Best Whole Life Insurance in Canada 2024 (Updated)
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- Possibility to modify the contract at any time
- Tax-sheltered savings option that grows
- Guarantees for children included
Permanent Life Insurance by Beneva offers lifetime coverage with flexible payments. Clients may decide to surrender all or part of your policy to provide a cash flow, for example, as additional retirement income. Also, premiums are fixed.
- Lifetime protection at a guaranteed rate
- Guaranteed surrender values and guaranteed paid-up values
- Suitable for all age groups
Solution 100 by Empire Life offers lifetime coverage and protection up to age 100. Premiums end at age 100 with coverage lasting your entire lifetime, and rates will never increase, no matter your age or health status. Solution 100 offers the option to change to reduced paid-up value and stop paying premiums or access cash values through surrender or a policy loan.
- Guaranteed Level premiums
- Guaranteed cash surrender values
- Guaranteed Paid-up values
- No online quote available
- Benefit in case of disability and tax-free
- Lifetime protection and tax-advantaged investments
- Option to guarantee a child's or grandchild's insurability
RBC Whole Life Insurance by RBC offers lifetime coverage, cash value guarantees, a potential for dividends, and the chance to plan your estate. It is one of the more cost-effective policy options in the long term. By creating policy dividends, RBC Whole Life generates long-term growth. This is the ideal solution for clients having predictable long-term needs.
- Multiple riders available
- Online account access
- Digital e-policy
- Available to permanent residents only
- Option of level costs or annually renewable term costs
- Three death benefit options
- Non-taxable disability protection
Genesis by iA Financial Group is a flexible product that allows you to save and maximize your estate tax-free, insure your mortgage, protect the value of your business, have access to liquid assets for additional retirement income, deal with the unexpected, or bring a project to life.
- Guaranteed costs of insurance
- Surrender value
- Disability benefits
- No electronic policy
- Cost of insurance increasing or uniform
- Multiple investment options
- Consultation service for grieving individuals
Equation Generation IV by Equitable Life of Canada offers the flexibility to change premiums, insurance coverage, and investment options to meet changing needs. It's an ideal choice for life events that can impact your insurance and investment needs, such as having children or retiring, but also for you and your business, and for protecting your estate.
- Online account access is available
- Digital e-policy
- Different bundling options
- Mid-range policy rates
Whole life insurance in Canada gives lifelong protection and a tax-free payout to your family when you pass away. It also grows a cash value you can use for loans, withdrawals, or to cover premiums.
In this guide we tell you everything about whole life insurance in Canada: How it works, what it costs, its pros and cons, and finally is it worth it and right for you.
You can also explore the best whole life insurance plans using our free comparator, compare options, and get over 20 free personalized quotes in a few moments right here.
Whole Life Insurance Canada: 5 Key Points
- Whole life insurance offers permanent coverage with consistent premiums.
- It builds cash value over time, growing tax-deferred and accessible when needed.
- Premiums remain fixed, providing financial predictability.
- It’s ideal for estate planning, covering taxes or leaving an inheritance.
- Some policies pay dividends, which can be reinvested, reduce premiums, or taken as cash.
What is whole life insurance in Canada?
Whole life insurance in Canada is a type of permanent life insurance that provides lifelong coverage as long as premiums are paid. Unlike term life insurance, which expires after a set period, whole life insurance ensures that your beneficiaries receive a tax-free payout whenever you pass away.
Additionally, whole life policies accumulate cash value over time, which grows on a tax-deferred basis and can be accessed through loans or withdrawals for financial needs.
Whole Life Insurance Explained
Consider Sarah, a 40-year-old mother in Ontario. She purchases a whole life insurance policy with $500,000 coverage. Alongside the lifelong protection it offers, Sarah's policy builds cash value over the years. When Sarah retires, she accesses a portion of the cash value to help fund her travel goals, all while maintaining the death benefit for her children. This combination of coverage and savings makes whole life insurance a versatile financial tool for Canadians seeking lifelong security and investment growth.
How does whole life insurance work?
Whole life insurance works by combining lifelong coverage with a savings component. When you purchase a policy, you pay fixed premiums throughout the life of the policy. A portion of these premiums goes toward the death benefit, which is paid to your beneficiaries when you pass away, while another portion is allocated to the policy's cash value.
For example
Imagine John, a 35-year-old Canadian father, purchases a whole life insurance policy with $250,000 coverage. He pays fixed monthly premiums, a portion of which goes toward building the cash value of the policy. After 15 years, John has accumulated $50,000 in cash value. When unexpected expenses arise, such as home repairs, he can borrow against the policy’s cash value while keeping the death benefit intact. Meanwhile, the $250,000 coverage remains in place, ensuring his family receives the payout when he passes away. Whole life insurance thus serves as both a safety net and a financial resource.
What is whole life insurance cash value?
Whole life insurance cash value is like a built-in savings account in your insurance policy. Part of the money you pay as premiums goes into this account, and it grows over time without being taxed. You can use the cash value of a whole life insurance policy in various ways, such as:
- Borrowing Against It: Take a loan using the cash value as collateral, often at a lower interest rate than other loans.
- Withdrawals: Take out some of the cash value directly for personal use, like emergencies or large expenses.
- Paying Premiums: Use the accumulated cash value to cover your future premium payments.
Keep in mind that these options may reduce the total payout your beneficiaries receive.
How soon can I borrow against my whole life insurance?
You can typically borrow against your whole life insurance policy once it has accumulated sufficient cash value. Here's how it works:
- Timeframe: It often takes a few years of premium payments for the policy to build enough cash value to borrow against. This varies depending on the policy and insurer.
- Minimum Cash Value: The amount you can borrow is usually a percentage (e.g., 70–90%) of the total cash value.
- Waiting Period: Some policies have a specific waiting period (e.g., 2–3 years) before loans are available.
How much does whole life insurance cost in Canada?
A woman in her 30s who does not smoke can expect to pay around $140 per month for $250,000 worth of whole life insurance. A man in his forties with a taste for cigars might pay closer to $300 per month for similar coverage.
Whole Life Insurance Quotes
Here’s a table showing approximate whole life insurance rates in Canada by age group:
| Age Group | Coverage Amount | Monthly Premium (Male) | Monthly Premium (Female) |
|---|---|---|---|
| 20s | $250,000 | $100 - $150 | $90 - $140 |
| 30s | $250,000 | $140 - $200 | $130 - $180 |
| 40s | $250,000 | $250 - $350 | $220 - $320 |
| 50s | $250,000 | $400 - $550 | $360 - $500 |
| 60s | $250,000 | $600 - $850 | $550 - $750 |
This chart provides a general estimate of rates. Actual premiums will depend on factors like health, lifestyle, and specific insurer offerings.
Good to know
Because premiums for whole life insurance policies stay the same for the entire term of the policy, it makes good financial sense to purchase a policy sooner, rather than later. It’s the best way to get the cheapest life insurance rates.
How Whole Life Insurance Quotes Are Calculated
- Age: Younger applicants pay lower premiums due to lower risk.
- Gender: Women typically pay less as they have a longer life expectancy.
- Smoking Status: Smokers pay significantly higher premiums due to health risks.
- Coverage Amount: Higher coverage means higher premiums.
- Health History: Good health results in lower premiums, while pre-existing conditions increase costs.
- Policy Features: Policies with faster cash value growth or dividends cost more.
- Payment Terms: Limited-pay policies cost more upfront but eliminate lifetime payments.
- Riders/Add-Ons: Additional features like critical illness coverage increase premiums.
Ready to find out how much life insurance will cost you and lock in a price now? Do it right here using our comparator at the top of this page. Get over 20 personalized whole life insurance quotes in no time.
How much whole life insurance do I need?
Determining the right amount of whole life insurance depends on your financial obligations, future goals, and the legacy you want to leave behind. Here’s how you can calculate your needs with examples:
1. Cover Outstanding Debts
- Add up your mortgage, car loans, and any other debts you don’t want to burden your loved ones with.
- Example: If you owe $200,000 on a mortgage and $30,000 on other loans, you need at least $230,000 to cover debts.
2. Provide for Income Replacement
- Multiply your annual income by the number of years your dependents would need support.
- Example: If your income is $70,000 annually and you want to provide 10 years of financial support, that’s $700,000.
3. Account for Education Costs
- Include tuition, books, and living expenses for your children’s education.
- Example: For two children needing $25,000/year for 4 years, you’d need $200,000.
4. Plan for Final Expenses
- Factor in funeral and burial costs, typically $10,000–$20,000 in Canada.
- Example: Set aside $15,000 to cover funeral costs.
5. Build a Legacy or Cover Estate Taxes
- If you want to leave an inheritance or cover estate taxes, include this amount.
- Example: To leave $100,000 for each of the two children and cover $50,000 in taxes, you’d need $250,000.
Whole Life Insurance Calculation
Let’s say you:
- Owe $230,000 in debts
- Want $700,000 for income replacement
- Need $200,000 for education
- Set aside $15,000 for final expenses
- Plan $250,000 for legacy and taxes
Total Coverage Needed: $1,395,000
Whole Life Insurance Calculator
Planning for your family’s financial future doesn’t have to be overwhelming. The HelloSafe Whole Life Insurance Calculator is a user-friendly tool designed to help you determine the exact amount of coverage you need based on your unique financial situation and goals.
Why Use the HelloSafe Whole Life Insurance Calculator?
- Personalized Results: The calculator takes into account your income, debts, family size, future goals, and more to give you accurate and tailored recommendations.
- Ease of Use: With a simple interface, you can input your details and get results within seconds—no complex forms or calculations required.
- Comprehensive Insights: It factors in everything from outstanding debts and education costs to inheritance planning and estate taxes, ensuring you’re covered in all aspects.
- Instant Recommendations: Receive a clear breakdown of the coverage amount you need and approximate costs for your budget.
Good to know
Whether you’re just starting to explore whole life insurance or refining your coverage plan, the HelloSafe Calculator simplifies the process and empowers you to make informed decisions. Try the HelloSafe Whole Life Insurance Calculator now and secure the right protection for your family today!
What are the types of whole life insurance in Canada?
Whole life insurance comes in various forms to meet different needs. While all types provide lifelong coverage and build cash value, they differ in terms of premium payment structure and additional features. Here are two main distinctions:
- Traditional Whole Life Insurance: Offers fixed premiums, guaranteed cash value growth, and lifelong protection.
- Limited Pay Whole Life Insurance: Allows you to pay premiums over a shorter period (e.g., 10, 15, or 20 years), while coverage lasts for life.
| Feature | Traditional Whole Life | Limited Pay Whole Life | Single Premium Whole Life | Participating Whole Life Insurance |
|---|---|---|---|---|
| Premium Payment Duration | Pay premiums throughout the policyholder’s life | Pay premiums for a limited period (e.g., 10–20 years) | One-time lump-sum payment | Typically throughout life, but may vary |
| Cash Value Growth | Guaranteed and steady | Guaranteed and grows faster due to shorter payment duration | Immediate cash value build-up | Includes dividends for additional growth |
| Cost | Lower annual premiums but paid for life | Higher annual premiums but paid for a shorter time | High upfront cost | Moderate premiums, may vary with dividends |
| Dividends | ||||
| Best For | Those seeking affordability and predictability | Those wanting to pay off early with long-term coverage | Those with significant funds available upfront | Those seeking potential for extra returns |
What is term vs whole life insurance?
The biggest difference between whole and term life insurance is that the former will pay a death benefit no matter when the policyholder dies. A term life insurance policy will pay a benefit only if the policyholder dies during the term of the policy.
Here's a look at the key differences.
| Type of life insurance | Term life | Whole life |
|---|---|---|
| Length | A set term: usually between 10 and 30 years | Lifetime coverage, assuming premiums are paid |
| Cost | Starts low and increases | More expensive, but offer level premiums |
| Dividends possible | ||
| Cash value | ||
| Complexity | Easy to understand | Can be confusing |
| Flexibility | Easy to cancel | Cancellation may incur a fee |
Now, let’s take a look at a few examples.
For example
In 1992, Frances purchased a term life insurance policy with coverage for the next 30 years. In March 2022, she renewed her policy for another three decades to make sure her children, aged 18 and 20, receive a benefit should something happen soon.
A whole life insurance policy, on the other hand, covers your entire life and ensures that your beneficiaries receive a benefit no matter when you pass away. Here's an example of how whole life insurance works:
For example
In 1974, Marc purchased whole life insurance to protect the financial well-being of his wife and young children should he, the sole breadwinner, pass away unexpectedly. He diligently paid his monthly premiums up until his death in March 2022. Marc’s wife predeceased him, however, his son and daughter will both receive benefit payments from his insurer.
What is the difference between universal life insurance and whole life insurance in Canada?
Universal life insurance and whole life insurance are both forms of permanent life insurance that provide coverage for your entire life. However, they differ in terms of flexibility, cash value growth, and cost. Here's a quick breakdown:
- Whole Life Insurance offers fixed premiums, guaranteed cash value growth, and predictable coverage for those seeking stability.
- Universal Life Insurance provides more flexibility, allowing you to adjust premiums and coverage while offering investment options for cash value growth.
Key features of types of permanent life insurance
Whole Life Insurance:
- Fixed premiums and guaranteed death benefit.
- Steady, tax-deferred cash value growth with predictable returns.
Universal Life Insurance:
- Flexible premiums and adjustable coverage to adapt to changing needs.
- Cash value tied to investments, offering potential for higher returns but with risks.
Comparison Table: Universal Life Insurance vs. Whole Life Insurance
| Feature | Whole Life Insurance | Universal Life Insurance |
|---|---|---|
| Premiums | Fixed for life | Flexible; can be adjusted |
| Cash Value Growth | Guaranteed and predictable | Investment-based; potential for higher growth but riskier |
| Investment Options | Limited (dividends on participating policies) | Broad range of investment options |
| Death Benefit | Fixed | Adjustable based on needs |
| Best For | Individuals seeking stability and predictability | Those who want flexibility and higher growth potential |
| Risk Level | Low (guaranteed returns) | Medium to high (investment-dependent) |
| Cost | Higher due to guarantees | Varies; may be lower initially but depends on investments |
How do you purchase whole life insurance?
As with other types of life insurance policies, you can opt to purchase coverage directly from the insurer or through a qualified broker.
Researching and comparing plans means you can feel confident that the policy you purchase meets your needs and budget exactly. It can also, however, require a great deal of time and effort, as well as specialist knowledge.
Purchasing through a broker might seem more expensive due to fees, but can save you money in the long run. Most brokers and financial institutions can negotiate discounts and other advantages on your behalf, including lower premiums.
You could also simply use our free comparator at the top of this page to compare plans yourself and get the best deals on various life insurance types and free personalized quotes right here.
What is the best whole life insurance in Canada?
The best whole life insurance plan in Canada depends on individual needs, preferences, and financial goals. However, the most well-known and reputable insurance companies in Canada offering whole life insurance plans include:
| Insurance Provider | Canada Whole Life Insurance Features | Action |
|---|---|---|
| Beneva Life Insurance |
| |
| Empire Life |
| |
| RBC Whole Life Insurance |
| |
| iA Financial Group |
| |
| Equitable Life of Canada |
| |
| Canada Life Whole Life Insurance |
| |
| BMO Insurance |
| |
| TD Whole Life Insurance |
| Consult TD advisor through its website |
How to cancel a whole life insurance policy?
You may decide to cancel your policy if your needs or situation changes. This could be because you found a better policy, because your dependents are now financially independent, or you because can no longer keep on top of the premiums.
Good to know
If you just took out your policy you may still be in the “free look” period. If so, may have the right to cancel and get a refund.
To cancel you will need to contact your insurer directly. This is usually done in writing, by phone or online.
If your policy has a remaining cash value, you can take some of that money with you. The cash value minus the fees is known as the cash surrender value. Early on, the fees can take up a significant percentage of the cash value, but it is less painful for an older policy.
Good to know
Cash surrender value = cash value - surrender fees
What are the drawbacks and benefits of whole life insurance?
Benefits of whole life insurance Canada
- Lifetime Coverage: Offers coverage for your entire life, ensuring your beneficiaries receive a payout regardless of when you pass away.
- Cash Value Component: Builds tax-deferred savings over time, which can be accessed through loans, withdrawals, or to pay premiums.
- Fixed Premiums: Your premiums remain consistent throughout the policy, providing predictability in budgeting.
- Estate Planning: Helps cover estate taxes or leave an inheritance, making it ideal for legacy planning.
- Dividends (if applicable): Some policies offer dividends that can be reinvested, used to reduce premiums, or taken as cash.
Drawbacks of whole life insurance Canada
- Higher Premiums: Costs significantly more than term life insurance, which may not be affordable for everyone.
- Complexity: Policies can be more challenging to understand compared to simpler term life insurance plans.
- Limited Investment Returns: The cash value growth is typically slower compared to other investment options.
- Surrender Fees: If you cancel the policy early, surrender charges may eat into the cash value.
- Over-insurance Risk: If your needs change, you might pay for coverage or benefits you no longer require.
Is whole life insurance worth it?
Now that you've read everything you need to know about whole life insurance, is it right for you? When deciding whether whole life insurance is worth it for you, it’s important to consider your financial goals and obligations. If you value lifelong coverage and the ability to build cash value that can serve as a financial asset, this type of policy could be a smart investment.
For some, the peace of mind that comes with knowing their family’s future is secure is invaluable. With its combination of coverage and financial growth potential, whole life insurance can be a practical solution for Canadians looking for long-term financial stability. To explore your options, compare the best whole life insurance Canada policies using our comparator at the top of this page, get free quotes, and find the coverage that fits your life today and tomorrow.
Is Whole Life Insurance Right for You?
Whole life insurance is ideal for individuals seeking lifelong coverage, estate planning, or those who want a policy with a savings component. However, if affordability or temporary coverage is a priority, term life insurance might be a better option. Always assess your financial goals and needs before deciding.
