Thinking of taking out life insurance but not sure what policy options are available in British Columbia? Or how much it will cost you per month?

Don’t worry, we’ve got you covered.

In this post, we'll cover you everything you need to know about life insurance in BC and secure coverage that fits your needs and budget. So let's dive in.

What types of life insurance are available in British Columbia

Assuming you qualify for traditional life insurance, which involves thorough medical underwriting, your three main options are: 

1. Term Life Insurance

Term life insurance is designed to provide cover for a specific period. You can select the desired period, along with the coverage, at the time of purchase. If you pass during this period, the insurer will pay the policy proceeds to the person or persons named as your beneficiaries.

2. Whole life insurance

Whole life insurance offers lifelong protection, as long as you continue to make your monthly payments (premiums). It offers guarantee that your loved ones will receive the death benefit no matter what age you pass away. 

Along with other permanent life insurance, whole life plans accumulate cash value over time on a tax-deferred basis. This means you won’t have to pay tax on investment gains until you withdraw the cash value. You can access it at any time by withdrawing money from it, like you do with a bank account, or taking a policy loan against it. 

3. Universal life insurance

Think of universal life insurance as a close cousin of whole life, but one that offers more flexibility and fewer guarantees. Universal life insurance provides permanent coverage and builds cash value. However, unlike whole life, the cash value growth is not guaranteed. Rather, it increases or decreases, depending on the market rate. Another distinct feature of universal life plans is that they give you the flexibility to raise or lower premiums, within certain limits. 

Are no medical life insurance options available in British Columbia?

Yes, of course. If you don’t want to take a medical exam or want to secure coverage as fast as possible, simplified issue life insurance could be an option. With simplified issue, you can skip the medical exam and simply answer a few questions about your health and lifestyle. Because of this, the approval process is much faster compared to traditional policies. Simplified issue policies often come in both term and whole life insurance options.

Another option for no-medical life insurance is guaranteed issue life insurance. However, it is designed mainly for people who are over 50 and can’t qualify for standard life insurance. Guaranteed issue plans are more expensive and have lower death benefits. 

How much does life insurance cost in British Columbia?

The cost of life insurance varies significantly based on individual circumstances. As a general rule, the higher the risk of insuring you, the more you’ll pay for coverage. In addition, opting for a policy that lasts your entire lifetime is pricier than plans with a fixed policy term. 

For your reference, below are the average rates provided by life insurance companies in BC for three different plans. 

• $13 a month for a 20-year term life plan with a death benefit of $200,000 for a 30-year-old, non-smoking female
• $250 a month for a $500,000 whole life policy for a 35-year-old, non-smoking female
• $425 a month for a $600,000 universal life insurance cover for a 40-year-old, non-smoking male

What factors affect the cost life insurance in BC?

Many factors impact your life insurance rate. Again, generally speaking, the more risk you present as a policyholder, the more you’ll pay for coverage. 

• Age: Life insurance is significantly more affordable in your 20s and 30s than it is in your late 40s or 50s. This is because the younger you are, the lower the risk of dying. So consider locking a lower premium rate earlier in life. 
• Health: Individuals with a clean medical record pay less than those with pre-existing illnesses (e.g. diabetes or arthritis). 
• Gender: Women tend to live longer than men on average and hence receive better rates.  
• Lifestyle choices: Expect higher premiums if you smoke or drink heavily. If you are overweight, then too you’ll see higher rates. 
• Policy type: Whole and universal life insurance are significantly more expensive than term life insurance. This is because they provide coverage until your death and build cash value. 
• Payout amount: The amount you choose to cover for affects the cost of life insurance. As a general rule, the higher the payout amount, the higher the monthly premium. 

How much life insurance do I need in British Columbia?

You need enough life insurance to ensure your loved ones will be able to live comfortably after you pass away. Experts recommend a coverage amount of 10-15 times your annual income, but individual circumstances, such as being the sole provider, having a mortgage, or being a parent of young children, may necessitate higher coverage. 

A quick way to come at a ballpark figure is to multiple your annual income by the number of years you think your family would need support. 

Another method is to add your mortgage, debts, household bills, and other expenses and figure out how much money a year your dependents would need after you’re gone. Then, multiply that figure by the number of years your loved ones would need financial support to work out the amount that will be sufficient for them. You might want to factor in future family expenses, such as marriage and college fees. 

You can also use our life insurance calculator to get an estimate tailored to your situation. Simply enter a few personal and financial details, such as your age, family size, and yearly income, to get an instant estimate of how much coverage you need. 

Once you know the amount of cover you need, one of our agents will help you secure the right policy at the best possible price. 

Which are the best life insurance companies in British Columbia? 

Sun Life, Canada Protection Plan, BMO Insurance, Beneva, Manulife, RBC, iA Financial Group, and Empire Life are some of the top-rated insurers in BC. 

How does life insurance work in British Columbia?

Life insurance is a legal agreement between you and the insurance company. The insurer promises to pay the sum assured to your beneficiary after you pass away, as long as you keep up with the premium payments. 

Here’s how life insurance work in nutshell:

• You determine the type of life insurance and amount of coverage you need
• You then get quotes from multiple providers and compare them or contact an insurance broker who can do that for you 
• You apply with the insurer that’s offering the best deal and take a medical exam, if required
• Once you are approved, review the policy contract, sign it, and pay the first premium 
• Your policy becomes effective upon payment of the initial premium and remains valid until the term's end or throughout your lifetime, depending on whether it’s term or permanent life insurance 

Conclusion

Life insurance is not just a financial product; it’s a peace of mind for you and your loved ones. In British Columbia, it can be a practical, cost-effective way to safeguard your family’s financial future.

At Dundas Life, we’re here to help you navigate your options so you can pick the best life insurance coverage for your circumstances. Book your free consultation today.

FAQs

Can I get life insurance without a medical exam in British Columbia?

Yes, you can. Many insurance companies in BC offer simplified issue term life insurance and simplified issue whole life insurance. You may consider either if you are in reasonably good health but don’t want to go through the hassle of a medical exam. And if you can’t qualify for traditional life insurance because of serious health concerns or some other reason, consider guaranteed issue life insurance. 

Is it legal to sell my life insurance in BC?

No, it’s illegal to sell your life insurance policy to a third-party in British Columbia. 

Is life insurance taxable in British Columbia?

The life insurance payout is not taxable in BC or anywhere else in Canada, except in the following few situations: 

• When you haven’t named a beneficiary
• When you have named your estate as the beneficiary
• When the beneficiary decides to receive the payout in installments, in which case the interest earned on the death benefit is taxable

At what age should you get life insurance in British Columbia?

As long as you’re legally considered an adult, there’s no ‘best age’ to get life insurance in BC. But it is a good idea to get it sooner rather than later. Life insurance premiums go up with age, so getting a policy early can save you money in the long run.