Life insurance broker Canada: 2024 guide

With a multitude of life insurance providers such as RBC Insurance, Canada Life, BMO Insurance, and Equitable Life of Canada, there is little wonder that people get confused when trying to find the best life insurance policy for them. 

This is where life insurance brokers in Canada come into play. Not only do they help you navigate the vast array of life insurance options, policies, coverage types, and add-ons, but also act as someone whom you can trust and rely upon for future support. 

So, let's look at everything on life insurance brokers and help you identify the questions you need to ask when choosing your own insurance broker or agent. You could also simply use our free comparator to compare the best life insurance plans and get free quotes in seconds right here.

What is a life insurance broker?

A life insurance broker is a professional person who acts as the intermediary between individuals wanting to buy life insurance and insurance companies. They do everything from helping clients understand insurance needs and policies, to finding the most suitable life insurance policy based on their specific circumstances. 

Not only do life insurance brokers have an in-depth knowledge of the insurance market and the various products offered by the different insurance providers, but they also assist individuals with the application process, completing paperwork, answering questions, and providing ongoing support. They essentially act as advocates for anyone looking for life insurance and help them navigate the ins and outs of the insurance world.

Alternatively, you could also use our HelloSafe comparator below to explore the best life insurance plans in Canada, for free, and get over 20 personalized quotes in seconds right here.

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What does a life insurance broker do?

Life insurance brokers in Canada play a vital role in helping people from all walks of life navigate the intricacies of life insurance. Not only do they have the expertise and knowledge necessary to guide people through the process of purchasing a policy, but they also provide their clients with a number of key services that simplify the process in its entirety. These include:

Expertise and knowledge

One of the key reasons to use a life insurance broker is due to their in-depth knowledge of both the insurance industry and life insurance products, themselves. They can explain complex insurance jargon in simple terms to ensure that you have a clear understanding of your options and help accurately assess your needs and find the most suitable policy for you. 

Access to multiple insurance companies

Working with a life insurance broker also gives you access to numerous insurance companies and life insurance policies from one source. Since life insurance brokers have relationships with multiple providers, they can provide you with a range of options, policy terms, and quotes all in one go like our HelloSafe comparator.

You can then easily compare and review coverage limits, costs, and policy plans without having to contact different insurance companies yourself. 

Specific recommendations

Since everyone’s personal circumstances are different, from your financial situation to age, future goals, and risk tolerance, no one life insurance product fits all. Life insurance brokers can help you review your unique lifestyle and help you make an informed decision on the best life insurance policy that would suit you.

By finding the right balance between coverage, cost, and future financial security, the right life insurance broker will ensure that you get the plan without overpaying.

Assist with underwriting

The majority of life insurance applications require underwriting. This is when insurance companies review your health and various lifestyle factors such as smoking habits and occupation. Life insurance brokers can guide you through this process and help you gather the necessary documents to ensure that your application is complete and accurate. With experience, they can also work with underwriters to advocate on your behalf if any complications arise. 

Ongoing support and service

Lastly, most life insurance brokers in Canada also provide ongoing support even after the policy purchase is completed. This is because they may have to help you make policy changes, such as updating beneficiaries, answering questions and concerns, or helping navigate the claims process if that need arises.

A good life insurance broker might also be able to help you with your other insurance needs, and could potentially combine various policies to help you save money over the long term. 

What is the difference between a term life and a whole life insurance broker?

A life insurance broker would normally be well-versed with both term life insurance and whole life insurance. Having a broker that is dedicated to only term life or only whole life insurance products is extremely rare as it would significantly hinder their business opportunities.

However, it is possible to find specific term life insurance brokers or whole life insurance brokers that may solely help clients with one product or another due to their specific expertise and preferences.

Similarly, lots of people who have done some of their own research into life insurance may also have a preference as to whether they want to opt for the cheaper, but fixed length, term life insurance, or use whole life insurance to get coverage for life. It can, however, be difficult for some to know who to choose.

Term life insurance broker

A term life insurance broker focuses on term life insurance products that provide coverage to individuals for specific periods of time. Whether it is 10, 20, or 30-year terms or longer such as To Age 65 or To Age 100 life insurance products, term life insurance does come to an end at some point.

They will make sure that their client gets the right life policy that can cover immediate expenses such as mortgages and personal loans should the worst happen, and potentially even focus on term life insurance that can be converted into permanent life solutions in the future. 

Furthermore, term life insurance brokers are likely to care more about your short-term needs and current financial situation in order to find you the most budget-friendly life insurance options.

This is because term life insurance policies are often chosen by younger individuals at the beginning of their careers and relationships, who are more focused on ensuring financial stability for their dependents in case they suddenly pass away, as opposed to leaving an inheritance. 

Whole life insurance broker

Conversely, whole life insurance brokers deal with permanent life insurance solutions that provide insurance coverage to individuals for their entire lives. The difference between term life policies and whole-life solutions is that in addition to the death benefit, they also accumulate a cash value.

While whole life insurance premiums are also significantly higher, the policies can be used as an estate planning tool in addition to providing loved ones with a payout in case the insured passes away early. 

Since permanent and whole-life policies can be quite complex, it is recommended to use a whole-life insurance broker to help explain all the features and benefits of the products. They will then also assist in determining the appropriate coverage amounts and help choose a policy that aligns with your long-term financial needs. 

What are the benefits of using a life insurance broker?

The major benefit of using a life insurance broker is the ability to receive, compare, and review multiple insurers and insurance options from one single source. Without the need to contact multiple insurers and speak to multiple salespeople, one good life insurance broker can give you everything you need in a single meeting.  

However, there are also several other advantages, and even a few disadvantages, of using a life insurance broker that you should know of since knowing all the pros and cons may sway you one way or the other when considering whether to use a life insurance broker or not.

Advantages of life insurance brokers

• Access to Multiple Insurance Companies: This allows life insurance brokers to actively quote, compare, and review multiple providers and products with ease. 
• Expertise and Personalized Recommendations: By understanding your financial situation and goals a good life insurance broker will be able to recommend to you the most suitable policy for your situation. 
• Assisting with Underwriting: Brokers can help with both the application and speak to underwriters during the application process if any complications arise. 
• Continued Support and Policy Management: Good life insurance brokers will also provide continued ongoing support, so you know where to turn if you have any questions or want to discuss other insurance needs. 

Disadvantages of life insurance brokers

• Cost: While all term life insurance and most permanent life insurance products don’t incur additional costs from life insurance brokers acting as intermediaries, it is possible that an additional cost will be added to your premiums on some universal life insurance products. 
• Limited Product Offerings: Although life insurance brokers may have access to multiple insurance providers and products, they may also be restricted. Since some insurance companies might not work with brokers, it is possible that you won’t receive quotes or plans from the best life insurance provider if they aren’t affiliated with your chosen broker. 
• Potential Bias: While it is illegal to not act in their client's best interests, it is possible that some life insurance brokers may have a slight bias towards certain insurance companies and policies; thereby, recommending a product that isn’t wholly suitable to you. 
• Lack of Direct Control: Not having direct control over one’s own application process or underwriting may not sit well with everyone. Since life insurance brokers usually handle all the administrative legwork, this process may not be suitable for you. 

If you'd like to autonomously explore and compare the best life insurance options in Canada, you can use our comparator below. It's free to use and you even get over 20 life insurance quotes tailormade for you in just a few moments.

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How to find life insurance brokers in Canada?

Whether you are looking for whole life insurance brokers in Vancouver or term life insurance brokers in Ottawa, there will be an insurance intermediary in your vicinity that can help you find your perfect policy.

However, since being a life insurance broker in Canada is a regulated activity, you should ensure that any intermediary you contact is correctly registered with the authorities in your province.

You can usually do this online through a Google search "life insurance broker near me" and using the online tools provided by the specific regulatory authority in your area. For example, life insurance brokers in Ontario are regulated by the Financial Services Regulatory Authority of Ontario (FSRAO) and they have an online tool called Licensing Link where you as a consumer can confirm the licensing status of your insurance intermediary. 

It must be noted that you must search more specifically to get the best options in your region/province. For example, for Ontario, search, "life insurance broker Ontario", and for Calgary "life insurance broker Calgary", or "life insurance broker Edmonton".

How to choose a life insurance broker?

Choosing a life insurance broker based on their expertise and knowledge is fundamental when trying to find the right intermediary between you and insurance providers. However, skill and industry knowledge isn’t the only thing on which you should judge your insurance professional.

Another incredibly important aspect that you should consider is how comfortable and at ease you are with the individual who is helping you. The life insurance broker you end up choosing may end up working with you for a long time.

So, not only should they be able to understand what you need and at what price, but they should also care about your thoughts, listen to what you have to say, and strive to build a long-term relationship with you and your family. 

If you’re unsure what to look for, here is a quick checklist to consider when choosing your life insurance broker.

• Do they come highly recommended?
• Are they personable?
• Do they have experience?
• Will they offer continued support after purchase?
• Can they offer life insurance policies from numerous insurance providers or are they limited to a few?

Should I use a life insurance broker in Canada?

You should use a life insurance broker in Canada if you are struggling to understand insurance jargon and navigate the numerous life insurance policies and plans available to you. A good insurance intermediary will be able to smooth the insurance buying process for you by showing you a number of different options that are specifically suited to your needs and budget.

Even if you do have some experience buying life insurance, you might still consider approaching a life insurance broker just to see what other options are available. Some insurance providers only offer their policies via third parties, so considering a broker may provide you with more options than anticipated. 

The only time you should not consider using a life insurance broker is if you feel that the professional you are working with cannot be trusted. They may either have mixed online reviews, limited insurance options, or come across as a little pushy. The most important thing is that you are comfortable with whatever life insurance broker you choose.

If you'd like to cut to the chase and look at policies to buy, then simply use our free comparator and get access to multiple life insurance plans, and their coverage, and get personalized quotes right here.