How Much is Life Insurance in Canada? + Factors Affecting the Cost

The decision to get life insurance not only impacts you and your family but also your monthly budget. It’s important to know how much life insurance will cost you in Canada, depending on your age, lifestyle, term, and many other factors.  

This article will dive into the cost of term and permanent life insurance per month, per year, and based on other things such as age and health. 

There is no one set price for everyone, so if you want to find out how much it would cost, get a quote from one or a few of the top life insurance companies in Canada. 

Average Cost of Life Insurance in Canada

The cost of life insurance varies by person, company, and term. On average, the cost of life insurance in Canada is anywhere between $50 to a few hundred dollars per month, depending on different factors such as your health, age, and gender. 

Generally, the older you are and the greater the risk of poor health conditions, the more expensive life insurance will be. 

Additionally, term vs whole life insurance premiums have different costs. 

How Much Does Term Life Insurance Cost? 

Term life insurance generally has lower premiums than permanent life insurance, as it lasts for a shorter duration (typically 10 to 30 years) and has more limited payout options. 

This type of life insurance will typically cost under $100 per month for a relatively healthy person. 

The reason why? There is no cash value component as it only provides your beneficiaries with death benefits, and there is a reduced likelihood of payout compared to whole life insurance. 

To provide an idea of the exact cost, we got quotes from two top life insurance companies:

For a 23-year-old female living in Ontario who doesn’t smoke, the cost of a $500,000 coverage over 30 years costs an estimated $25.52 per month from PolicyMe and an estimated $16.99 per month from Manulife. 

To give you an idea of how expensive it can be as you get older, here are sample quotes for a 58-year-old non-smoking female living in Ontario. 

A $500,000 coverage over 10 years costs an estimated $92.40 per month from PolicyMe and an estimated $122.44 per month from Manulife. 

How Much Does Permanent Life Insurance Cost? 

Permanent or whole life insurance will work out to be more expensive than term life insurance. However, it can be better than term life insurance policies as it will pay out at some point. 

Due to this type of life insurance covering you for your entire life, you could end up paying a few hundred dollars per month, anywhere between 5 to 15 times the cost of term life insurance. 

Most life insurance companies don’t provide estimated quotes on their website, as there are many different factors that can affect the cost. 

Factors Affecting the Cost of Life Insurance

The cost of your life insurance policy will differ from person to person due to the following factors, most of which are out of your control:

Age

This is the most important factor affecting how expensive your life insurance premium is. Older people will almost always pay more for their life insurance than younger people, as they have a lower life expectancy, thus being more likely to pass away during their term. 

Gender

You might not think that gender has a part to play in the cost of life insurance, but men have a shorter life expectancy than women. Correspondingly, men’s life insurance premiums are a little higher. 

Health Status

If you have pre-existing medical conditions, are in poor health, or are at risk of poor health, your life insurance premiums will be higher than those who are perfectly healthy. 

If you are young, you will likely only be required to fill out a questionnaire. Older people applying for life insurance may require a medical evaluation. 

Smoking Status 

If you smoke, your life insurance premiums will skyrocket, often almost doubling in price. This is a very important health risk factor to life insurance companies that you won’t be able to escape. 

Occupation

If you are in a high-risk occupation or partake in more dangerous hobbies, such as firefighters, manual labourers, and drivers, your life insurance premium could be higher than someone like an office worker. 

How Much is Life Insurance in Canada for Seniors? 

Life insurance policies for seniors will almost always be higher than premiums for younger people due to their higher risk of death. 

Canadian seniors may pay a few hundred dollars a year for basic coverage, and that number can get up to over $1,000 for more comprehensive plans. 

Keep in mind that not every life insurance company will offer coverage for seniors. If they do, you will likely need a medical assessment from your doctor. 

Also, most life insurance companies will not provide term life insurance policies for seniors over 75. 

How Much Life Insurance Do I Need in Canada? 

The Financial Consumer Agency of Canada recommends you purchase life insurance coverage worth 7 to 10 times your annual salary to protect your beneficiaries. 

However, the amount of life insurance you should get will depend on you, your family, your savings, and more. You can use this calculator to estimate how much life insurance you need. 

For free life insurance quotes online, check out PolicyMe.

FAQs

Related: Pros and Cons of Employer-Provided Life Insurance