Methodology: How did we rank life insurance companies?

Our life insurance company rankings were the result of in-depth research into key factors like:

• Coverage amounts: We evaluated the maximum and minimum coverage offered to ensure a range suitable for various financial needs
• Term lengths: Term lengths were assessed to give an overview of the variety of different company’s offerings
• Premium rates: We compared the cost of premiums to identify the most affordable options for consumers
• Application process: Analyzed the ease and convenience of applying for a policy, including underwriting requirements
• Online access: Reviewed the availability and functionality of online tools and account management features
• Rider options: Considered the range and flexibility of additional riders that can customize and enhance the base policy
• Key features: We have highlighted unique or standout features that add value to the policy.
• Financial strength rating: Examined the company’s financial stability and ability to meet its long-term obligations
• And more

Our team of licensed insurance advisors worked together to carefully assess the different policies available in Canada. Using this, we narrowed down a list of the best insurance company for life insurance products that meet diverse needs.

How much does life insurance cost?

The cost of life insurance depends on factors such as your age, smoking status, gender, medical history, coverage amount, and policy type.

Term life policies normally cost a lot less than whole life. This is because it usually doesn’t last as long and doesn’t have extra features like cash value and dividends.

*Representative values based on average monthly costs of term and whole life premiums for $100,000 in coverage from Canada’s best life insurance companies.

What’s the best type of life insurance?

The best type of life insurance policy again depends on your own circumstances, needs, and goals. It will be different for everyone. For example:

1. Term life insurance 

This is the best option for you if you are relatively young and have short-term financial needs or obligations, such as paying off a mortgage or supporting young children. 

Many Canadians prefer this type of insurance because it offers substantial coverage for a lower premium over a specified term, typically ranging from 10 to 30 years.

2. Whole life insurance 

This type of insurance is ideal if you are looking for lifelong coverage that not only protects your beneficiaries but also allows you to accumulate savings over time. 

Whole life insurance policies come with an investment component that builds cash value, which you can borrow against or use during your lifetime for various financial needs.

3. Universal life insurance 

Consider this option if you desire the lifelong coverage provided by a whole-life policy but with more flexibility in managing the investment component. 

Universal life insurance allows you to adjust your premiums and death benefits while giving you control over how the investment portion is allocated, potentially maximizing your policy’s value based on your financial strategy.

4. No-medical life insurance 

This type of policy is most suitable if you have existing health issues or prefer not to undergo extensive medical examinations and answer detailed health-related questions. 

No-medical life insurance offers the convenience of quicker approval and can provide peace of mind for those who might otherwise have difficulty qualifying for traditional life insurance policies.

If you’re unsure, book some time with one of our licensed advisors to get expert advice on which type of policy would best fit your needs.

Market changes and innovations in life insurance in Canada

The Canadian life insurance industry is evolving rapidly, driven by digital transformation and changing consumer expectations. At PolicyAdvisor, we constantly leverage artificial intelligence to improve your insurance-buying experience.

Some of the AI tools that we have built and implemented are:

• AI-powered life insurance calculator that analyzes your unique profile—age, health history, lifestyle factors—to generate personalized quotes from top Canadian insurers
• AI-driven advisor support that assess sentiment and engagement levels during consultations, helping our licensed experts customize policy suggestions based on individual concerns and preferences
• AI-assisted scheduling system automatically assigns the right advisor based on availability and expertise, ensuring our customers are matched with specialists who can address their specific insurance needs efficiently

Market trends also reflect growing demand for digital-first solutions and new policy types. Many of our insurance partners, including Sun Life, Manulife, Canada Life, and others, use predictive analytics to refine underwriting and offer faster approvals, sometimes without the need for a medical exam. 

How to get the best term life insurance Canada?

You can find the best insurance policies for your needs on PolicyAdvisor. Our advanced AI calculator helps you instantly compare life insurance quotes from 30 of Canada’s top insurers—all under 60 seconds! 

Prefer personalized guidance? Schedule a free, no-obligation call with one of our licensed advisors. Get answers to all your questions without the pressure of making a hurried decision. 

Get started now and take the first step towards securing your family’s future with PolicyAdvisor!

Which is the top insurance company in Canada?

The top 5 life insurance companies in Canada are Canada Life. Manulife, Sun Life, Industrial Alliance (iA), and Desjardins if you’re looking at size and financial strength alone.

In our ratings, we looked at more than just financial strength, though. Other policy details matter when you’re figuring out which ones are the best Canadian life insurance companies.

What’s the cheapest life insurance in Canada?

Term life insurance is the cheapest type of insurance policy in Canada. Premiums are lower because coverage is temporary, and the policies don’t have extra options like a savings & investment component — the way whole life insurance does.

Life insurance premiums depend on your personal details as well as your policy details. In general, you’ll get the lowest life insurance rates if you are:

• Young
• Healthy
• Non-smoker
• Female

What’s the best amount of life insurance to buy?

You should get enough life insurance to cover your family’s needs. The general rule of thumb is to get 10-12 times your annual income. But you may need more.

The best way to find out how much life insurance you should buy is to use our life insurance calculator. It will ask you some questions and then tell you the best amount for your needs.

How to get the best quotes for term life insurance?

You can find the best quotes for term life insurance on PolicyAdvisor.com. Our online platform lets you easily customize your plan and compare quotes from leading providers in under a minute.

Save time and money when you shop and compare online. Click the button below to get started now.

What are the best life insurance options for Canadians with pre-existing conditions?

Canadians with pre-existing conditions have several life insurance options, depending on their health status and coverage needs. Simplified issue life insurance requires no medical exam but may include a short health questionnaire. Guaranteed issue life insurance is available without medical questions but often comes with higher premiums and lower coverage amounts. Some insurers also offer rated traditional policies, where coverage is granted with adjusted premiums based on medical history.

Can non-residents buy life insurance in Canada, and what are the requirements?

Yes, non-residents can buy life insurance in Canada, but eligibility depends on factors like residency status, country of citizenship, and medical history. Most insurers require applicants to be in Canada during the application process and undergo medical underwriting.

Some policies may have additional restrictions for applicants from high-risk countries. Proof of ties to Canada, such as property ownership or financial interests, may also be necessary.

What should parents know about buying life insurance for their children?

Parents can purchase life insurance for their children as a way to secure future insurability and provide financial protection. Child life insurance policies typically offer lifelong coverage with fixed premiums and the option to build cash value over time.

Some policies allow children to convert coverage into larger amounts without medical exams when they become adults. Riders on a parent’s policy can also provide affordable coverage for children.

What are the tax implications of life insurance payouts in Canada?

In Canada, life insurance death benefits are tax-free for beneficiaries. However, if the policy has a cash value component, any withdrawals or loans taken against it may be taxable. For business-owned policies, taxation depends on how the proceeds are distributed. Additionally, life insurance can play a role in estate planning, helping to offset potential taxes on assets passed to heirs.

Can life insurance policies be bundled with other types of insurance for better rates?

Yes, some insurers offer bundling discounts when life insurance is purchased alongside other policies such as home, auto, or critical illness insurance. Bundling can simplify policy management, reduce premiums, and provide enhanced benefits. 

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Which is better, permanent or term life insurance?

The choice between permanent and term life insurance depends on your needs. Term life insurance is affordable and provides coverage for a set period, ideal for temporary needs like mortgage payments or raising children. 

Permanent life insurance offers lifelong coverage and builds cash value, making it better for estate planning or long-term financial goals. If cost is a concern, term insurance works well. But, for lasting benefits and asset growth, permanent insurance is the better choice.

Is a term life insurance application easier than whole life insurance?

In general, it’s easier to get a term policy than a whole one. Most insurers offer simplified issue term life plans that require no medical screening, or accelerated underwriting, which waives the need for a medical exam for low-risk applicants. These factors make term life insurance more accessible.

Whole life insurance, on the other hand, typically involves a more rigorous application process, often requiring medical exams. This is because the insurance company takes on more risk with this kind of policy, so they need to make sure it’s worth it for them.

Can you have both term and whole life insurance?

Yes, you can have both term and whole life insurance in Canada. This approach, often called “combination coverage” or “layering,” allows you to meet different financial needs at various life stages.

Term life insurance provides affordable coverage for temporary needs like paying off a mortgage, funding education, or income replacement during your working years. Whole life insurance, on the other hand, offers lifelong protection and builds cash value, which can be used for estate planning, retirement, or covering final expenses.

Term insurance handles immediate, time-limited obligations, while whole life insurance ensures permanent coverage and a savings component. By combining both policies, you can balance affordability with long-term financial security.

Do I need both term and whole life insurance?

Whether you need both term and whole life insurance depends on your financial situation and long-term goals. Combining both can provide comprehensive protection that addresses different needs.

Term life insurance is ideal for covering short-term financial obligations such as mortgages, children’s education, or replacing income during your peak earning years.

Whole life insurance, on the other hand, offers lifelong protection while supporting your estate planning needs. It also builds cash value, which you can borrow against in the future.

In summary, having both types of insurance can help you meet your short-term financial needs while ensuring lifelong protection and peace of mind for you and your loved ones.

Should I switch my term life insurance to whole life insurance?

Switching from term life insurance to whole life insurance depends on your financial goals and evolving needs. Term life insurance is ideal for covering temporary obligations, while whole life insurance provides lifelong coverage and builds cash value.

You might consider switching if your financial priorities have shifted to include estate planning, wealth transfer, or retirement savings. However, whole life premiums are significantly higher, so it’s important to assess whether the added benefits align with your budget and goals.

If you need both affordability and permanent coverage, you may also explore a combination of both policies instead of a full switch. Consulting our licensed advisors can help you decide if this move fits your overall strategy.

Are there any alternatives to term life insurance and whole life insurance?

Yes, there are several alternatives to term life and whole life insurance including universal life, variable life, indexed universal life, and 1-year term life insurance:

• Universal life insurance: Offers lifelong coverage like whole life but with added flexibility, allowing you to adjust or skip premium payments and modify the death benefit
• Variable life insurance: Provides lifelong coverage and a guaranteed death benefit. The cash value grows based on your chosen investments, making it riskier and costlier
• Indexed universal life insurance (IUL): A type of universal life insurance where the cash value grows based on the performance of a specific stock index. It carries higher risks similar to variable life insurance
• 1-year term life insurance: Designed for short-term needs, such as between jobs, offering affordable coverage while you explore long-term insurance options

You may also want to look into critical illness and disability insurance, which provide financial support in the event of serious illness or disability. Together with life insurance, they create a well-rounded safety net against various uncertainties.

Which is better to have, whole life or term life insurance?

Choosing between whole life insurance and term life insurance depends on your needs. Term life insurance is ideal for affordable, temporary coverage to protect your family or cover financial obligations like a mortgage. It offers a death benefit but doesn’t build cash value.

Whole life insurance, on the other hand, provides lifelong coverage, a guaranteed death benefit, and builds cash value over time, making it ideal for long-term financial planning and estate protection.

If you’re looking for the best term or whole life insurance policy, speak to a PolicyAdvisor expert to compare and find the best plan for your needs and budget. With PolicyAdvisor, you’ll receive free instant quotes, the lowest rates in the market, and lifetime after-sales support. Schedule a free consultation today!

Frequently asked questions 

Who is likely to be affected by the new capital gains inclusion rate?

The new capital gains inclusion rate is mostly going to affect active investors or corporations who realize capital gains on a regular basis through sales of assets. However, it will also affect individuals, business owners, homeowners, trusts, and corporations in those years where they have significant sales of assets, even if such sales happen occasionally for them.

What is the capital gains tax in Canada in 2024?

The inclusion rate—the amount of taxable capital gain—has been increased from 50 percent to 67 percent for capital gains above $250,000. 

Can I gift a house to my children without paying capital gains tax?

While there is no gift tax in Canada, capital gains will have to be paid on the house you give to your children unless it is your principal residence.

Disclaimer: The information provided herein is for informational purposes only and should not in any way be construed as tax advice. You should consult with a qualified tax professional or financial expert regarding your specific tax situation and needs. 

Life insurance can cost anywhere from $10-70 per month on average. But it also depends a lot on your personal factors and on your policy details.

In this article, we provide specific quotes for life insurance based on some of the most common factors, like age, amount of coverage, and policy type. And, we tell you how you can lower your premium costs.

The cost of life insurance in Canada

The cost of life insurance in Canada varies based on factors like age, health, coverage amount, and policy type. In general, you can expect to pay around $10 a month for $100,000 in coverage for a 10-year term policy. A participating whole life policy can cost between $44 to $54 for a $100,000 coverage for a 20-year-old Canadian. 

Life insurance rates by age in Canada

Age is one of the biggest factors in the cost of life policies, because it’s directly linked to your life expectancy.

Check out our life insurance rates by age charts for Canada below to see the average life insurance cost per month for someone in their 30s, 40s, 50s, and 60s.

Average term life insurance premium costs by age

This quote is for a 20-year term for an individual in good health and a non-smoker, organized by gender. Please note that coverage for a 20-year term is only available up to age 65. 

Life insurance rates by coverage amount

Canadian life rates vary a lot based on the amount of coverage you buy. This is how much your family would get when you pass away, and is usually the same thing as the life insurance death benefit amount.

Check out the quotes prices below to see rates for insurance by coverage amount at different ages.

Average term life insurance premium costs by coverage amount

This quote is for a 20-year term for an individual in good health, organized by gender and smoking status. Please note that coverage for a 20-year term is only available up to age 65. 

How much life insurance coverage do I need to buy?

In general, you should get at least 10-15x your annual income in coverage. But, the amount you need depends a lot on your individual circumstances and needs. You should think about how much your family would need for things like:

• Your outstanding debts like student loans, credit card bills, etc.
• Your end-of-life expenses like funeral costs and other final expenses
• Future estate taxes or capital gains taxes on your assets
• Their everyday household expenses and other long-term financial goals
• Childcare costs and future education funds
• Replacing your income
• Supplementing any other existing insurance coverage
• Any other special factors unique to your family

Use our free calculator to help figure out how much coverage you should buy, or book some time with one of our licensed advisors for personal help.

Life insurance rates by policy type

Different types of life insurance policies have different premium costs. How much you pay will vary based on if you have:

• Term
• Whole (permanent)
• No-medical
• Children’s insurance
• Seniors’ insurance
• Couple’s insurance (joint policies)
• Smokers’ insurance

Keep reading to see costs for each of these below.

How much does term life insurance cost?

As mentioned above, term life insurance plans generally cost about $10 a month for $100,000 in coverage if you are young and healthy. But this can depend on your term length, how much coverage you have, and other factors.

Check out the table below for general term life insurance policy rates, based on age and term length.

Term life insurance quotes in Canada

*Quotes based on $500k in coverage for a non-smoker in regular health

How much does whole life insurance cost?

Whole life insurance, which is a type of permanent insurance, usually costs more because it covers you for your entire life. It also has a cash value component that you can use in your lifetime.

To get an idea of average whole life insurance rates, check out these whole life quotes below.

Whole life insurance quotes in Canada

*Quotes based on $100k in coverage for a non-smoker in regular health. Participating policies have cash value and dividends. Non-participating policies only have cash value.

How much does no-medical life insurance cost?

The cost of life insurance policies that do not need a medical exam, also called no-medical insurance, tend to be higher than both term and whole insurance. This type of policy is popular for people who have poor health, or who want to get coverage quickly. But it has a lot more downsides.

• Premiums for no-medical insurance can be more than double the amount term life costs
• Coverage is also usually limited, so you can pay a lot more for a lot less protection

How much does life insurance for kids cost?

The price for children’s life insurance is cheaper than if you bought it as an adult—in some cases children’s insurance costs a little as $3 per month. You can purchase life insurance for a newborn child and older children either by:

1. Adding it as a rider to your life policy for a few extra dollars per month
2. Buying your child their own whole life policy

Cost of life insurance for kids

How much does life insurance for seniors cost?

The average life insurance rate for seniors in Canada is around $100/month. The cost increases as you age, so seniors can expect to see higher premiums. But it also depends on other details.

• A 10-year term for a healthy 60-year-old may only cost $35/month
• A permanent policy could cost around $110/month

Average cost of life insurance for seniors

How much does life insurance for smokers cost?

Premiums for smokers can cost almost twice as much as non-smoker rates. This is because smoking can lower your life expectancy.

• A 30-year-old smoker in normal health can expect to pay upwards of $60/month for $500,000 in coverage for a 20-year term
• Compare that to the $30/month in premiums a non-smoker would have to pay for the same amount of coverage

What is the average cost of life insurance for couples?

The average cost of life insurance for couples is around $30/month if they purchase a joint policy that covers both of them together and they’re both fairly young and healthy. The price doesn’t differ that much from individual term life insurance quotes, and it covers both partners at once.

The average cost of life insurance for couples can vary depending on the combined coverage and whether the policy is joint or separate. Below are some sample premium costs based on a $500,000 term life insurance policy.

Cost of life insurance for couples in Canada

*Sample quote: Actual premiums, coverage options, terms, and conditions may vary based on factors including, but not limited to, group size, demographics, geographic location, industry, and underwriting criteria.

Life insurance rates by health and lifestyle factors

Your health, lifestyle, and job can significantly impact the cost of your life insurance premium. Below are some key factors that affect rates.

How smoking affects the cost of life insurance

Smoking is a significant factor that can significantly increase life insurance premiums. Insurers view smoking as a major health risk, leading to higher rates for smokers compared to non-smokers. The difference in premiums can be substantial, often doubling or more, especially as you age.

How health and family history affect the cost of life insurance

Your personal health and family medical history are critical factors in determining your life insurance premiums. 

Insurers assess your health status and look at your family’s medical history to gauge potential risks. If you have pre-existing conditions or a family history of serious illnesses, you can expect higher premiums.

High-risk activities and lifestyles that affect the cost of life insurance

Engaging in high-risk activities or having a lifestyle that includes extreme sports or dangerous hobbies such as skydiving, scuba diving, or mountain climbing, can lead to higher life insurance premiums. Insurers consider such activities as increased risks, which directly affect the cost of your policy.

How your job impacts the cost of life insurance

Your occupation is an important factor that insurers consider when determining life insurance premiums. Jobs that are considered high-risk due to the nature of the work, such as construction, mining, or aviation, typically lead to higher insurance costs.

How do insurance companies calculate the cost of your life insurance premiums?

Insurance companies base your premiums on your risk profile — this is their assessment of how risky it would be for them to cover you.

• Insurance companies want to avoid risk as much as possible
• The shorter your life expectancy, the higher the chance that they will have to pay out a lot of money soon — and that’s a risk for them
• Insurers look at personal information about you and your lifestyle to gauge your life expectancy
• They then compare your life expectancy against how much you’re asking them to cover you for, and use that to decide how much it will cost you — and whether to cover you at all

What affects life insurance prices?

The key factors insurance companies look at to determine the cost of your life insurance premiums can be separated into two categories:

Your personal health and lifestyle

Age and birthday: The younger you are, the cheaper your premiums will be. And, if your birthday is in less than 6 months, the insurance company will consider you to be that age instead of your current one.

Gender: Canada’s statistics show women have a life expectancy around 4 years higher than men. This means rates for women are usually lower than for men.

Smoking status: As we showed above, smokers have much higher premiums because it’s not healthy. This includes marijuana, vaping, and e-cigarettes.

Current health status: The healthier you are, the better your insurance rates will be. Insurance providers look at things like your weight and BMI, previous illnesses, history of drug use and more.  

Family medical history: Some health conditions can be passed down through your family. So, insurance companies look at your family’s health history to see how likely it is you might get certain illnesses and pass away sooner than expected.

Occupation: Some jobs are considered more risky than others. Think of firefighters, police officers, pilots, and even fishermen whose lives can be at risk on the job. They also have higher premiums.

Foreign travel: If you travel a lot to high-risk countries, you may also be charged more. Or, you could be denied completely.

The details of your insurance policy

Type of policy: In general, term life is the cheapest type of life insurance plan. Term life insurance policy quotes are the lowest, then whole life, and no-medical costs the most.

Term length (for term life plans): In many cases, a longer term costs more than a shorter term. A 20-year term usually costs more than a 30-year term. But, bear in mind that this isn’t always the case.

Coverage amount: The more coverage you get usually means you pay more for premiums. This is why it’s important to use a calculator to make sure you’re not buying more than you actually need.

Policy options and riders: You can buy optional life insurance riders to give you more coverage, like insurance for critical illness or disability. But it will cost you a bit more.

How can I lower the cost of my life insurance premiums?

There are some ways you can lower your insurance premium.

• Change your payment method: Insurance premiums are usually paid monthly. But, many providers give you a discount if you pay yearly instead
• Don’t skip the medical exam: Some policies and options let you skip doing a medical exam. But, policies that are fully underwritten, meaning they require a health test, often cost less than other types
• Compare quotes: You’re allowed to shop and find a better policy. And, trustworthy, reliable life insurance professionals like us will encourage you to do so!
• Improve your health: Committing to a healthy lifestyle can help you save on insurance costs, such as quitting smoking, losing weight, lowering your cholesterol to bring your blood pressure down, etc

Frequently asked questions

What are life insurance premiums?

Life insurance premiums are the payments policyholders make to maintain their coverage. These can be paid monthly, quarterly, or annually, depending on the policy. The cost of your premium will be based on factors like age, health, coverage amount, and policy type.

Is life insurance paid monthly?

Life insurance payments can be made either monthly or annually. Most people choose monthly payments. But, you can get lower prices by switching to a yearly plan.

For permanent insurance, you also have the option to condense your payments so you only pay for a certain amount of years. This is called a limited-pay plan.

What is the cheapest life insurance?

The cheapest form of coverage is term life insurance. This type of insurance policy provides coverage for a set period of time or term. So, term life insurance rates tend to be less than permanent coverage that lasts your entire life.

Learn more about the cheapest life insurance in Canada.

How can I get preferred rates for life insurance?

Preferred rates are only offered to people who have a low-risk profile. This usually means they:

• Maintain excellent health
• Don’t smoke or have quit smoking
• Don’t participate in risky activities like extreme sports
• Have regular checkups

Is life insurance worth the cost in Canada?

Yes, life insurance is well worth the cost. Especially since premiums are often very affordable. You get the benefit of:

• Financial security for your family
• Peace of mind in knowing that they’ll be provided for
• Reliable estate planning
• A way to clear outstanding debts
• Future college funding for young children
• A business continuity strategy
• Tax-free savings

Does inflation affect the price of life insurance premiums in Canada?

Yes, inflation can affect life insurance rates by:

• Increasing the cost of new premiums
• Making the death benefit have less buying power
• Making your whole life cash value increase

How long do insurance companies consider criminal records?

The time insurers look back at your criminal record depends on the company. Some only ask about offences within the past 12 months, while others may review records going back 5, 10, or even a lifetime.

Many insurance providers that PolicyAdvisor works with will still consider your application if you have a criminal record. Still, approval depends on the severity of the offence and how much time has passed. Just because an insurer asks about your record doesn’t mean they’ll automatically deny you.

Here’s a breakdown of how far back each insurance company looks when assessing traditional life insurance applications.

This list is based on general application questions and does not mean that these insurance companies will accept your application if you were convicted before the period they asked about. Any mention of a criminal record at any time may mean the insurance company will ask for a criminal record check. 

What kind of life insurance can you get with a criminal record?

If you have a criminal record, insurers may classify you as a high-risk applicant, making it harder to qualify for traditional life insurance. However, you still have options like simplified issue life insurance and guaranteed issue life insurance. 

Depending on your record and the insurer’s criteria, you may be eligible for the following types of coverage:

• Traditional life insurance – Some insurers may approve you for standard term or permanent life insurance, especially if your offence was minor or occurred long ago
• Simplified issue life insurance – No medical exam is required, but you must answer some health and lifestyle questions. This option is more accessible to high-risk applicants
• Guaranteed issue life insurance – No medical exams or health questions. Approval is almost guaranteed, but coverage limits are lower, and premiums are higher

Simplified issue life insurance

Simplified issue life insurance has a faster and easier application process than traditional life insurance. It typically requires no medical exam and asks fewer questions, making it more accessible to high-risk applicants.

However, some insurers still inquire about criminal records, though they may focus on convictions from further in the past compared to traditional policies. Approval depends on factors like the severity of the charge and the time since conviction.

Since insurers take on more risk by reducing their screening process, premiums are higher than traditional policies. If you have a criminal conviction, here are your best simplified issue life insurance options:

Guaranteed issue life insurance

Guaranteed issue life insurance is a “no questions asked” policy for those who can’t qualify for traditional or simplified coverage. There are no medical exams and only basic eligibility questions, such as age and residency status.

Some insurers, like CPP, still ask about recent convictions, but if your offence happened long ago, it won’t affect approval. This is the easiest option if you have a criminal record, but premiums are higher due to the lack of underwriting.

Can you get life insurance if you’re in jail?

Getting life insurance while in jail is extremely difficult and, in most cases, not possible. Most insurers automatically decline incarcerated applicants, awaiting trial, or on probation. Even after you are released, many companies require at least one year to pass before considering your application and approval is not guaranteed.

If you attempt to apply from jail, you must:

• Prove financial stability to pay for coverage
• Demonstrate stable health through medical records
• Provide a full history of drug/alcohol use and other personal details

Even with these documents, traditional life insurance is unlikely to be an option. If you’re incarcerated, your best chance at coverage will be after release, once you’ve met an insurer’s waiting period requirements.

Can you get life insurance if you’re on probation?

Yes, it’s possible to get life insurance while on probation. However, your application’s approval depends on the length, type, and severity of your probation, and your insurer’s risk assessment.

• Length of your probation – Longer probation periods may raise red flags for insurers
• Type and severity of the crime – Felony convictions make approval much harder than misdemeanours
• Insurer’s risk assessment – Some companies may approve coverage but with higher premiums or shorter policy terms due to the added risk

In some cases, insurers may also require a third-party guarantor, such as an employer, to vouch for your good behaviour during probation.  

What to do if my life insurance application is rejected?

If your life insurance application has been rejected due to a criminal record, you can still consider other options such as a simplified or guaranteed issue policy, or schedule a call with an experienced advisor to help find an insurer. 

• Apply for simplified issue or guaranteed issue life insurance – These policies are designed for individuals who have difficulty obtaining traditional coverage
• Speak with an insurance advisor – Our advisors have access to 30+ Canadian insurers and may be able to help find a provider willing to offer coverage based on individual circumstances

Does life insurance cover criminal death?

If you die while committing a crime, your beneficiary may not receive the payout. Other common exclusions include death due to reckless endangerment, such as racing a car, or pre-existing medical conditions that weren’t disclosed on the application.  

Will my criminal record affect the cost of my life insurance?

Yes, having a criminal record will usually affect your life insurance rates. The cost of life insurance will fluctuate based on your health and lifestyle. With traditional life insurance, the company may put a rating, meaning a scaled price increase, depending on how long ago your charge was and the severity of it. 

If you’re denied traditional life insurance, you can apply for simplified or guaranteed issue life insurance, but the base costs of these policies are higher than traditional ones. 

How to apply for life insurance if you’ve had a criminal conviction?

If you have a criminal conviction, the best approach is to speak with a licensed life insurance expert at PolicyAdvisor. Our team can review your history without judgment and help find the best possible coverage for you and your family. 

Everyone deserves financial protection for their loved ones, and we’re here to make that happen—no matter your past. Schedule a call today to explore your options.

Does a GI rider increase my death benefit automatically?

No, the GI rider does not automatically increase your death benefit. Policyholders must actively choose to exercise the option during the eligible periods. If you miss the specified timeframes, you may lose the opportunity to purchase additional coverage under the guaranteed terms. Therefore, it’s essential to keep track of eligibility windows and plan for future coverage needs accordingly.

Does every life insurance policy in Canada offer a GI rider?

No, not all policies include a GI rider. While many term life and permanent life insurance plans offer this option, availability depends on the insurer and the specific policy type. Some lower-cost term policies may not include the option for future coverage increases, so it’s important to review the policy details before purchasing.

Can I use a GI rider multiple times?

Yes, most policies allow multiple uses of the GI rider, but there are limits on how often and how much coverage you can add. Typically, policyholders can increase their coverage every few years (e.g., every three or five years) or after qualifying life events. However, there may be a maximum amount of additional coverage you can purchase over time. Once you reach that limit, you may need to apply for a separate policy if you require further coverage.

Can I add a GI rider after my policy is issued?

No, most insurers require the GI rider to be added at the time of policy application. This is because the insurer assesses the financial risk upfront when underwriting the policy. Once your policy is issued, you cannot typically add this rider. However, some insurers may offer flexible options, so it’s best to speak to our insurance advisors to explore alternatives.

What can whole life insurance be used for?

Whole life insurance can be used for a variety of purposes such as to cover funeral expenses, build wealth, pay for premiums, estate planning and more.

• Cover funeral expenses
• Build wealth
• Pay premiums
• Support a family
• Protect your children
• Leave a legacy
• Preserve an inheritance
• Support a business

How does whole life insurance work?

A whole life insurance policy requires you to pay a fixed premium amount to keep the policy active. A portion of these premiums goes toward the death benefit, while the rest is invested in the policy’s cash value. 

Over time, the cash value grows on a tax-deferred basis. You can borrow against it or withdraw funds under certain conditions. The policy remains in force as long as premiums are paid, ensuring that the death benefit is paid out when the insured passes away.

What are cash value and cash surrender value?

Cash value and cash surrender value are both “living benefits” that you can access from your whole life policy while you are alive.

Cash value is the amount of money that builds in a whole life insurance policy through the investment component. You can access this in multiple ways but only when you’re alive. Simply put, it is the policyholder’s share of the death benefit that can be claimed during the policyholder’s lifetime.

Cash surrender value is the actual amount of money you get from cash value after fees if you cancel or surrender your whole life policy.

Types of whole life policies

Whole life insurance policies can be broadly categorized into participating and non-participating types. Participating policies allow policyholders to receive dividends, which can be used to reduce premiums, purchase additional coverage, or be taken as cash.

These dividends are not guaranteed but depend on the insurer’s financial performance. In contrast, non-participating policies do not offer dividends but often come with fixed premiums and guaranteed benefits, providing more predictable coverage.

Both types offer lifelong protection and a cash value component, but the choice depends on individual financial goals and risk preferences.

Advantages of whole life insurance

The main benefits of whole life insurance Canada are that it offers lifelong coverage, builds cash value, and pays a guaranteed death benefit.

• Lifelong coverage – Your policy will never expire once premiums are paid
• Cash value – Premium payments are reinvested and grow cash value that you can access during your lifetime by borrowing against it, using it as collateral, withdrawing it, or more
• Dividends (participating policies only) – Annual dividend payments can be used to reinvest, withdraw, buy more insurance, or more
• No market volatility – The investment component is managed by the insurance company and it does not fluctuate with the market
• Guaranteed death benefit – Life insurance will pay out when you pass away no matter what
• Stable, growing death benefit – Your death benefit or coverage amount can grow over time with cash value or dividends
• Level premiums – The amount you pay will stay the same for the duration of the entire life insurance policy
• Limited pay options – Your policy can be paid off in a short time frame so you don’t have to worry about it later

Disadvantages of whole life insurance

The disadvantages of whole life policies are they are expensive and have limited flexibility in choosing the coverage period.

• Premiums can be expensive – Whole life policies can cost more than other types of life insurance
• You can’t choose a coverage period – You cannot select coverage for just a set period; it can only last forever
• Investment potential may not be as large as with other investments – Growth from a portfolio managed by the insurer will be moderate
• Policy structure can be complex – Whole life policies involve cash value accumulation and annual dividends, which can be challenging to grasp at first
• Limited flexibility – Once set, premiums and coverage amounts are often fixed

Cost of whole life insurance in Canada

The cost of whole life insurance ranges between $40 and $450, depending on personal factors like your age, sex, and health, and also on your policy’s details. Check the chart below for some sample quotes.

Whole Life Insurance Quotes in Canada (2024)

*Quotes based on $500k in coverage on a life-pay plan. Quotes based on average prices from leading insurance companies in Canada.

Is whole life insurance tax deductible?

While premiums paid for personal whole life insurance aren’t tax deductible, the policy offers several tax advantages, such as:

• Tax-deferred cash value growth: Whole life policies entail a cash value component that grows on a tax-deferred basis. That means you won’t incur taxes on the cash value growth until you withdraw it
• Tax-free death benefit: The death benefit paid to beneficiaries isn’t taxable
• Tax-free loans against cash value: If you borrow against your whole life policy’s cash value, the loan amount isn’t subject to taxes
• Tax-free interest-earning deposits: If you choose to receive your annual dividends in an interest-earning deposit, they remain tax-free unless withdrawn

How many years do you pay on a whole life policy?

The number of years you pay for a whole life insurance policy depends on the payment structure chosen at the time of purchase. Typically, whole life policies offer lifetime payments, limited payments, or single-premium policies.

1. Lifetime payments: You pay premiums throughout your entire life to keep the policy active. This option spreads the cost over time, resulting in lower annual premiums
2. Limited payment policies: You pay premiums for a set number of years, such as 10, 20, or 30 years, or until a specific age (like 65). After this period, the policy is fully paid, but coverage continues for life
3. Single premium: You make a one-time lump sum payment upfront, and the policy remains active for your lifetime without any further premiums

Do you get your money back at the end of a whole life insurance? 

No, you don’t get your premiums back at the end of a whole life insurance. Instead, you get a cash surrender value that depends on the total cash value minus any applicable charges that the insurer may levy.  

If your policy has a cash value of $50,000 and has accumulated $5,000 in dividends, but has $2,000 as surrender charges, your cash surrender value would be $53,000. This is calculated in the following way:

$50,000 + $5,000 – $2,000 = $53,000.

The cash value can be withdrawn or used as collateral for a loan. The death benefit is paid to beneficiaries upon your passing provided the policy remains active.

Does your money grow in whole life insurance?

Yes, your money grows in a whole life insurance policy through its cash value component. In Canada, whole life insurance not only provides lifelong protection but also builds cash value over time.

A portion of your premiums is allocated to this cash value, which grows at a guaranteed rate, often supplemented by dividends if you have a participating policy.

The cash value can serve as a valuable financial resource—you can borrow against it, use it for future premiums, or even access it for retirement or other expenses.

This growth is tax-advantaged, meaning you won’t pay taxes on the cash value growth as long as it remains within the policy. Whole life insurance offers both security and a way to build wealth over time, making it a popular choice for Canadians seeking long-term financial planning.

Can you cash out life insurance before death?

Yes, you can cash out life insurance before death if the policy has a cash value component. You can do so through a policy loan, partial withdrawal, or complete policy surrender.

• Policy loan: Borrow against the cash value, usually at a competitive interest rate
• Partial withdrawal: Take out part of the cash value without cancelling the policy
• Surrender: Cancel the policy and receive the full cash value minus fees

How much whole life insurance should I buy?

Choosing the right amount of whole life insurance depends on your financial goals and the needs of your loved ones. While whole life insurance offers lifelong coverage and cash value growth, it’s essential to determine how much coverage will adequately protect your family.

Two common strategies to help you decide are the ‘Ten times salary’ and the ‘Years to retirement’ rules.

The ‘Ten Times Salary’ Rule: This rule suggests buying a policy with a death benefit equal to ten times your annual salary. For example, if you earn $80,000 per year, you would aim for a policy with an $800,000 death benefit. This method ensures that your family can maintain their current lifestyle, cover debts, and manage expenses in the event of your passing. It’s a straightforward approach that offers a solid financial cushion.

The ‘Years to Retirement’ Rule: This strategy focuses on covering your income until retirement. Multiply your annual income by the number of years left until you retire. If you earn $80,000 annually and plan to retire in 20 years, you’d need $1.6 million in coverage. This method ensures that your family can replace your income until you’re no longer working.

What are the payment options for whole life policies?

Whole life insurance offers several flexible payment options to fit different financial needs. You can opt for lifetime payments, where premiums are spread across your entire life, keeping the annual cost lower.

Alternatively, limited payment plans allow you to pay off the policy within a set timeframe, such as 10, 20, or 30 years, or by a specific age like 65. For those looking for convenience, a single premium option is available, where a lump sum is paid upfront, securing lifetime coverage without any further payments.

Children’s whole life insurance

Whole life insurance for children provides lifelong protection with added financial benefits such as growing cash value over time. Here’s why whole life insurance for children can be a smart choice:

Cost-effective payments: Premiums for children’s whole life policies are generally lower, making it an affordable way to secure coverage for life. Since rates are locked in early, you avoid higher costs later

Guaranteed lifetime coverage: Once a policy is in place, the child is covered for life, regardless of future health changes. As long as premiums are paid, the policy cannot be canceled by the insurer.

Securing insurability: Buying insurance early ensures that the child has coverage even if they develop health issues later. This helps avoid challenges in obtaining insurance as an adult

Cash value that builds over time: Children’s whole life policies build cash value over time, offering a financial asset they can access later for education, a home, or other needs. The cash value grows tax-deferred, adding long-term benefits

Case study: A whole life insurance example

Let’s look at how whole life coverage works in a case study. In this example we’ll look at John, a 30-year-old Canadian who’s thinking about estate planning. He wants a lifetime insurance policy so he can leave something behind for his family after he passes away.

The chart below shows his projected cash value over time.

Age: 30

Gender: Male

Policy type: Whole life (non-par)

Death benefit: $250,000

Annual premiums: $1,565

Payment type: Life pay (premiums paid every year for entire life)

*Figures from an insurance illustration for a Desjardins non-participating whole life insurance policy purchased through PolicyAdvisor.com for a 30-year-old male in normal health.

Remember, John can use the cash value from his policy to build up his savings while still making sure his family would have enough money to carry on when he’s no longer around.

Can you borrow from whole life insurance?

Yes, you can borrow against the cash value of a whole life policy. This is called a policy loan and comes with several benefits like a no credit check and flexible repayment.

• No credit check: The loan is secured by your cash value
• Flexible repayment: You can choose when and how to repay the loan. However, if the loan is not repaid, it will reduce the death benefit. Interest also accrues on the borrowed amount
• Tax-free loan: A whole life policy loan remains tax-free as long as you do not exceed the amount you have paid in premiums

How to find the right whole life insurance policy?

Choosing the right whole life insurance policy requires careful consideration of several factors to ensure it aligns with your financial goals. Here’s a step-by-step guide to help you make an informed decision:

Choose the amount of coverage you need: Determine how much coverage will adequately protect your family. Consider factors like income replacement, debt, future expenses, and long-term financial goals

Examine riders: Riders are optional add-ons that enhance your policy. Popular options include critical illness coverage, waiver of premium, and accelerated death benefits. Assess which riders suit your needs

Look at the rate of return on cash value: Whole life policies build cash value over time. Evaluate the guaranteed rate of return and any potential dividends if you’re considering a participating policy

Be aware of surrender charges
If you cancel your policy early, surrender charges may apply. Understand these fees and how long they last to avoid surprises

Understand the different approval processes: Some policies require a medical exam, while others offer simplified or guaranteed issue options. Choose the process that best suits your health status and preferences

Check the insurer’s financial strength: A financially strong insurer is more likely to meet its long-term obligations. Review ratings from agencies like AM Best or Moody’s to gauge stability

Speak with our advisors: Our experienced advisors help you compare life insurance quotes from 30+ top insurers across Canada so you can choose a plan that best meets your needs

What other types of life insurance can I get in Canada?

If you’re looking for alternatives to whole life insurance, these are the other types of life insurance that you can get in Canada, such as term life insurance, term-to-100 insurance, universal life insurance, funeral insurance, and no-medical life insurance.

• Term life insurance
  A type of life insurance that lasts for a certain number of years, called a term. Usually inexpensive and great for short-term needs.
• Term-to-100 life insurance
  A type of life insurance policy that covers you for your entire life, but does not have a cash value or investment component like whole life does.
• Universal life insurance
  A type of permanent life insurance that gives the policyholder more control over the investment part of the policy.
• Funeral insurance
  A type of permanent life insurance that is designed specifically to cover end-of-life expenses. Also called Final Expense Insurance.
• No-medical life insurance
  A type of insurance coverage that does not require a medical exam, and can ask just a few or no health questions at all. Usually gives lifelong coverage but comes with a lot of downsides.

Difference between universal and whole life insurance?

Universal and Whole are both types of permanent life policy. But one of the main differences between a universal policy and a whole life policy is that universal gives you more control over your investments. This means it has greater growth potential, but it’s also more risky.

What age to get whole life insurance?

Although there is no ideal age to get a whole life insurance, the sooner you buy one, the better it will be for you. The youngest age limit to get life insurance in Canada is 18 years. Starting early on whole life insurance can have certain benefits such as: 

• Lower premiums: Premiums are significantly cheaper when you’re young and healthy
• Guaranteed coverage: Secures lifelong coverage, even if health conditions develop later
• Builds cash value early: More time for your policy to accumulate cash value, creating a financial safety net
• Long-term savings: Spread costs over a longer period, making it more affordable
• Future financial security: Provides stability for dependents and can be used for estate planning or retirement

Is whole life insurance a good investment?

We do not recommend buying life insurance exclusively as an investment strategy. Its purpose is to provide lifelong protection and financial security your family can rely on, not to provide capital gains.

The average rate of returns for whole life insurance varies, but is usually around 2-4% per year. This is not bad. But, if you’re only looking for an investment vehicle to generate high returns in a short amount of time, you would be better off with other options.

Should I buy whole life insurance or put my money into savings?

If you’re wondering whether you should buy whole life insurance or put the money into savings, a whole life policy is a much safer bet. Here’s why:

• Unexpected emergencies can arise and cause you to dip into savings
• The death benefit payout your family receives is usually far greater than you would be able to save and far greater than you pay in premiums in that same amount of time
• There are added tax advantages because the death benefit is paid out tax-free, so your family gets to hold onto more of the money

What happens if I surrender my whole insurance policy?

You can surrender your policy by ending it at any time. In that case you would get the cash surrender value and no longer have coverage. You may have some options to change your coverage into a policy with a lower death benefit, or to a term life policy.

But it depends on your provider — you should ask your insurance advisor about your options.

How soon can I cash out my whole life insurance policy?

It depends on your provider. Most Canadian companies will let you access your policy’s cash value on the anniversary after 5 or more years. This is whether you want to withdraw it, borrow against it, or access it any other way.

But you may want to wait. The longer you let whole life insurance cash value accumulate, the bigger the amount you can use and the more benefit you can have.

How much can I borrow from a whole life policy?

You can normally borrow up to 90% of your policy’s cash value if you want to take out a policy loan directly from your insurance provider. If you want to borrow from a bank or lender and just use your policy as loan collateral, you can borrow up to 100% of the premiums you paid.

We’ll help you find the best whole life insurance policy!

If you’re looking for the best whole life insurance policy, speak to a PolicyAdvisor expert who will help you compare and choose the best plan based on your requirements and budget.

With PolicyAdvisor, you also get free instant quotes, the lowest rates across the market, and lifetime after-sales support. Schedule a free consultation with one of our licensed advisors today!

Frequently asked questions

How can I find cheap whole life insurance quotes in Canada?

Find the cheapest whole life insurance quotes online using our free quoting tool. Our platform scans the market in seconds to show you your best life insurance match instantly.

You can also check out our listing of current life insurance promotions in Canada. Or book a free consultation call with one of our licensed advisors.

How long does it take to build cash value?

It usually takes years to build up a substantial amount of cash value — anywhere from 10 years or more. You can also help speed things up by paying more into the policy.

Alternatively, some policies are made to help you build cash value as quickly as possible. UV Insurance Company is a great example of this with their Whole Life High Values permanent policy.

Can I get life insurance riders with whole life insurance?

Yes, you can enhance a whole life insurance policy by adding riders, depending on the options your insurance provider offers. Commonly available riders include a term rider, child rider, accidental death and dismemberment benefit rider, guaranteed insurability rider, return of premiums rider, critical illness rider, and disability waiver of premiums rider, among others.

Do I need a medical test to get a whole insurance policy?

It depends, but a medical exam is not needed in many cases. In general, if you’re a Canadian citizen or resident in good health and you’re getting under $500K in coverage, you will probably not be asked to take a medical exam.

Are whole life insurance policies taxable?

The relationship between taxes and whole life insurance can be viewed from various perspectives. Generally, certain aspects of whole life insurance are non-taxable, such as death benefit payouts, dividends if reinvested in the policy, policy loan proceeds below the adjusted cost basis, and third-party collateral loans using the cash value.

On the other hand, some elements are taxable, including cash dividends, policy withdrawals exceeding the adjusted cost basis, and policy loans that go beyond the adjusted cost basis. It is essential to consult a licensed insurance advisor or tax professional to understand how these rules pertain to your specific situation.

Can I use a whole life policy to “be my own bank”?

No, you cannot use your insurance policy to become your own bank.

You may have seen this claim on social media platforms like TikTok, where some people claim you can use whole life insurance for “infinite banking.” But if something seems too good to be true, it usually is.

The concept of “infinite banking” does exist, but it’s very complicated. And it doesn’t work the way some catchy videos suggest.

Can I convert my term life insurance policy to a whole life policy in Canada?

Yes, many Canadian term life insurance policies offer a conversion option, allowing you to switch to whole life insurance without a medical exam. This is beneficial if you want permanent coverage or have developed health issues that might make it difficult to qualify for a new policy. Converting ensures lifelong protection and the added benefit of cash value growth. However, premiums will likely be higher after conversion.

What happens if I miss a premium payment on my whole life insurance policy?

Missing a premium payment on your whole life policy can have varying consequences depending on the policy’s terms. Many policies include a grace period, typically 30 days, during which coverage remains active. If you fail to pay within this window, the insurer may use the policy’s cash value to cover premiums. If no cash value is available, the policy may lapse, leading to a loss of coverage. Some policies offer options like automatic premium loans to prevent lapses.

How does whole life insurance affect my eligibility for government benefits in Canada?

The cash value of a whole life insurance policy can affect eligibility for certain government benefits. For programs like Old Age Security (OAS) and the Guaranteed Income Supplement (GIS), only income is assessed, not assets. However, if you withdraw cash from your policy, it may count as income, potentially reducing your GIS benefits. Proper planning can help minimize any impact on government assistance.

Can I use my whole life insurance policy as collateral for a loan in Canada?

Yes, you can use your whole life insurance policy as collateral for a loan, thanks to its cash value component. Many Canadian lenders accept this arrangement, allowing you to borrow against your policy. Alternatively, you can take a policy loan directly from the insurer. In both cases, it’s important to maintain the policy and repay the loan to avoid reducing the death benefit or risking a policy lapse.

Most people assume that life insurance for seniors is either not worth it or impossible to get approved – but that’s not true! Even those aged 60 or over can take comfort in knowing they can still get life insurance coverage.

Read on to find out what your coverage options are and how you can secure the protection you need in retirement age.

Which are the best life insurance companies for seniors in Canada?

Some of the best life insurance companies for seniors in Canada include Canada Life, Wawanesa, Industrial Alliance (iA), and Canada Protection Plan. Take a deep dive into their offerings and ratings:

Why do seniors need life insurance?

Seniors need life insurance to give their family financial security and peace of mind, especially as they approach retirement. Some major reasons seniors buy life insurance include paying off mortgage, and outstanding debts, providing for the surviving spouse and dependents, and leaving behind a legacy.

• To pay off the mortgage: Not every Canadian has paid off their mortgage by the time they’ve reached their 50s or 60s. A death benefit payout from the insurance policy would enable surviving loved ones to handle it
• To pay off any outstanding debts: Similarly, beneficiaries can use the payment to cover any other leftover debt such as credit card bills, personal or business loans, and more
• To cover funeral arrangement expenses: Life insurance can also give surviving loved ones the space to grieve without worrying about how they can afford to pay for burial costs
• To cover medical debt: Some life policies come with benefits you can use now, to help pay for costs like long-term care and prescriptions, or to give an advance on the payout in the event of a terminal illness
• To provide for a surviving spouse: Life insurance can help a surviving spouse maintain their same standard of living and keep up with daily expenses and bills
• To provide for dependents: Seniors who take care of family members with special needs can make sure the money from their life insurance is used to keep providing for those loved ones
• To supplement retirement savings: Many older Canadians use the money they get from a whole life policy’s cash value to supplement their pension and help give them some extra cash
• To leave an inheritance for children and grandchildren: Life insurance is a fantastic estate planning tool that helps seniors leave money behind for children, grandchildren, and other family members
• To leave a legacy for a charity of choice: Similarly, life coverage gives seniors a way to leave a gift behind for a charity or cause they care deeply about
• To ensure protection: In Canada, there is no government life insurance for seniors. Any older people who want this kind of protection must buy it themselves

What are the benefits of Canadian life insurance for seniors?

Life insurance can give seniors:

• Peace of mind
• Financial protection
• Access to extra savings through cash value
• A reliable way to transfer assets and cover end-of-life expenses

What types of life insurance can seniors get in Canada?

Depending on their individual health and coverage needs, seniors many choose from traditionally underwritten life insurance or no-medical life insurance policies. Take a look at these options in detail:

1. Traditionally underwritten life insurance

Traditional policies are fully underwritten, which means applicants have to answer a lot of questions about their health history. They may also have to take a medical exam. Traditionally underwritten life insurance comes in two types:

• Term life insurance
• Whole life insurance

Term life insurance for seniors

Term life insurance policies cover you for a specific length of time, called a term. It pays a tax-free, lump-sum payment called a death benefit to your beneficiaries if you die within the term.

A healthy 60-year-old who needs life insurance for a temporary need like paying off their mortgage will find that a term policy is the best choice. It’s the most affordable type of policy and can take care of their needs.

Whole life insurance for seniors

Whole life insurance is a type of permanent insurance that covers you for your entire life. It’s best for final expenses like funeral costs, outstanding debts, and end-of-life medical costs. It also has the living benefit of a cash value component. This cash value may be accessed during your lifetime either by withdrawing or borrowing against it.

Whole life policies are generally more expensive than term. It’s also just one type of permanent insurance policy, aside from universal life insurance and Term-to-100.

2. No-medical life insurance

No medical life policies have very few medical questions and do not require a medical exam. No medical insurance has two types: simplified issue life insurance, and guaranteed issue life insurance. They are best for people who: 

• Have an underlying health condition or medical issue
• Have hobbies or pastimes that are considered dangerous (like skydiving)
• Need to get coverage quickly

Simplified life insurance for seniors

Simplified issue life insurance asks you a few questions about your medical history when you apply, instead of a full exam. But they tend to be more expensive and usually have limitations like:

• A lower death benefit
• Can have a waiting period of 1-2 years before coverage starts

Guaranteed life insurance for seniors

Guaranteed life insurance has NO health questions at all, so you’re guaranteed to get approved. But it comes with a lot of limitations, like: 

• Maximum death benefit amount of $50,000
• Almost always has a waiting period of 1-2 years before coverage starts

This is a last-resort insurance plan. It’s there for those who aren’t able to get traditional life insurance policies or simplified issue policies.

Learn more about the different types of life insurance in Canada.

Which is better for seniors, whole life or term life insurance? 

Both term and whole life insurance offer distinct advantages for seniors. Term life insurance provides affordable coverage for final expenses and outstanding debts. However, premiums increase significantly after age 60 and can be difficult to sustain.

Whole life insurance while initially more expensive, can help secure your legacy by covering estate taxes and leaving an inheritance for your loved ones. That said, it takes time for a whole life policy to accumulate sufficient value, making it more suitable for seniors who either own businesses or are looking to protect their estate.

What riders and additional benefits are available on life insurance for seniors?

Life insurance for seniors offers several riders or add-ons that can enhance its coverage. Some of them are:

• Accidental death benefit: This add-on multiplies the basic coverage amount if the insured dies in an accident
• Terminal illness benefit: This benefit allows the insured to access 50-75% of their death benefit if they’re diagnosed with a terminal illness. Canada Protection Plan’s life insurance for seniors already includes this benefit to help the insured cover their expenses during a critical period
• Transportation benefit: Also included in Canada Protection Plan’s life insurance for seniors, this rider covers costs for transporting the insured’s remains over 200 kilometers from home, reducing family stress during a difficult period
• Disability credit insurance: Offered by Industrial Alliance (iA), this add-on covers the insured’s financial obligations, like loan payments, if they become disabled
• Waiver of premiums: This add-on cancels future premium payments if the insured becomes completely disabled before the age of 60 and the disability lasts longer than 6 months

Note that the availability of these options depends on your policy type and insurer — which is why, we recommend you speak to a licensed insurance advisor to understand your coverage options better.

How much does life insurance for elderly people in Canada cost?

It depends on factors like age, type of policy, and more. Life insurance for seniors over 65 can be anywhere from $55 to over $100 a month for term life insurance. Or, life insurance for seniors 65 and over can be around $100 to start.

For seniors over 50

For those in their 50s, life insurance tends to be more affordable and accessible, ranging between $50 and $170 per month. Policies can be structured to offer a balance of coverage and cost, with the potential for both term and whole life insurance options.

For seniors over 60

Seniors over 60 see an increase in premiums due to age-related health risks. Policy prices can range between $50 to $240 per month. There is a wider range of policy options available, including term, whole life, and term-to-100 policies.

For seniors over 70

For those in their 70s, premiums are higher, reflecting increased health risks. Life insurance policies can range between $90 to $320 per month for individuals in their 70s. Policies like term-to-100 are designed to provide lifetime coverage, albeit at a higher cost.

For seniors over 80

Life insurance options for those over 80 are limited and come with high premiums, typically ranging between $200 to $450, due to the higher mortality risk. Policies mainly focus on final expense coverage rather than extensive financial planning.

*Quote for $100,000 in life insurance coverage for a non-smoking female resident of Ontario in good health. 20-year coverage not available past age 65.

What affects the cost of life insurance for older adults?

For seniors, just like for everyone, the cost of life insurance premiums depends on factors such as their age, health history, smoking status, sex and the type of policy that they have purchased.

Health is a major contributing factor for seniors especially, just because our health generally declines the older we get. Age and health are two of the biggest factors that will affect your cost, and whether you can get coverage at all as a senior.

What is the most affordable type of Canadian life insurance for seniors?

Term life insurance is the cheapest type of life insurance for seniors and for Canadians in general. But be aware that seniors have limited options for term insurance, depending on your age. And, depending on your needs, it may not be the best option for you.

Is senior life insurance in Canada worth it?

Yes. Life insurance for seniors provides financial protection for your loved ones by covering your outstanding debts, mortgages, and final expenses like funeral costs after you pass away. 

In addition to this, senior life insurance offers several benefits, such as:

• Estate protection: Whole life insurance prevents your legacy assets from being sold off prematurely. With a guaranteed death benefit, it ensures that your beneficiaries have the financial assistance they need to cover estate taxes
• Leaving an inheritance: Life insurance offers a tax-efficient way to pass down wealth to children and grandchildren. For example, you can allocate funds specifically for their education
• Supporting a cause: You can create a lasting impact by designating a portion of your life insurance benefit to charities you care about

When is it a good time to get seniors life insurance?

The best time to get life insurance for seniors is while you:

a) Still meet the age and health requirements: Leading insurers, such as Canada Life, offer coverage up to age 85. However, premiums increase with age, so the earlier you secure coverage, the better. Additionally, while many insurers do cover pre-existing conditions, applying for a policy when you’re in good health typically results in lower premiums and fewer restrictions

b) Have outstanding debts: If you have a mortgage, loans, or other debts that could burden your family after your passing, consider getting coverage sooner rather than later

c) Want to plan ahead: If you wish to cover your funeral expenses or leave a legacy for your loved ones, you may want to lock in coverage while you still have more options 

Is a senior’s life insurance policy a costly mistake?

No. Let’s look at the actual costs: term life insurance for people in their 50s typically costs $35/month for a 10-year term and $61/month for a 20-year term. Permanent plans for the same age group cost around $111/month.

When you consider how the death benefit can be used—paying off debts, covering final expenses, and protecting your estate—life insurance becomes a valuable investment rather than a costly mistake.

How to buy life insurance for seniors in Canada?

Seniors can easily buy life insurance in Canada once they have figured out their needs,. You can also look at policy marketplaces and apply via your phone to get the best rates. For a more customized experience, you can connect with our experts at PolicyAdvisor.

1. Figure out your needs

Start by thinking through your reason for buying life insurance and what you need to secure. This will help you determine what kind of coverage you need. 

If you’re not sure, try out our free life insurance calculator. It will help you decide. You can also contact one of our licensed insurance advisors for one-on-one help.

2. Get free life insurance quotes for seniors from PolicyAdvisor

Once you’ve decided what kind of policy and how much coverage you need, you can compare the lowest insurance quotes for seniors online. Our quoting tool searches the Canadian insurance market for you in seconds.

This lets you easily compare quotes from more than 30 of the best life insurance companies for seniors in seconds.

3. Apply online or over the phone

Select the quote you want and submit your application online by answering some personal questions. Or, contact us and let our agents go through the process with you, saving you time and money.

Frequently asked questions

What is the best life insurance for older people in Canada?

The best type of life insurance for seniors depends on their financial goals and obligations. Here’s what each type has to offer:

• Term life insurance: While it covers you for a limited period (typically 10, 20, or 30 years), term life insurance helps you pay off debts and cover funeral expenses. It also allows you to tailor your coverage (specifically policy duration) to meet specific financial protection goals

• Whole life insurance: This type of policy protects you for your entire life while building cash value you can access during your lifetime. For seniors, it’s particularly valuable for estate protection, preserving an inheritance, leaving a legacy, and covering final expenses
• Guaranteed life insurance: Designed for those who may not qualify for traditional life insurance, this option requires no medical underwriting. It ensures financial protection for your family and covers outstanding debts upon your passing

To ensure you select the right coverage for you and your loved ones, we recommend you book a free consultation with our licensed advisors who can guide you through different options.

Should a 70 year old have life insurance? 

Yes. A 70-year-old with outstanding financial obligations should strongly consider life insurance. Not only will it help protect their loved ones from any financial burdens after their passing, but also help cover their final expenses and leave a legacy for family members or charitable causes.

How much life insurance do seniors need?

Normally, experts say you should get 10-15x your annual income in coverage. But Canadian life insurance for seniors is different — many are already retired and only want to help pay for final expenses or leave inheritance for their family.

How do pre-existing conditions affect life insurance for older people?

Pre-existing conditions affect:

• What kind of life insurance you can get
• Whether you will be approved for coverage
• How much your life insurance rates will be

Many seniors in Canada already have health issues like cancer, high blood pressure, diabetes, and more. These are all considered pre-existing health issues that will affect their insurance options.

But, there are still options for seniors with health issues to coverage through no-medical policies. Seniors can still get insurance coverage even if they have bad health and even without taking a medical exam.

Can seniors convert or renew their life insurance policy?

While most term life policies can be renewed or converted into a permanent policy at the end of the term, not every senior may have these options. In general, most Canadian insurers will only let seniors renew or convert up until age 70 to 75.

What happens if my application is denied?

If your senior life insurance application is denied, you should contact our licensed insurance agents to help discuss how to move forward. We can help you take a look at why you may have been denied and see what the alternative options are.

Frequently asked questions

How can I use the cash value of my whole life insurance policy to fund my retirement?

The cash value of your whole life policy can supplement your retirement income and help meet immediate financial goals. It can be accessed through loans or withdrawals to maintain your lifestyle post retirement, travel, and more. 

What are the best strategies to create generational wealth with whole life insurance?

Whole life insurance can create generational wealth by providing a guaranteed, tax-free death benefit to your heirs. You can also use it to fund trusts or cover estate taxes, ensuring your assets are passed on intact. Additionally, reinvesting dividends and growing the cash value increases the policy’s long-term financial benefits, securing wealth for future generations.

How does whole life insurance compare to other investment options for wealth building?

Whole life insurance offers guaranteed returns, tax advantages, and lifelong coverage, making it a low-risk, stable component of a diversified financial plan. Unlike stocks or real estate, it is not subject to market volatility and provides a predictable way to build wealth.

Can I use whole life insurance to fund my children’s education expenses?

Yes, the cash value of a whole life insurance policy can be accessed to fund education expenses. You can withdraw or borrow against the cash value to pay for tuition, books, or other costs.

What are the tax implications of borrowing against the cash value of a whole life insurance policy?

Borrowing against the cash value is generally tax-free as long as the policy remains in force. However, if the policy lapses or is surrendered, the loan amount exceeding the adjusted cost basis may become taxable as income. 

Other ways to leverage your life insurance cash value

Other than using your cash value as collateral on a bank loan, you can leverage your life insurance policy’s cash value in the following ways:

1. Get a policy loan
2. Withdraw your policy’s cash surrender value

1. Get a policy loan

It’s possible to take out a loan on life insurance policies through something called a policy loan. This lets you borrow money from your life insurance policy, kind of like using your policy as collateral for a bank loan. But the difference is that, with this type of collateral loan, you get the money from your insurance company instead of from the bank.

You can repay this loan, so your death benefit doesn’t take a hit. This is a great option if you need cash, but wouldn’t be able to get a loan from the bank due to low credit score. 

How much can you borrow from your life insurance policy?

The amount you can borrow from life insurance as a policy loan will depend on your policy’s cash value and your insurance provider’s rules. Some let you borrow up to 90% or even 95% of your cash value amount. Meanwhile, if you use it as collateral for a bank loan, you can only get 50-90% of the cash value.

2. Withdraw your cash value

Some policies also allow you to withdraw some or all of your cash value, for a fee. You might use this option if you need to make a large purchase and are low on funds.

There are generally penalties for early withdrawal of the cash, also referred to as the surrender fees. Your policy’s cash value minus the surrender fees is what your “cash surrender value” will be. In some cases, this penalty can be a few hundred dollars, but in other cases, it may be a percentage based on the cash value accumulated.

With policy withdrawals, the loan is final and cannot be repaid—whatever you take will reduce your death benefit. This can be an option if you’re short on cash, but you run the risk of wiping out your death benefit altogether depending on the withdrawal.

Life insurance policy loans vs collateral loans

The main difference between a life insurance policy loan and using your life insurance as loan collateral is who you’re getting the loan from.

Policy loans – The money comes from your insurance company. You’re borrowing the cash value of your life insurance policy.

Collateral loans – The money comes from the bank. You’re borrowing money from the bank and using the cash value as a “just-in-case” collateral promise.

Both options use your death benefit as a guarantee that the lender will get their money back.

Deciding which option is best for you will depend on your specific financial circumstances. While collateral loans are more secure, you may not be able to get a bank loan at all due to your credit score or other factors. In that case, a direct life insurance loan may be a better option.

Can I take money out of my life insurance as a loan?

Yes, you can take money out of your life insurance as a policy loan, but only if you have a permanent life insurance policy with a cash value component, such as whole life or universal life insurance. 

You can borrow against this cash value without needing lender approval, and the loan is not taxable as long as the policy remains active. However, unpaid loans reduce the death benefit, and interest accrues on the borrowed amount.

When you borrow against a life insurance policy, is the loan taxed?

No. If you use your life insurance policy as loan collateral, the loan amount is tax free. However, if you take a policy withdrawal or policy loan (different from loan collateral), it may be taxed.

When determining if loans and withdrawals will be taxed, regulatory bodies look at the policy’s adjusted cost base (ACB). In the case of the life insurance policy, the ACB is what the policyholder pays for above the base cost of the death benefit coverage. This could include policy administration fees or other costs associated with the policy.

For example, if someone had a whole life insurance policy, their ACB may be calculated as follows:

Policy type — Whole life insurance
Annual premium — $5,000
Cost to cover death benefit — $1,500
Cash value investment — $3,000
Policy maintenance fee — $500
Policy ACB — $5,000 minus $1,500 = $3,500

Then, using the ACB, they determine whether the loan or withdrawal is taxable.

Difference between policy withdrawals, policy loans and policy collaterals

How can I use life insurance cash value to pay off debts?

If you have a permanent life insurance policy like whole life or universal life, you can leverage its cash value to manage and pay off debts in several ways:

• Take a policy loan – You can borrow against your policy’s cash value to pay off high-interest debts. Since this is a loan from your insurer, you don’t need a credit check, and the loan is tax-free
• Make a partial withdrawal – Many policies allow you to withdraw a portion of your cash value to cover outstanding debts. Unlike a loan, you don’t have to repay this amount, but it permanently reduces your policy’s cash value and may impact future benefits 
• Surrender your policy – If you no longer need life insurance, you can fully cash out your policy by surrendering it. This provides a lump sum to pay off debts, but it also means you’ll lose coverage

How to set up your life insurance as loan collateral?

If you’re looking to draw a loan using your life insurance policy as collateral, seeking the help of a professional can make your work easier. PolicyAdvisor’s licensed insurance experts can really make this journey easy for you. Our advisors will help you choose the life insurance products that are most suitable for collateral for loans, and how to maximize the benefits of using life insurance in this capacity. 

Schedule a consultation with us below to explore how you can structure your life insurance to serve as effective collateral for your borrowing needs.

Frequently asked questions

How much can you borrow against life insurance in Canada?

Generally, banks will let you borrow 50 to 90 percent of your policy’s cash value when you use it as collateral. The percentage you can borrow depends on factors like your credit score and the growth rate of your cash value over time. 

For example, you may only be able to get a lower percentage if:

• You have bad credit — If you have poor credit history, a lender may be wary of lending your full cash value amount
• Your cash value grows too slowly — If your cash value growth can’t keep up with the bank’s loan interest rates, the lender may be more hesitant to approve you for the full amount

If you’re borrowing from your life insurance directly, you can generally borrow as much as 95% of your cash value.

What if you can’t pay your bank loan back?

If you find yourself unable to pay your lender back based on the terms you agreed to, they may:

• Cash in the insurance policy for the cash surrender value — Your policy will be cancelled and the bank will get your policy’s cash surrender value as loan payment
• Use your death benefit as repayment for the loan after your death — If you pass away without repaying the loan, the bank will receive the policy’s death benefit as loan payment. They may take a portion of that money or the entire amount, depending on what was owed

Your lender will tell you which option they’ll take in your loan collateral agreement.

Which lenders accept life insurance as collateral?

Most major banks, credit unions, and financial institutions will accept life insurance with a cash value as loan collateral. That includes banks like:

• RBC
• Scotia Bank
• TD Bank
• And many others

Each lender will have specific requirements about the types of policies they will accept as collateral and how much cash value they require to secure the loan.