What is the Best Life Insurance in Ontario for 2023?
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Did you know that deaths by car accidents in Ontario are currently at a ten-year high? While you can plan for many things in life, you can look after your health, and make sure you exercise, there are factors that you can’t control
Life insurance offers peace of mind that should the worst happen your loved ones who depend on will not be left struggling financially.
In this guide, we will break down the essentials of life insurance in Ontario, how to get it, how much you should be paying and why it is important.
What are the top life insurance providers in Ontario?
While most life insurance providers sell their policies nationally, Toronto’s role as Canada’s largest financial hub means that many of the providers are headquartered in Ontario.
Let’s take a look at some of our favourite life insurance providers for Ontarians.
Canada Life life insurance: Comprehensive options from one of the country’s largest insurers
Founded in 1847, The Canada Life Assurance Company was Canada’s first domestic life insurance company. In 2013, the company merged with Great-West Life insurance and London Life insurance. As one of the largest insurance companies in Canada, it collects over $36 billion in insurance premiums each year and employs over ten thousand people.
| Types | Term Life Insurance | Whole Life Insurance | Universal Life Insurance | Participating Life Insurance |
|---|---|---|---|---|
| Term | From 5 to 50 years | Unlimited | Unlimited | Unlimited |
| Guaranteed burial insurance | ||||
| Debt repayment | ||||
| Inheritance transfer for beneficiaries | ||||
| Value growth in your life insurance | ||||
| Increases your savings (non-taxable) | ||||
| Participation in investment results (in the form of dividends) |
Sun Life life insurance: A great option for families
Sun Life has been providing insurance since 1871. Originally headquartered in Quebec, the group now provides insurance over the whole American continent as well as in India, the Philippines, the UK and North Africa.
Sun Life offers term, permanent and whole life insurance. Let's take a look at what Sun Life offers for its term life customers.
| Types | Term Life |
|---|---|
| Term | 10, 15, 20, 30 years |
| Age |
|
| Price | Between $26 and $107 per month depending on age, term, and the amount of coverage |
| Coverage Amount | $50,000 and up |
Sun Life has a range of policies to suit every individual need. Take a look at the table below to see what other types of life insurance they offer.
| Policy | Features |
|---|---|
| Participatory permanent life insurance |
|
| Non-participatory permanent life insurance |
|
| Universal life insurance |
|
Manulife – Manulife life insurance: Synergy plans combine life insurance with disability and critical illness coverage
With over 33 million customers Manulife is one of the most popular insurance companies in Canada. They recently announced a net zero carbon policy and work to keep investments green.
Manulife offers term, whole and universal life policies. Under each type, they have a number of plans. Here is a table showing the difference in each life insurance option available:
| Type | Term Life | Whole Life | Universal Life | Gauranteed Issue |
|---|---|---|---|---|
| Term | 10-year increments | Lifetime | Lifetime | Lifetime |
| Coverage plans |
|
|
|
|
iA life insurance: the best life insurance for those who enjoy flexibility
The iA Financial Group is one of Canada's largest life insurance companies. The company began operations in 1892 and is segmented into various divisions today. The company has many loyal customers. It has earned an A+ from A.M. Best for its financial strength.
iA has a couple of different term life insurance options
| Policy type | Access Life | Pick-A-Term |
|---|---|---|
| No medical exam | - | |
| Fixed premium | ||
| Guaranteed renewal | ||
| Option to convert to permanent life insurance | Before 71 years | Up to 71 years |
| Coverage period | 15, 20 or 25 years | 10 to 40 years |
| Face value | Up to $500,000 | Up to $10,000,000 |
| Tax-free benefits |
and permanent life insurance options
| Policy type | Whole Life | Child life and health duo | Life & Serenity 65 |
|---|---|---|---|
| Quick payments | - | ||
| Fixed and guaranteed premiums | |||
| Guaranteed face value | |||
| Surrender value | |||
| Face amount | Up to $10,000,000 | Up to $500,000 | Up to $1000,000 |
| Tax-free death benefit |
Do you need life insurance in Ontario?
Buying life insurance is not required in Ontario. There are, however, many great reasons to get a plan. Life insurance is a powerful tool that guarantees your ability to provide financially for your loved ones if you pass away unexpectedly. It can also be an effective way to leave an inheritance for children or grandchildren. Let's look at a few examples.
Example 1: life insurance for peace of mind
For example
Abigal, 41, is a university professor living in Ottawa with her partner and their three small children. She is the family’s primary breadwinner, so she wants to ensure that her loved ones would be okay without her. She decides to buy 20-year term life insurance that will cover the family until their children are all grown.
Example 2: life insurance for funeral expenses
Expert advice
Khenan, 67, is buying a $25,000 guaranteed life insurance policy in Mississauga. He will be retiring at the end of the year. Though he’s in good health now, he wants to get ahead on estate planning. He doesn’t want his two children to have to plan, or pay for, his funeral. The no-medical guaranteed policy will be more than enough to cover that and his estate fees without the family having to sell the family home.
Example 3: life insurance for peace of mind
Good to know
Erin, 34, is buying life insurance in Hamilton. She is a single mother of one. Her daughter, Alice, is 15 years old. Erin has recently bought a house and taken out a mortgage. Her chief motivation in buying life insurance is so that Alice could pay off the mortgage and own their home if anything was to happen to Erin.
Ready to purchase life insurance in Ontario?
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Who should buy life insurance in Ontario?
Anyone concerned about their dependents would be wise to purchase life insurance in Ontario. the money paid out by a life insurance policy is known as the "death benefit". The "death benefit" is not taxable and is not considered part of your estate. The right policies ensure that an estate can be settled or that a tax-free benefit can go to the next generation.
Besides financial support and funeral costs, there are other great reasons to have life insurance. Here are a few:
- Pay off a mortgage
- Clear out existing debts
- Leave money for your favourite charity
- Estate planning
- Peace of mind that dependants will be financially secure
How much life insurance do you need in Ontario?
Ontario’s Greater Toronto Area is one of the most expensive places to live in all of Canada, so buyers may be interested in large policies. If you have dependents, it makes sense to carry at least enough to pay off your mortgage and leave money behind. With average GTA home prices over $1 million, you can do the math.
Expert advice
!A nice rule of thumb is to purchase a policy worth ten times your annual income. Ask yourself if your dependents could stay in the family home, establish themselves as independent adults and maintain their lifestyle without you. Shopping for life insurance may be uncomfortable, but it can make a big difference for your family’s future.
Weigh your existing debt, dependants’ needs, mortgage payments and family’s lifestyle. Still unsure? Our life insurance calculator can help you with the calculations.
There are life insurance policies for everyone. Ontarians can pick from as little as $5,000 in coverage to as much as $10 million. Are you interested in seeing what coverage is right for you? Compare Ontario life insurance quotes.
Compare the best life insurance companies
How much is life insurance in Ontario?
Starting rates for term life insurance for young buyers start at under $20 per month. This scales quickly depending on the amount and type of insurance. An older buyer interested in permanent life insurance and a high death benefit may pay many hundreds. Life insurance in Ontario encompasses such a wide range of policy types and amounts that you need to get a personalized quote to know for sure.
To get you started, here are real-life quotes from a leading life insurance provider in Ontario. Prices are for 20-year term life insurance policies with $250,000 and $1 million benefits:
| Male, Non-smoker | Premium/ month ($250k) | Premium/ month ($1 million) |
|---|---|---|
| 30 years old | $22 | $58 |
| 45 years old | $51 | $163 |
| 60 years old | $253.00 | $926 |
Men's term life insurance quotes Ontario
| Female, Non-smoker | Premium/ month ($250k) | Premium/ month ($1 million) |
|---|---|---|
| 30 years old | $16 | $42 |
| 45 years old | $39 | $118 |
| 60 years old | $181 | $656 |
The above rates are given as examples. Not everyone will get the same rate based on their personal risk profile and health. Here at some of the life factors that might affect your rates:
- body type
- history of depression
- alcohol use
- tobacco use
- gender
- age
- lifestyle
The best way to answer this question? By comparing life insurance quotes made just for you.
Compare the best life insurance companies
What types of life insurance are available in Ontario?
Life insurance comes in two main types: term and permanent.
Term life insurance is only active for a set period of time, such as 5, 10, 20, or 25 years. It only pays out if the policyholder dies during the term of the policy. Permanent life insurance, on the other hand, is almost certain to pay out. This makes it more expensive and means stricter enrollment criteria. Permanent life insurance can be further divided into subcategories such as whole life insurance and universal life insurance, the latter includes an investment component. The type and amount of life insurance that is right for you will depend on your individual circumstances.
It is important to consider your specific needs and compare options to find the best policy for you.
| Type of life insurance | Term | Premium | Our verdict |
|---|---|---|---|
| Term life insurance | Limited term: usually between 10 and 30 | Cheaper premiums, especially if you are young and healthy. |
|
| Permanent life insurance | Covers you until the end of your life | Guaranteed payout means much higher premiums |
|
Term life insurance may be right for younger individuals without health problems. It’s inexpensive and gives reassurance that the policyholder’s dependents would be cared for financially in the event of their death. For older individuals who do not want to undergo additional medical exams, a guaranteed life insurance policy may be a good option. It can offer enough to cover funeral expenses and remaining debt.
Whole life insurance, on the other hand, can provide a guaranteed death benefit and serve as a financial resource in life, making it a good choice for those who want to leave a legacy for their dependents. For Ontario life insurance quotes and to find the right policy for your needs, start comparing providers now.
How do you get Ontario life insurance quotes?
For life insurance quotes in Ontario, you can use our comparison tool to compare options from top insurers in the province now.
Compare the best life insurance companies
You can also get quotes through life insurance brokers or by contacting financial advisors and insurance agents directly.
The amount of information and medical exams required to obtain a quote will depend on the type and amount of coverage you are seeking. Basic term policies with low coverage amounts may be available quickly online with minimal medical questions. Higher coverage amounts and permanent life insurance policies usually require comprehensive medical exams and questionnaires.
Good to know
Keep in mind that the life insurance policy you choose will have long-term financial implications for your family, so it is important to carefully consider your options before making a decision.
Ontario Life insurance buying tips:
To save money on life insurance in Ontario, here are some tips to consider:
- Buy young: life insurance premiums are lower for younger individuals who are in good health. By purchasing a policy in your twenties, you will be able to lock in lower rates than if you waited until your thirties or forties.
- Buy only as much as you need: consider your family's specific needs and financial situation when deciding how much life insurance coverage to purchase. In some cases, a term life insurance policy may be sufficient to provide for your loved ones.
- Ask for member discounts: as a member of a professional or alumni organization, you may be eligible for a discount on your life insurance policy. It is worth asking your insurer what discounts they offer.
- Bundle policies: it is more cost-effective to bundle life insurance coverage with disability or critical illness insurance than to buy multiple policies separately.
- Quit smoking: Smoking is a major risk factor for many health conditions. It drives up life insurance premiums. Not only can quitting reduce your risk of illness, it can also lower your life insurance rates!
- Compare providers: There are many life insurance providers and plans available in Ontario. Compare options and find the one that is right for you. A life insurance agent can help you understand the differences between the various options and choose the best policy for your needs.
Compare the best life insurance companies
Is life insurance taxable in Ontario?
When speaking about taxes, we always recommend speaking with a tax professional.
Ontario taxes life insurance premiums at 2%.
Death benefits paid to a named beneficiary are not taxable in Ontario. The CRA considers them an inheritance or gift. An exception to this rule is earned interest from some permanent life insurance policies. Beneficiaries could be eligible if they choose to receive money in installments rather than as a single lump sum.
If your policy earns interest, the life insurance company should send you or your beneficiaries a T5 Statement of Investment Income at tax time.
Good to know
Borrowing money from or closing your permanent life insurance policy may be taxable. While you should not owe taxes on the portion of the policy’s accumulated cash value made up of your premiums, the above-basis amount from earned interest is taxable.
Can I get no medical life insurance in Ontario?
Many Ontario life insurance providers offer guaranteed acceptance life insurance. These term life insurance policies are only available up to a specific age limit. For example, Sun Life Go Guaranteed Life Insurance accepts applicants between the ages of 30 and 74 while Manulife’s CoverMe Guaranteed Issue Life Insurance accepts those between 40 and 75.
The biggest downside to these policies is low coverage limits vs plans that require medical exams or questionnaires. Many plans are limited to $25,000. RBC Guaranteed Acceptance Life Insurance allows a little more, $40,000.
While no medical life insurance can make sense to the right kind of buyer they aren’t the most competitive or cost-effective plans. Going through the trouble of a medical questionnaire and exam may mean access to higher limit policies and more bang for your buck. .
What is the Financial Services Regulatory Authority of Ontario?
The Financial Services Regulatory Authority of Ontario, or FRSA, regulates the province’s life and health insurance industries. It exists to protect the public.
The FSRA sets standards for licensing and educating Ontario’s insurance agents, adjusters, salespeople and other insurance professionals.
In the event that an insurer has wronged you, the FSRA recommends that you first contact the insurer’s complaint officer. Following this step, and if you believe the company acted in violation of the Ontario Insurance Act, you may register a complaint with the FSRA. The organization may be able to take action against the insurer if it broke laws or it may refer you to a different organization that can help. Note that it is unable to change a company’s policies or seek compensation or a refund on your behalf.
Expert advice
How do I get mortgage life insurance in Ontario?
Mortgage life insurance is sometimes referred to as "life insurance for a mortgage". Is not required in Ontario but can be beneficial for some buyers.
Similar to term life insurance, mortgage life insurance policies last for a set term, typically the length of the policyholder's mortgage. In the event of the policyholder's death, the insurance pays off the remaining mortgage balance.
The beneficiary of the policy is the mortgage lender, not the policyholder's dependents, but the end result means a paid-off mortgage for the family home.
One advantage of mortgage life insurance is that it typically requires less medical information than other types of life insurance. For example, a person with a pre-existing health condition may find it easier to obtain mortgage life insurance than a traditional term or whole life policy.
Let’s look at an example of why someone might prefer this type of coverage:
For example
Javier is a 41-year-old architect in Toronto. He is married and has a young daughter. They live in a chic condo in the city's Yorkville neighbourhood. It cost them $1.8 million and required a substantial mortgage. As the family’s primary breadwinner, he wants to be sure that his daughter and partner can continue living in the home should something ever happen to him.
He chooses a mortgage life insurance policy because a recent cancer scare drove up the prices of his term life insurance quotes. He is more comfortable with the less expensive mortgage life insurance quote.
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