and additional coverage for specific expenses, such as funeral expenses, may also affect the rates.
Insurers also check whether you are taking medications for any health condition that could impact your life expectancy. If you have an underlying health condition, such as diabetes, your life insurance premium will likely be higher. Additionally, a history of serious illnesses, such as cancer, can increase your life insurance premiums.
If you have any questions about how much life insurers will charge you or which policy type to choose, speaking to an advisor can be beneficial.
Family medical history
When applying for coverage, you may wonder how much life insurance costs in Canada and whether your family medical history will affect your rates. Insurers will want to know if any of your parents or siblings under the age of 60 have suffered from certain medical conditions.
Your family’s medical history can impact your life insurance premiums because insurers see it as a predictor of your own health. If a loved one suffered from a hereditary disease, you are more likely to have it as well. The difference in health status between family members, however, can depend on genetic factors, experience, and lifestyle choices.
A family history of serious health conditions may be seen as a risk factor, potentially leading to higher premiums for the policyholder.
Diseases that run in the family include:
- High blood pressure
- Diabetes
- Heart disease
- Stroke
- Some types of cancer, like breast cancer
- Dementia
- Alzheimer’s disease
- Parkinson’s disease
- Mental illness
- Multiple sclerosis
Occupation
Life insurers look at your occupation when calculating your life insurance costs. Your cost of life insurance depends on how risky you are to insure. If your job requires you to perform dangerous duties, your premiums are likely to be higher. Some jobs, such as construction or mining work, may face higher rates due to the increased risks involved. Insurance providers aim to strike a balance between their goal of covering customers and keeping costs reasonable.
While each life insurance company has its own definition of “dangerous”, it generally includes anything that increases the risk of fatal injury or death. Examples of jobs that can classify you as a high-risk individual include:
- Pilots
- Police officers
- Race car drivers
- Astronauts
- Soldiers
- Firefighters
If your job has a higher degree of risk, the insurer may offer standard rates but charge an additional fee to cover potential hazards associated with your line of work. This flat fee varies from one insurer to another.
However, if your job or situation is extremely risky, life insurers may deny you coverage altogether. People working in war zones or coal mines often find it difficult to get cheap life insurance coverage, as do kids and seniors driving without auto insurance. This makes sense, as insurers must account for increased dangers.
Hobbies
Living life on the edge has its perks — but an affordable life insurance premium is not one of them, especially for seniors.
Each insurer has its own rules and processes for determining risk and your security, but one thing is certain. If you have a high-risk hobby, you will likely pay higher life insurance rates due to the increased likelihood of accidents.
So what makes a hobby dangerous?
As far as your insurer is concerned, any activity that increases the chance of you dying of an unnatural cause is dangerous. Some hobbies that can result in a high-risk classification are:
- Surfing
- Rock climbing
- Scuba diving
- Adventure travel
- Skydiving
- Mixed martial arts
Types of life insurance policy
Life insurance policies are either term life insurance or permanent. Term life insurance offers coverage for a specified period. In contrast, a permanent life insurance plan covers you for life. Many permanent life policies also include a savings component, called cash value.
However, lifelong protection and the cash value component comes at a price. Premiums for a permanent life policy can cost several times more than that of a comparable term life insurance plan. This is why it's important to explore all the choices available to you, including mortgage insurance options and consulting with a licensed advisor to understand the best policy for your needs.
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Policy term
This variable applies only to term life insurance since a permanent life policy lasts as long as you do.
The longer the policy term, the more you will have to pay for it. That’s because the chances of the insurer having to pay the death benefit amount are higher for a Term 30 policy than, say, a Term 10 policy.
Policy amount
Your policy’s death benefit amount directly impacts the cost of life insurance. If it goes up, the cost will increase too. For example, a10-year term life insurance plan with a death benefit amount of $5 million will be pricier than a $1 million policy having the same term.
It's important to carefully consider your investments and estimate the right amount of coverage for your situation. To do this, you can use a life insurance calculator to help determine the ideal payout in the event of your death.
Policy Riders
A life insurance rider is an add-on that enhances your coverage. But that doesn’t mean riders are right for you.
Most riders require an additional premium payment, so choose only those that you really need. Just like with any other life insurance product, the cost of a rider is lower when there’s less chance of filing a claim (you may even get a discount).
Term life insurance rates by age chart
Age is a key factor in determining the cost of life insurance in Canada. The cost of life insurance goes up with age. That’s because the older you are, the higher your chance of dying. In other words, a50-year-old will almost always pay more than a 30-year-old, even if both are in good health.
However, when you are young, your monthly premiums don’t increase so much for every year that you age. But once you cross 50, the jump is significant, as the table below shows you.
Term life insurance rates by gender chart
Gender plays a big role in how much you pay for coverage. On average, men pay 38% more than women for the same life insurance plan.
It’s not like life insurers don’t like men or like them less than women. It just so happens that women have longer average lifespans. They also are less likely to have riskier lifestyles and jobs. All these facts play into their rates, especially for term policies that stretch into your senior years.
Cost of term life insurance by policy size
We all want to leave our loved ones as big a financial safety net as possible. However, policies with a larger death benefit amounts cost more. Therefore, it’s important you look at the term life insurance chart and pick a policy that meets your long-term financial goals and also fits your current budget.
Cost of term life insurance by policy length
The life insurance chart below shows quotes for 10-, 20-,and 30-year term life insurance policies. As expected, the longer the term of the policy, the higher the cost.
Cost of permanent life insurance
Permanent life insurance also know as life assurance is not as simple as term life insurance. Since it covers you for life, it is more expensive than term life insurance which only covers you for a specific period of time. As a result, it's important to carefully assess your financial needs and take into account all the factors, such as age and existing disability insurance, when considering different life insurance options.
Most life assurance policies also double up as an investment tool. They also offer tax benefits you can take advantage of. Due to these factors, offering a generic quote example for this life insurance product is next to impossible. To determine your life assurance cost of your permanent life policy, we recommend you compare quotes and speak to an independent insurance broker.
Conclusion
The average cost of life insurance in Canada depends on your personal factors and the specifics of the coverage you want, answering the question of how much does life insurance cost in Canada.
Age, health, and smoking status are some of the most important personal factors in determining the cost. Younger, healthier, and non-smokers usually get the best rates. Also, permanent life insurance is more expensive than term life insurance. Speak to an experienced life insurance advisor to find out the best life insurance plan at the best price.
Frequently Asked Questions
Gregory Rozdeba is the CEO of Dundas Life, Canada’s leading digital insurance brokerage. He has over 9 years of experience in the life insurance industry. Gregory previously served as Director of Sales at a Toronto-based insurtech firm, taking the company from no product to raising over $7.6M+ in venture capital. Gregory holds a Bachelor of Finance & Accounting from Ontario Tech University and a Master of Information Management from FH Joanneum.
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