Best Life Insurance in Canada For 2023

Best life insurance plans in Canada at a glance

Company	Key Features	Get A Quote
	Oldest and one of the largest insurers in Canada (founded 1865) Diverse portfolio: life, health, dental, disability, critical illness All policy types offered: term, whole, universal, participating life Up to $25 million coverage Multiple term lengths from 10-30 years Option for 90-day free coverage when applying	Get a Sun Life Quote
	Largest by revenue, over 20 million customers globally Innovative digital insurance delivery and underwriting Offers cash advance if diagnosed terminally ill All policy types, up to $20 million coverage Vitality program rewards healthy habits Rated A+ by AM Best	Get a Manulife Quote
	Merged entity of 3 top insurers (Great-West Life, London Life, Canada Life) Very flexible 5-50 year terms available Option to renew term or convert to permanent coverage Rated A+ by AM Best	Get a Canada Life Quote
	Backed by Canada's largest bank No medical exam option up to $1 million Guaranteed acceptance permanent coverage Up to $25 million term life coverage Pick-a-term lets you select custom length Rated A by AM Best	Get an RBC Quote
	Leading cooperative financial group Good for existing members; bundled policies Permanent coverage without health exam Term, permanent, participating options Monthly premium discounts possible	Consult Desjardin's Website
	Bank-owned, straight term life policies $100k to $5 million coverage amounts Age 0-80 permanent life available Compassionate critical illness benefit Rated A by AM Best	Get a BMO Quote
	Unique pick-a-term 10-40 years Decreasing term good for mortgages Non-medical options through Access Life Term, whole, and universal policies Rated A+ by AM Best	Got an iA Quote
	Canadian-owned, top 10 life insurer Packaged policies can save on fees Many term lengths and options Convert to permanent coverage anytime Rated A by AM Best	Get a Empire Life Quote
	Independent mutual company Competitive pricing on term life Gives back through community benefits Multiple terms and conversion options Rated A by AM Best	Get a Foresters Quote
	Part of Canadian Mutual Insurance Very affordable premiums Wide range of term lengths Renewable and convertible policies No fees charged on policies	Consult Wawanesa's Website
	Term, whole life, and universal policies offered Ability to convert term policies to permanent plans Customize coverage with critical illness rider Flexible investment options on some policies Self-directed investment options	Get an Equitable Life of Canada Quote
	Multiple term durations available Universal life policies with cash value Critical illness rider available Established Canadian insurer, 80+ years Term, permanent, and rider options Can layer coverage for comprehensive protection	Get an Ivari Quote
	Guaranteed renewable terms offered Whole life option with lifetime coverage Critical illness rider available Major Canadian bank-owned insurer Term, permanent, and illness options Trusted bank brand name	Consult TD's Insurance Quote

What is life insurance?

Life insurance is a vital support for your family in case of your passing. By paying regular premiums, you secure coverage. If you pass away during the policy's term, chosen beneficiaries receive a payout, easing financial burdens such as mortgages and funeral expenses. It's a key element in estate planning, assuring your family's financial security and peace of mind.

When should you get a life insurance policy?

Deciding when to purchase a life insurance policy is your choice, but acting sooner is usually beneficial. It's wise to explore options now. Getting coverage while young and healthy is more cost-effective. Delaying until you're unwell might limit options or result in higher premiums with fewer advantages. Your situation shapes when to get insurance. It might not be essential for those without dependents, but securing life insurance is sensible if you support a family.

What does life insurance cover?

What is covered

When you may lose coverage

Death benefit payout provides a tax-free lump sum to beneficiaries for various purposes like covering debts and ensuring financial stability. Debt settlement to assist in clearing outstanding financial obligations, preventing their transfer to surviving family members. Income replacement to help substitute lost income for dependents, is especially crucial for families relying on the policyholder's income. Funeral costs, easing financial burdens during difficult times. Liquidity for smooth asset distribution and potentially reduces heirs' tax burden.

Suicide during the contestability period may limit claims. Providing false information or engaging in fraud during policy application, such as concealing health conditions, can lead to claim denial. Deaths occurring during criminal acts are typically not covered. Engaging in high-risk activities like extreme sports (e.g., skydiving or heli-skiing) might result in exclusions. Some policies may exclude coverage for deaths in specific high-risk regions. Failing to pay premiums may lead to a policy lapse and loss of coverage.

How to choose the best life insurance company in Canada?

1. Assess your financial situation

Before determining the type and amount of life insurance you need, evaluate your financial health. Consider existing financial support mechanisms for your dependents, like emergency funds, retirement savings, and any life insurance from your workplace. Consulting a financial planner can help identify specific needs, such as mortgage payments, supporting children, maintaining a business, or leaving a legacy.

2. Know your coverage needs

People often underestimate the amount of life insurance they need. While focusing on paying off major debts like mortgages is common, it's crucial to consider the broader financial needs of your family. Using a life insurance calculator is a great starting point. Collaborating with a financial planner can help determine a more accurate coverage amount based on your circumstances and goals.

3. Choose the right policy type

Understand the difference between term and permanent (or whole) life insurance. Term life offers coverage for a set period, while permanent life insurance provides lifelong coverage at a higher cost. Deciding on the type of policy depends on your specific needs and financial objectives.

4. Understand factors affecting rates

Life insurance rates are influenced by a variety of factors:

• Death Benefit Amount: Higher coverage results in higher premiums.
• Type of Life Insurance Policy: Term policies are generally cheaper than whole-life policies. Longer terms are generally more expensive, whereas shorter terms are usually more cost-effective.
• Age: Older individuals typically pay more as they have a shorter life expectancy.
• Gender: Females, with a longer life expectancy, may pay less.
• Health: Good health usually leads to lower premiums; certain conditions may increase costs.
• Tobacco Use: Smoking often results in higher life insurance costs.
• Family History: A family history of health issues may raise premiums.
• Lifestyle & Occupation: Risky activities or jobs may increase the cost of life insurance.

Term length significantly affects cost, with longer terms generally associated with higher costs. Younger individuals tend to get lower rates due to being perceived as healthier and less risky to insure. Term life policies often offer the option to convert to permanent insurance later, allowing you to secure a lower rate initially.

5. Compare insurance companies for the best rates

Take advantage of free online quotes offered by various insurers to compare rates. Rates can differ significantly between companies. Working with an independent insurance agent who deals with multiple insurers can also assist in finding the most suitable coverage at a competitive price.

How much does life insurance in Canada cost on Average?

Monthly premiums can range from as low as $12 to several hundred dollars. These figures represent estimated costs for $100,000 of term life insurance coverage for a young, non-smoking male. Remember that these are ballpark estimates, and your actual expenses will be tailored to your unique health and circumstances.

It's worth noting that a 20-year term policy typically comes with slightly higher premiums since the rates remain fixed for a longer duration, leading to increased risk for the insurance provider.

Age	10-year term / annual cost	20-year term / annual cost
30	$150	$170
40	$185	$250
50	$230	$545
60	$770	$1480
70	$2,060	$2,560

As we can see from these figures, the older you are when you purchase a term life insurance policy, the more you will have to pay. Further, women will tend to pay 10-20% less than men for life insurance, whereas smokers will pay up to 100% more than non-smokers in premiums.

1. Death Benefit Payout

Life insurance primarily offers a tax-free lump sum, known as the death benefit, to the policyholder's beneficiaries upon their passing. This benefit can be used for various purposes, such as:

2. Debt Settlement

In the event of your passing, a policy can assist in settling outstanding debts and financial obligations, ensuring that these responsibilities aren't passed on to surviving family members. This may include:

3. Income Replacement

Life insurance replaces lost income for the policyholder's dependents, ensuring financial security for their future. This is particularly crucial for families reliant on the policyholder's income.

4. Funeral and End-of-Life Expenses

Typically, a life insurance policy will cover funeral costs and other end-of-life expenses, easing the financial burden on the family during a difficult time.

5. Estate Planning

A valuable tool for estate planning, life insurance provides liquidity to the estate. This facilitates smooth asset distribution and potentially reduces the tax burden on any heirs or beneficiaries.

What does life insurance not cover?

When considering life insurance, it's essential to recognize potential exclusions outlined in your policy. Most life insurance policies include a contestability period lasting 1 to 3 years after the policy issuance. During this time, insurers may closely examine claims and deny them if they do not meet the prerequisites.

Scenarios where coverage may be lost:

• Suicide During Contestability Period: If the policyholder passes away by suicide during this period, the claim may be limited or outright denied.
• False Information or Fraud: Providing inaccurate information or engaging in fraudulent activities during the policy application, like concealing health conditions, can lead to claim denial.
• Death During Criminal Activity: Deaths occurring during criminal acts are typically not covered.
• Participation in Extreme Sports: Engaging in high-risk activities such as skydiving or heli-skiing might result in exclusions.
• High-Risk Locations: Some policies may exclude deaths in specific high-risk regions.
• Premium Non-Payment: Failing to pay premiums can lead to a policy lapse and a loss of coverage.

Does life insurance cover natural death?

Yes, life insurance almost always covers natural death and accidents. In the event of illness, heart attack, stroke, old age, or similar events, your estate or beneficiaries will receive the death benefit. Generally, motor vehicle accidents, drownings, and similar events will qualify too.

Deaths that would not be eligible for life insurance payouts are murder by the beneficiary or deaths stemming from risky activities (auto racing, rock climbing, scuba diving, hang gliding, etc). In the event of suicide, it is unlikely to qualify if it occurs during the contestability period shortly after you purchase the policy.

What are the different types of life insurance plans in Canada?

Insurance Type	Description
Term Life Insurance	Flexible and affordable coverage that pays a lump sum to beneficiaries if the insured passes away within a specified period.
Direct Term Life Insurance	Term insurance purchased directly from an insurance company, available online or by phone.
Permanent Life Insurance	Ensures a payout to beneficiaries after the insured's passing, offering various coverage options.
Whole Life Insurance	Provides lifelong coverage, pays out regardless of when the insured dies, and may offer cash value.
Universal Life Insurance	Combines life insurance with an investment account, offering cash value with potential withdrawals.
Term to 100 Life Insurance	Offers coverage until age 100 or death, with premiums locked at the time of purchase.
Dependent Life Insurance	Policy benefiting the spouse and dependent children of an employee, providing additional coverage.
Endowment Life Insurance	Combines life coverage with a savings element, often marketed for educational funding.
Mortgage Life Insurance	Settles the remaining mortgage balance if the policyholder passes away, ensuring the paid-off home for the family.

Life insurance comes in many types, catering to nearly everyone's unique needs. Want to protect your dependents until they are adults? Term life insurance may be the right choice. Are you looking for a long-term investment strategy? Then a permanent life insurance policy like Whole Life or Universal Life is better. There are plans for everyone, from senior life insurance plans to family policies. You can even purchase children's life insurance.

1. Term Life Insurance

This insurance type offers a flexible and relatively affordable solution, paying a lump sum to beneficiaries if the insured passes away within a specified period. The duration of the policy, known as the term, can vary, often lasting 10, 20, or 30 years or until a certain age, such as 65 years old. The payout, referred to as the death benefit, supports the insured's family, covering immediate needs like funeral expenses or long-term necessities.

2. Direct Term Life Insurance

Also known as "direct-to-consumer" term life insurance, this option involves purchasing term insurance directly from an insurance company or agency, typically available online or via phone. It offers convenience and speed in the purchasing process.

3. Permanent Life Insurance

Unlike term insurance, permanent life insurance ensures a payout to beneficiaries after the insured's passing. It guarantees coverage for the insured's entire life, offering various options suited to individual preferences and requirements. Despite typically being more expensive than term life insurance, these policies provide long-term financial security for survivors.

4. Whole Life Insurance

This policy offers lifelong coverage, irrespective of when the insured passes away, ensuring a payout to beneficiaries. It distinguishes itself from term life insurance, which has a set term limit and often comes with an element of cash value that can be used for loans or withdrawals, making it an asset that grows over time.

5. Universal Life Insurance

Combining life insurance with an investment component, universal life insurance offers cash value and the potential for withdrawals or loans. Its value depends on how the investments perform, making it a flexible choice for individuals who wish to have more control over their investment options.

6. Term to 100 Life Insurance

While the name might suggest term insurance, it's actually a type of permanent life insurance. Premiums are fixed at purchase, ensuring coverage until death or 100 years old. However, this plan does not accumulate cash value like other permanent plans.

7. Dependent Life Insurance

This type of policy benefits an employee's spouse and dependent children and is offered by some employers. While the payouts might be lower compared to separate life insurance plans, it serves as an additional coverage option for dependents.

8. Endowment Life Insurance

Endowment life insurance combines a term life policy with a savings and investment element. Premiums contribute to an endowment that pays out upon policy maturity or in case of the policyholder's death. While it's marketed for funding a child's education, it has pros such as low-risk investment and no medical exam requirement. Still, the trade-off is low returns and potentially being less favourable than separate policies.

Alternatively, you should explore student loans and consider investing in a Registered Education Savings Plan (RESP) before committing to an endowment life insurance policy, which may offer more suitable and flexible options for educational funding.

9. Mortgage Life Insurance

Covers the outstanding mortgage balance if the policyholder passes away during the mortgage term, ensuring the home is paid off for the family. Unlike traditional life insurance policies that provide cash to beneficiaries, the mortgage life insurance payout directly settles the mortgage with the lender as the beneficiary.

This insurance is simpler to obtain and may have lower premiums as it typically doesn't require a medical exam, making it an accessible choice, especially for those with pre-existing conditions.

It's important to understand in Canada that while this insurance is available for new home buyers, it's not obligatory. Other life insurance plans, such as term or permanent life policies, can provide better coverage, ensuring comprehensive protection for your family, not just the lender.

How to get life insurance quotes in Canada?

To access life insurance quotes in Canada, research reputable insurance providers or consult a licensed insurance broker. You can request quotes via their websites by supplying crucial details like your age, gender, desired coverage amount, and preferred term length.

Alternatively, connect directly with the insurance company or your selected broker to discuss your requirements. They will lead you through the process, asking pertinent questions to generate accurate quotes tailored to your situation.

By comparing various quotes, you empower yourself to make an informed decision based on your financial plan and coverage preferences. Once content with your choice, proceed with the application to secure the life insurance policy that best fits your needs.

How much life insurance do I need in Canada?

A common rule of thumb to estimate life insurance coverage is multiplying your annual income by ten:

Annual income × 10 = required life insurance coverage

This formula serves as a starting point. The actual coverage required is influenced by various individual factors. For instance, a single parent with dependent children and a mortgage may need more coverage than someone with a financially independent partner, no mortgage, and no dependents. To determine if life insurance suits you, consider these questions:

• Who relies on your financial support? This includes children, a spouse, parents, or siblings.
• Are you a single parent? You may need more coverage if you are responsible for your children's education costs.
• Do you have outstanding debts? Consider if you have debts that you wouldn't want to burden your family with.
• Is your mortgage balance high? If your mortgage is high, consider if your family can keep the house without your income and support.
• Do you want to make charitable contributions? If you are interested in leaving a contribution to an organization or religious group, you will need more coverage.
• Do you have savings and investments? Assess your current financial position regarding savings and investments, if you have more, you may need less coverage.

Example of a Canada life insurance cost

Vince, at the age of 30, decided to purchase a 20-year term life policy in Alberta. This policy ensures coverage until he reaches the age of 50, and his annual premium is approximately $150.

On the other hand, Garth, also residing in Alberta, didn't get life insurance during his 30s, and fortunately, he remained healthy during that time. When Garth turns 40, he decides to buy a 10-year term life insurance policy. Now, both Vince and Garth are insured from 40 to 50.

Here's the key difference:

1. Vince bought his policy at age 30, and therefore his premium is set at $150 per year for the entire twenty-year term, resulting in a total cost of $150 x 20 = $3,000 for the coverage.
2. Garth, on the other hand, delayed buying insurance until he was 40. Consequently, his premium for the 10-year term is slightly higher, around $185 per year. Therefore, Garth will pay $185 x 10 = $1,850 for the same coverage and policy, even though he and Vince have identical lifestyles and are insured during the same age range.

What are the best Canada life insurance plans in 2023?

Did you know that over 150 life insurance providers are currently operating in Canada? With so many options, making a decision can be overwhelming. We have created our picks of top life insurance companies to help you filter out the noise.

We suggest comparing these insurance plans before making your final decision. You can use our comparison tool located below or at the top of the page to compare multiple policies and acquire free life insurance quotes within seconds.

Company	Key Features	Best For
	Diverse portfolio: life, health, dental, disability, critical illness All policy types offered: term, whole, universal, participating life Up to $25 million coverage Multiple term lengths from 10-30 years Option for 90-day free coverage when applying Strong financial strength rating (A+ from AM Best)	Best for comprehensive coverage and diverse policy options. Ideal for those seeking a well-established and varied insurance portfolio.
	Innovative digital insurance delivery and underwriting Offers cash advance if diagnosed terminally ill All policy types, up to $20 million coverage Vitality program rewards healthy habits Rated A+ by AM Best	Best for tech-savvy individuals looking for innovative insurance solutions and wellness benefits. Ideal for those wanting flexibility and rewards for healthy living.
	Very flexible 5-50 year terms available Option to renew term or convert to permanent coverage Rated A+ by AM Best	Best for flexible terms and conversion options, suitable for individuals seeking a merger of strong, reputable insurers.
	No medical exam option up to $1 million Guaranteed acceptance permanent coverage Up to $25 million term life coverage Pick-a-term lets you select a custom length Rated A by AM Best	Best for those preferring simplified and easily accessible insurance options, especially customers of the largest Canadian bank.
	Good for existing members; bundled policies Permanent coverage without a health exam Term, permanent, participating options Monthly premium discounts possible	Best for existing members looking for discounts and benefits within a cooperative financial group. Ideal for those interested in bundled policy options.
	$100k to $5 million coverage amounts Age 0-80 permanent life available **Compassionate critical illness benefit Rated A by AM Best	Best for individuals preferring straightforward, term-based and critical illness-focused policies. Ideal for a broad age range seeking simple coverage.
	Decreasing term good for mortgages Non-medical options through Access Life Term, whole, and universal policies Rated A+ by AM Best	Best for individuals looking for specialized term options, especially mortgage holders. **Ideal for those seeking non-medical policy application.
	Packaged policies can save on fees Lots of term lengths and options Convert to permanent coverage anytime Rated A by AM Best	Best for cost-conscious consumers seeking savings on fees through bundled policies and flexible conversion options.
	Competitive pricing on term life Gives back through community benefits Multiple terms and conversion options Rated A by AM Best	Best for individuals interested in competitive pricing, community benefits, and varied policy options offered by a mutual company.
	Very affordable premiums Wide range of term lengths Renewable and convertible policies No fees charged on policies	Best for budget-focused individuals seeking affordability and flexibility in renewable and convertible policies. Ideal for those who prefer fee-free policies.
	Ability to convert term policies to permanent plans Customize coverage with critical illness rider Flexible investment options on some policies Self-directed investment options	Best for individuals looking for policy customization and investment flexibility. Ideal for those wanting varied policy types and investment choices.
	Universal life policies with cash value Critical illness rider available Established Canadian insurer, 80+ years Term, permanent, and rider options Can layer coverage for comprehensive protection	Best for individuals seeking comprehensive coverage and multiple term options from an established insurer with a strong history. Ideal for those interested in layering coverage for holistic protection.
	Whole life option with lifetime coverage Critical illness rider available Major Canadian bank-owned insurer Term, permanent, and illness options Trusted bank brand name	Best for customers seeking trusted coverage options with guaranteed renewability and a lifetime whole life option. Ideal for those looking for insurance offered by a reputable bank.

Final Thoughts

Life insurance is a critical financial tool offering families peace of mind and security. The diverse array of insurance providers and their unique offerings cater to a broad spectrum of needs and preferences.

The Canadian market offers a rich tapestry of options, from term to permanent life policies with varying coverage amounts, from established, traditional companies to innovative digital-focused entities. Understanding the nuances of when to acquire life insurance, the factors affecting premiums, and the coverage inclusions and exclusions is paramount.

Choosing the right life insurance policy demands a personalized approach, considering one's financial situation, coverage needs, and desired policy type. The timing of purchase significantly impacts the cost, underlining the advantage of early acquisition.

Ultimately, whether it's for debt settlement, income replacement, or providing for loved ones, life insurance in Canada safeguards against financial hardships, ensuring a legacy and protection for the ones we care about. With careful consideration and evaluation, individuals can find the best-suited life insurance policy to meet their specific needs and secure a stable financial future for their beneficiaries.

FAQs About Life Insurance

What is the best life insurance in Canada?

Manulife, Sun Life, Canada Life, Desjardins, and iA (Industrial Alliance) stand out as Canada's top life insurance providers if we consider the volume of insurance premiums they receive. Determining the "best" life insurance depends on your specific needs, financial situation, and policies offered by various insurance companies.

Which life insurance policy is the best?

The ideal life insurance policy depends on your individual circumstances, including your financial obligations, family situation, and long-term needs. Compare policies based on coverage, cost, company reputation, and flexibility.

What's the best age to get life insurance?

Generally, the earlier you purchase life insurance, the lower the premiums. However, the "best" age may vary based on your financial responsibilities and future plans.

How to choose the best life insurance?

Determine your coverage needs, compare policies from different companies, review their reputations, consider policy flexibility, and read reviews from reliable sources to make an informed decision.

How long does a beneficiary have to claim a life insurance policy?

Typically, if the policy was active and in good standing when the policyholder passed, the filing deadline can vary from 90 days to 12 months, as per the Canadian Life and Health Insurance Association.

Is life insurance taxable in Canada?

Life insurance beneficiaries receive a tax-free, one-time payment in Canada. Neither term nor whole life insurance requires declaration on tax returns. Naming and updating beneficiaries is crucial to avoid complexities. Without named beneficiaries, the benefit may go to the estate, possibly facing taxes and debts before distribution. Access our detailed life insurance tax guide for more information.

What is Return of Premium Insurance (ROP)?

A life insurance policy that refunds all premiums paid if the policyholder outlives the specified term. For instance, if someone purchases an ROP policy that covers them until a certain age, such as 80, they receive a full premium refund upon reaching that age. It's important to note that ROPs are less common in Canada.

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