Best family life insurance in Canada in 2024

When you're young and living the single life, life insurance may not be a top priority in your financial planning. However, as you enter new phases with a partner and children, the need to protect your loved ones becomes crucial.

The decision-making process can be complex, with questions about single or joint policies, critical illness, and disability coverage. Thankfully, many companies offer "family life insurance" – a comprehensive solution to protect everyone in your family.

In this guide, we'll demystify how family life insurance works and explore the best providers in Canada. Then, you can use our free comparator to compare the best plans and get free personalized quotes for your family in seconds.

What is family life insurance?

Family life insurance is a comprehensive solution to affordably cover you and your loved ones. It consolidates essential policies, including life, critical illness, and disability insurance for yourself, your partner, and your children.

With a family life insurance package, you make a single monthly payment, simplifying the management of coverage and eliminating the need for separate policies with varying premiums. This ensures that your entire family is protected comprehensively under one convenient plan.

Pros of family life insurance

1. Comprehensive Protection: Family life insurance bundles life, critical illness, and disability coverage into one plan, offering holistic protection for all family members.
2. Convenience: Managing a single policy with a unified premium is simpler than dealing with multiple policies and varying payment schedules.
3. Cost Savings: Bundling policies can often result in cost savings compared to purchasing individual policies for each family member.
4. Flexibility: Family life insurance plans typically offer flexibility in coverage, allowing you to customize the policy to meet the specific needs of your family.
5. Streamlined Underwriting: Applying for and underwriting a single-family life insurance policy can be more streamlined than dealing with separate applications for each type of coverage.

Cons of family life insurance

1. Coverage Limits: Family life insurance may have limitations on coverage amounts for specific types of protection, potentially leading to insufficient coverage for certain family members.
2. Complexity: While consolidating policies simplifies management, the complexity of combining different types of coverage may be challenging to understand fully.
3. Not Always Cost-Effective: Depending on the individual needs of family members, bundling policies may not always be the most cost-effective solution, especially if some family members require different or additional coverage.
4. Limited Customization: The bundled nature of family life insurance might limit your ability to tailor coverage to the unique needs of each family member.
5. Changes in Family Structure: If there are changes in family structure, such as divorce or grown children leaving the household, the bundled policy may need adjustments.

It's crucial to carefully evaluate the specific offerings and limitations of family life insurance to determine if it aligns with your family's needs and preferences.

You can quickly use our comparator and see the different options available for family life insurance, compare coverage from various providers and get free quotes right here.

How does family life insurance work?

Family life insurance in Canada operates with varying terms and packaging options across life insurance companies, creating a flexible landscape. Although not standardized, the foundation typically involves a life insurance policy—either term or whole life—serving as the core protection for the family. Partners may be covered by a separate policy, often at a discounted rate or through a rider on the primary policy.

Children can also be included through additional riders. To enhance financial security, disability insurance and critical illness insurance are seamlessly integrated, either through riders or standalone policies.

In the unfortunate event of the policyholder's passing, the policy ensures a "death benefit," providing crucial financial support for daily expenses, education, or mortgage payments of the life insurance beneficiaries.

If partners and children are covered through riders, the insurer will guide the surviving partner to obtain a new policy and transfer the riders for the children, ensuring a continued safety net for the family.

How much is family life insurance?

Unlike standard policies like term life or critical illness, family life insurance plans lack an industry-wide definition. Instead, it’s a product designed by your provider to meet your specific needs, which means costs vary widely from broker to broker and family to family.

That said, insurers tend to focus on a few critical factors when calculating the cost of insuring you and your family:

Here's a rough estimate of monthly life insurance premiums for a family of four in Toronto based on coverage amounts:

To understand the cost of a family life insurance package tailored to your family and finances, contact a broker or licensed financial advisor to discuss the best options for your budget. Or you could simply use our comparator below to compare the best family life insurance plans and get free personalized quotes right here.

How much life insurance do I need for my family?

A comprehensive family life insurance package should include enough coverage to support your dependents, pay for your funeral, and address any outstanding liabilities, such as a mortgage. Depending on your stage of life and overall financial health, this may require adjusting the size of one policy in favour of another or purchasing riders to a primary policy.

Let's explore a couple of examples.

Given their children's ages and the size of their mortgage, Elodie and Marcus choose a $2 million 20-year term family life insurance policy.

Peter and Marie pick a whole family life insurance policy for $500,000. Because they are comfortable financially, have a paid-off mortgage, and Marie's children are grown, a more modest plan matches their needs.

How long of a family life insurance policy do we need?

Ideally, your family life insurance policy will remain in force for as long as your loved ones would normally rely on you for financial support. If you anticipate that one or more members of your family may require long-term assistance once you’re gone, you may want to consider purchasing coverage for your family in connection with a whole life insurance policy, rather than term life insurance.

• Francis and his partner Helen are in their 40s and have two children in elementary school. They also have several years of mortgage payments outstanding. Francis has decided to invest in family life insurance to safeguard his family’s future.

• Robert and his partner Thomas are also in their 40s. They own their own home and enjoy visiting their adult children, all of whom are self-sufficient. Thomas would like to purchase term life insurance to protect Robert’s standard of living should he pass unexpectedly.

Despite that all of the adults are roughly the same age, Francis will need to purchase a long-term life insurance policy than Thomas. Because they have young children who will require support for at least another decade, as well as a mortgage, Francis and Helen need more comprehensive coverage. 

What are the best family life insurance Canada plans?

Several Canadian insurers offer life insurance plans for families, including several of the most highly rated like Manulife Insurance, Sun Life, and more. Let's look at some of the top options.

You can use our comparator to compare the above plans and more. Enter a few quick inputs on what you need and viola, get free quotes in no time.

Is family life insurance worth It?

If you are the parent of young children, a life insurance policy is an essential purchase to safeguard their well-being in the event of your passing. Even if you’re not yet a parent, however, family life insurance can make good financial sense. By bundling your policy together with that of your partner, you may be able to reduce your overall insurance costs per month.

For those who are young and in good health, life insurance may feel like an unnecessary financial burden. The peace of mind that comes from knowing that your loved ones won’t face hardship in the event of your passing, however, makes the investment worthwhile for many.

What are the tips to Save on family life insurance?

If the prospect of purchasing family life insurance feels daunting - or expensive! - remember that there are steps you can take now to reduce your monthly premiums.

• Compare net costs. Sometimes, the policy that seems most attractive right now will cost more over time due to gradual increases in premiums. When deciding what to buy, compare the net cost index for individual policies.
• Look for premium discounts. Many insurers offer discounts on premiums when you purchase a larger policy. It may cost less to buy $400,000 than $300,000 of life insurance.
• Take care of your health. If your current lifestyle might lead to higher premiums, changing your habits now can save you money. If, for example, you smoke, now might be the time to stop.
• Shop around. Even if the process feels overwhelming, resist purchasing the first policy you find. Shop around and compare.

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Alexandre Desoutter

Alexandre Desoutter has been working as editor-in-chief and head of press relations at HelloSafe since June 2020. A graduate of Sciences Po Grenoble, he worked as a journalist for several years in French media, and continues to collaborate as a as a contributor to several publications.