Why is whole life insurance more expensive than term life insurance?

Whole life insurance policy costs more because it provides lifelong coverage, guaranteed cash value accumulation, and a guaranteed death benefit. Participating policies may also be eligible to earn annual dividends, adding further long-term value. Term life insurance only covers you for a fixed period and does not build cash value, making it a more affordable option.

How does adding riders affect whole life insurance premiums?

Adding optional riders, such as critical illness coverage, accidental death benefits, or disability waiver of premium, increases whole life insurance premiums. Riders provide additional benefits tailored to individual needs but come at an added cost. For example, a critical illness rider might add 10-20% to the base premium.

Can I lower my whole life insurance premiums after buying a policy?

In most cases, your premiums are fixed when you purchase the policy and cannot be reduced later. However, you may be able to lower your overall costs by choosing a different payment option, reducing your coverage amount, or selecting a non-participating policy.

Can I switch from term life insurance to whole life insurance?

Yes, many term life insurance policies include a conversion option that allows you to convert some or all of your coverage to whole life insurance without completing a new medical exam. The conversion must usually be completed before a specified age or policy anniversary, depending on your insurer.

How much does a $250,000 whole life insurance policy cost?

The cost of a $250,000 whole life insurance policy ranges from $132 to $914. The actual costs may vary based on your age, gender, health, smoking status, policy type, and insurer. In general, premiums are higher for $250,000 than for $100,000 in coverage.

Which premium payment option has the lowest monthly cost?

Life Pay typically offers the lowest monthly premiums because the cost of the policy is spread over the longest payment period. In contrast, 20 Pay policies have higher monthly premiums but are fully paid up sooner.

How can I reduce the cost of whole life insurance?

You can lower your whole life insurance premiums by purchasing coverage at a younger age, choosing an appropriate coverage amount, maintaining good health, selecting a non-participating policy, opting for a longer premium payment period, and comparing quotes from multiple insurers.

How much is whole life insurance per month for a 20-pay policy with $100,000 in coverage?

The average whole life insurance cost for a male non-smoker seeking $100,000 in coverage for a 20-pay policy ranges from $70.74 to $319.41 per month. The cost of a 20-pay policy will be lower than a 10-pay policy as the premium is spread over a longer duration.

What is the cost of whole life insurance at age 65?

The cost of whole life insurance at age 65 for $100,000 in coverage with a 20-pay premium option costs approximately $345 to $446 per month, depending on gender and whether the policy is participating or non-participating. For a 65-year-old male, premiums range from $409.14 to $445.77 per month, while a female may pay $345.06 to $404.64 per month.

Best life insurance companies in Canada by category (2026)

The best life insurance company in Canada ultimately depends on what you are looking to achieve. While some insurers stand out for affordable term coverage, others are great for tax-advantaged wealth creation or simplified approvals for those with health concerns.

Based on our comprehensive review, here is how the top Canadian providers align with specific financial and lifestyle needs:

Best life insurance for term life insurance seekers

RBC Insurance, Canada Life, and iA Financial are the top choices because they offer unparalleled term flexibility. Rather than forcing you into a standard 10- or 20-year policy, all three allow you to customize your policy length to the exact year (e.g., a 17-year term) to perfectly match a mortgage or loan amortization.

Best life insurance for whole life insurance buyers

Buyers looking for lifelong protection with strong cash value growth should consider Equitable Life, Sun Life, and Empire Life. Equitable Life leads the pack with a market-topping 6.40% dividend scale, while Empire Life’s unique “Side Account” offers unmatched premium flexibility for variable-income earners.

Best life insurance for no-medical coverage

Applicants who prefer simplified or guaranteed issue life insurance due to age or health issues can look to Assumption Life, Canada Protection Plan, or Industrial Alliance. These companies provide hassle-free applications with fast approval and minimal medical requirements.

Best life insurance for parents and homeowners

Families need flexible, multi-layered protection. Equitable Life stands out for its flat-fee child rider covering all future children, while Beneva includes a unique automatic 60-day Newborn Benefit at no extra cost. For homeowners, iA Financial offers a fully portable disability rider on decreasing term policies that stays with you even if you switch mortgage lenders.

Best life insurance for seniors

Older Canadians prioritize permanent coverage with simplified underwriting. Desjardins is a standout, offering guaranteed issue coverage specifically designed for seniors aged 50 to 75. Wawanesa is another excellent choice for budget-conscious seniors, as they price policies based on your actual chronological age rather than rounding up to your “nearest age.”

Best life insurance for business owners and self-employed individuals

Entrepreneurs require scalable coverage for business continuity. BMO Insurance is a top tier choice thanks to its Business Guaranteed Insurability Option, which lets owners increase coverage as their company’s valuation grows. Canada Life and Sun Life are equally strong, comfortably handling massive multi-million-dollar corporate cases.

Best life insurance for doctors and professionals

Medical and high-income professionals seek high-limit coverage with specialized underwriting. RBC Insurance and Canada Life cater to these needs with massive capacity (up to $25 million) and income-based underwriting, while Manulife’s early cash value Par policies provide an excellent vehicle for corporate wealth storage.

Best life insurance for smokers

If you smoke or use tobacco products, Foresters Financial is the premier choice thanks to its Quit Smoking Incentive Plan, which grants non-smoker rates for the first two years while you try to quit. Industrial Alliance (iA) and Canada Life also provide more forgiving requalification programs that reward lifestyle changes over time.

Best life insurance for applicants with pre-existing conditions

Applicants with chronic or past health issues benefit most from Canada Protection Plan, Desjardins, and Assumption Life. Desjardins is uniquely lenient through its “Harmony” underwriting for stable conditions like Type 2 diabetes, while CPP may provide coverage to individuals who have already declined elsewhere.

Best life insurance for children

For parents securing their child’s future insurability, Humania Assurance offers an exceptionally lenient child rider with zero medical questions asked. Foresters Financial adds incredible value through its Orphan Benefit (paying $900 monthly per child if both parents pass away), and Equitable Life provides strong permanent cash-value options for kids

How we rated the best life insurance companies

We ranked Canada’s major life insurers using a simple, transparent scoring system that reflects how real Canadians shop: lowest reliable price for common profiles, strong financial ratings, flexible products (term, whole, universal, riders), and a smooth quote-to-claim experience.

Our team checked thousands of sample quotes across multiple carriers, checked AM Best/DBRS/S&P ratings, reviewed product brochures and underwriting rules, and considered complaints and broker feedback. Each insurer received a 0 to 5 score based on five weighted factors (price 35%, financial strength 25%, products/features 20%, digital experience 10%, claims/service 10%), which we turned into the ranked table and “best for” badges you see above.

How to choose the best life insurance company in Canada?

While choosing a life insurance company, some of the factors that you should keep in mind are the underwriting, claims process, riders and optimizations, policy costs, and customer service. 

• Financial Strength: Look for strong credit ratings (A or higher from A.M. Best) and a high LICAT ratio (Life Insurance Capital Adequacy Test). A ratio of 130% or higher demonstrates exceptional capital depth to survive economic downturns.
• Underwriting Flexibility: Every insurer prices risk differently. If you have a pre-existing condition (like Type 2 diabetes), participate in high-risk hobbies, or want to skip the medical exam, prioritize companies that specialize in simplified issues or clinical underwriting.
• Premium Competitiveness: Don’t just compare the initial quote. Review the guaranteed renewal rates and look out for hidden annual policy fees, which drastically inflate the overall cost of smaller coverage amounts.
• Customization & Riders: Ensure the insurer offers the exact structure you need. Look for valuable built-in features or optional policy riders, such as the ability to customize your term to the exact year (e.g., a 17-year term to match a mortgage) or terminal illness advances.
• Claims & Accessibility: A policy is only as good as its payout process. Evaluate the insurer’s reputation for ease of claims, average processing times, and whether they offer a robust digital portal that allows you (and your beneficiaries) to navigate the policy smoothly.

How to get the best  life insurance in 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. 

Whole life insurance explained

Whole life insurance is a type of permanent life insurance that provides coverage for your entire life rather than a limited term. In exchange for regular premium payments, the insurer guarantees a generally tax-free death benefit (unless it exceeds the policy’s adjusted cost basis) to your beneficiaries when you pass away.

Unlike term life policies, whole life insurance also includes a guaranteed cash value component that accumulates over time. Depending on the policy you select, the plan may also earn annual dividends that can further supplement your death benefit and cash value. As a result, premiums are typically 7 to 10 times higher than those of comparable term life policies. 

For example, a healthy non-smoker 30-year-old parent may be able to purchase $100,000 in term life coverage for somewhere between $10 per month. The same amount of coverage could cost around $70 per month for whole life insurance. While whole life policy costs significantly more, the higher premiums reflect its lifelong coverage, guaranteed cash value, and potential dividend growth.

Key features of whole life insurance:

How does whole life insurance work in Canada?

Whole life insurance combines lifelong financial protection with a built-in savings component. As long as you continue paying your premiums, you remain covered for the entirety of your life. Additionally, a portion of your premiums contributes to your policy’s guaranteed cash value, which grows over time. 

Here’s how a whole life insurance policy usually works:

Step 1: Choosing the right coverage amount: Choose a coverage amount that would secure the financial future of your family and protect your loved ones from outstanding debts or other costs. Many applicants choose anywhere between 7 and 15 times their annual income

Step 2: Choose your policy type: Next, you will select the type of whole life insurance that best aligns with your financial goals.

Step 3: Complete your application and pay your premiums: Once you have chosen your coverage amount and payment period, you will need to complete your application and name the beneficiary. Most applicants choose their close relatives, such as their spouse, children, or parents, as the beneficiary. Additionally, they can choose one or more beneficiaries

Step 4: Your policy builds cash value: One of the defining features of whole life insurance is the cash value. Each premium payment contributes toward a guaranteed cash value that grows over time on a tax-advantaged basis. Additionally, if you choose a participating whole life policy, you may earn dividends based on how the insurer performs financially

Step 5: Your beneficiaries receive the death benefit: If you pass away while your policy is active, your beneficiaries submit a claim to the insurance company. Once the claim is approved, the insurer pays the death benefit as a tax-free lump sum

Types of whole life insurance in Canada

While whole life insurance provides permanent coverage to policyholders as long as premiums are paid, many insurers offer the policy in different structures to suit different financial goals. The most common options are participating and non-participating, and limited-pay whole life insurance.

Participating whole life insurance

Participating whole life insurance is one of the most popular permanent life insurance policies in Canada. Alongside guaranteed lifetime coverage and cash value growth, eligible policies may also receive annual dividends based on the insurer’s financial performance.

These dividends can be used to purchase additional paid-up insurance, increase the policy’s cash value, reduce future premiums, or even repay policy loans. While the dividends are not guaranteed, most major Canadian insurers have historically paid them. 

Best for: Participating whole life insurance is a good choice for those who are looking for long-term wealth accumulation and estate planning.

Non-participating whole life insurance

Non-participating whole life insurance provides guaranteed lifetime protection with fixed premiums and guaranteed cash value growth. However, unlike participating whole life policies, it does not pay dividends.

Since there is no dividend component, these policies are simpler and more predictable. The returns and death benefit are guaranteed when the policy is issued, providing greater certainty over the life of the policy. 

Best for: This policy is well-suited for those looking for seeking predictable lifelong coverage. 

Limited-pay whole life insurance 

Limited-pay whole life insurance policies allow you to complete all premium payments within a predetermined period while keeping coverage for life. Common payment schedules include:

• 10 Pay
• 20 Pay
• Pay to Age 65

Although the premiums are higher since they are paid in a shorter period, policyholders no longer need to make payments once the policy becomes fully paid up. As the premiums are paid, the cash value increases on a tax-deferred basis if the policy is “exempt” under the Income Tax Act.

Once enough cash value has accumulated, you can borrow or withdraw from it (subject to policy rules) for retirement income, emergencies, or other financial needs. However, this may reduce the death benefit and cash value.

Best for: Those who want lifelong coverage but prefer to finish paying premiums within a set period.

What is a children’s whole life insurance policy?

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 cancelled 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

Learn more about life insurance for children 

How much whole life insurance coverage do you need?

You generally need whole life insurance coverage that is 10 times your salary. Choosing the right amount of whole life insurance depends on your financial goals and the needs of your loved ones. While it 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 would need $1.6 million in coverage. This method ensures that your family can replace your income until you’re no longer working.

Using the DIME method to estimate whole life insurance

Another method of calculating how much coverage you need is to use the debt, income, mortgage, and education (DIME) method. It is a simple way to estimate how much term life insurance you may need by considering four key financial obligations your family could face.

Let’s assume Michael, a 45-year-old business owner, wants to ensure his family is financially secure while also leaving an inheritance.

Here’s a projection of whole life insurance coverage using the DIME method:

Based on the DIME method, Michael may consider approximately $2.6 million in life insurance coverage. However, because he also wants to leave an inheritance and reduce the tax burden on his estate, he may choose a higher coverage amount through a whole life insurance policy. 

While it is a handy index, your ideal coverage amount may differ based on factors such as savings, investments, and long-term financial goals.

Pros and cons of whole life insurance

How much does whole life insurance cost in Canada?

The cost of a whole life insurance policy ranges between $57 and $382. The premium depends on the policy type, coverage amount, and personal factors, such as gender, age, smoking status, and health. 

Cost of $100,000 whole life insurance policy:

*Illustrative monthly premiums for non-smoking males and females of various age ranges seeking a whole life insurance policy with $100,000 in coverage for a 20-pay premium option

How are whole life insurance premiums calculated?

Life insurance companies calculate your premium by assessing how likely you are to make a claim over the life of the policy. It is primarily based on your age, smoking status, health conditions, coverage amount, and other related factors.

Personal factors:

• Age: Younger applicants generally qualify for lower premiums. A 30-year-old male non-smoker pays $100.35/month for a non-participating policy with $100,000 in coverage, while a 40-year-old male non-smoker can pay $141.66/month
• Health: Good overall health can help you secure more favourable rates
• Smoking status: Smokers and tobacco users typically pay significantly more than non-smokers
• Gender: Women often pay slightly lower premiums because they generally have longer life expectancies
• Occupation: High-risk occupations may increase premiums depending on the insurer
• Lifestyle and hobbies: Activities such as skydiving, scuba diving, or motor racing may result in higher rates

Policy and coverage factors:

• Coverage amount: Higher death benefits result in higher premiums. A $500k policy will cost more than a $250k whole life insurance policy
• Policy type: Participating whole life policies usually cost more than non-participating policies because of their dividend potential
• Payment period: Limited-pay policies often have higher annual premiums than lifetime-pay policies since payments are compressed into fewer years
• Policy riders: Optional add-ons, such as critical illness, child, or disability riders, increase the overall cost of your policy
• Payment frequency: Some insurers offer modest savings if you pay annually instead of monthly

How do whole life insurance premiums work?

A whole life insurance policy will offer coverage as long as you pay the premiums. Here’s how it works:

• The premiums will remain fixed, and the coverage remains active as long as you pay the premiums
• A part of the whole life insurance cost goes towards life insurance coverage, and the other part builds the cash value
• The greater the cash value, the more interest will be accrued, and the greater the cash value

Why is whole life insurance expensive?

Whole life insurance costs more than term life insurance because it provides lifetime coverage and builds cash value. Unlike term insurance, which covers you for a set period, whole life insurance is designed to pay a guaranteed death benefit whenever you die, provided the policy remains in force. Premiums also help fund the policy’s cash value and other guarantees, which contribute to the higher cost.

What is the cash value of whole life insurance? 

Cash value in life insurance is essentially an accumulated savings component funded by a portion of the premiums you pay. This cash value amount grows over time at a guaranteed rate and can be accessed tax-deferred during your lifetime through policy loans, withdrawals, or even to cover premium payments. 

It is also worth noting that this amount is separate from the death benefit. At death, beneficiaries receive the policy’s death benefit (base amount plus any paid‑up additions and dividends on deposit, minus loans/interest). The accumulated cash value generally remains with the insurer and is not paid out in addition to the death benefit.

How does cash value grow?

During the early years of the policy, a larger portion of your premium goes toward insurance costs and administrative expenses. As a result, the cash value grows gradually. However, as the policy matures, the cash value typically increases at a faster pace. 

Additionally, if you own a participating whole life policy, annual dividends may further increase your cash value and death benefit. Unlike market-based investments, guaranteed cash value is not affected by volatility. This makes it a relatively stable long-term commitment.

How to use cash value in whole life insurance?

You can access the cash value of a whole life insurance policy by taking out a policy loan, making a partial withdrawal, using the cash to pay premiums, or fully surrendering the policy.

Each option has different tax implications and may affect your policy’s cash value or death benefit, so it’s important to understand how they work before accessing your policy.

Here’s an overview of how you can use the cash value of your whole life insurance policy:

What happens to cash value when the insured dies?

When the insured dies, the cash value is not paid out to the beneficiaries and is returned to the insurance company. In most whole life policies, the insurer pays the beneficiaries only the death benefit, while the accumulated cash value is generally not paid separately. The cash value, however, helps the insurer fund the guaranteed death benefit.

What are whole life insurance dividends?

If you purchase a participating whole life insurance policy, you may receive annual dividends from your insurer. These dividends are based on the performance of the insurer’s participating account and may be paid to eligible policyholders.

The dividends are issued when the participating account performs better than expected in terms of investment returns, claims experience, and operating expenses. Additionally, dividend scale interest rates and payouts vary by insurer and can change over time. While these amounts are not guaranteed, they add flexibility and long-term value to your policy

How to use your whole life insurance dividends?

Similar to the cash value component, you can use your dividends to purchase additional paid-up life insurance, receive cash payments, or even repay your outstanding policy loans.

• Paid-up additions: Purchase additional fully paid-up life insurance, increasing both cash value and the death benefit
• Cash payment: Receive the dividend directly as cash
• Premium reduction: Use dividends to pay some or all of your premium payments
• Deposit with the insurer: Leave dividends on deposit to earn interest, subject to the insurer’s rates
• Loan repayment: Apply dividends toward outstanding policy loans

Can you cancel your whole life insurance policy? 

Yes, most whole life policies can be cancelled at any time. However, since these policies build cash value, cancelling them differs from cancelling a term life policy. If you surrender your whole life insurance policy, the insurer generally pays you the available cash surrender value after deducting any applicable surrender charges, outstanding policy loans, or unpaid interest. Once cancelled, your coverage ends, and your beneficiaries will no longer receive a death benefit. 

Like most life insurance policies in Canada, whole life insurance also includes a free-look (cooling-off) period, typically lasting 10 to 30 days after you receive your policy. During this period, policyholders can review and cancel the policy, receiving a full refund of any premium paid.

What does whole life insurance not cover?

While whole life insurance covers natural and accidental death, there are certain exclusions and situations where a claim may be denied or the policy may become void.

Common exclusions and limitations include:

• Suicide: Most policies have a two-year suicide exclusion. If death occurs during this period, the death benefit is generally not paid, although premiums may be refunded
• Risky activities: Activities such as skydiving or scuba diving may result in higher premiums, standard coverage, or an exclusion, depending on the insurer’s underwriting assessment
• Fraud or misrepresentation: False or incomplete information on an application can result in claim denial or policy cancellation
• War and terrorism: Some policies may restrict or exclude coverage for deaths related to war, armed conflict, or terrorism
• Undisclosed medical conditions: Failing to disclose requested health information can lead to claim denial, policy cancellation, or the policy being declared void

Exclusions vary by insurer and policy. Review policy wordings for specific limitations and definitions that apply to your coverage.

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

If you are 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 as 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
• 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

How does whole life compare to other life insurance policies available?

Whole life insurance is one of the many types of life insurance available in Canada. Depending on your financial goals, you may also consider term life insurance, universal life insurance, or no-medical life insurance.

Here’s a quick overview of how whole life compares to other popular life insurance options:

For a detailed comparison of the plans, check out the different types of life insurance in Canada.

Best whole life insurance providers in Canada

In Canada, you can buy whole life insurance from some of the best companies, including Sun Life, Canada Life, Equitable Life, Manulife, and a few others. The right insurer depends on your coverage amount, participating-account objectives, payment period, financial strength, underwriting, policy guarantees, and dividend history.

You can also read our blog on the best whole life insurance companies in Canada to compare the top options available. Here is a quick overview of some of the best companies you can consider:

• Equitable Life: A strong option for those who value a mutual-company structure and participating whole life coverage.
• Manulife: Offers multiple premium payment options, including 10-pay, 20-pay, pay-to-90, and pay-to-100, along with its Vitality Plus option
• Empire Life: Known for balanced whole life offerings through EstateMax and Optimax Wealth, with options for different long-term financial goals
• Sun Life: Offers high coverage amounts and flexible policy features that can suit high-net-worth estate planning needs.
• Foresters Financial: Offers competitive whole life options for smokers, including a Quit Smoking Incentive

Is whole life insurance worth it?

Yes, whole life insurance can be worth it if you are seeking lifelong financial protection, guaranteed cash value growth, and estate planning benefits. Unlike term life insurance, whole life insurance is not designed solely to replace your income for a limited period. It provides permanent financial protection while building cash value, in exchange for comparatively higher premiums.

Who is whole life insurance best suited for?

Whole life insurance is a good choice for those who:

• Want guaranteed lifetime coverage
• Want to leave a tax-free inheritance for your family
• Need funds to cover estate taxes or final expenses
• Have dependents who will rely on your financial support
• Want to build guaranteed cash value over time

Who may not need whole life insurance?

Whole life insurance may not be an ideal choice if:

• Your priority is affordable coverage at lower premiums
• You want temporary coverage
• You have limited financial obligations

Can whole life insurance be used for corporate business planning?

Yes, whole life insurance can be used for corporate and business planning in Canada, particularly by incorporated business owners. With a corporate-owned life insurance (COLI) policy, the corporation owns and pays the premiums and is generally named as the beneficiary.

The policy can help with business succession, shareholder agreements, estate planning, and providing liquidity to cover financial obligations when an insured business owner dies. Depending on the policy structure, the corporation may also build cash value that can support longer-term financial planning.

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 policy. 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 in 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 Canadian whole life insurance?

Yes, your money grows in a whole life insurance policy through its cash value component. It 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.

Do you need a medical exam for whole life insurance?

In many cases, yes. Most traditional whole life insurance policies in Canada require medical underwriting, particularly if you are applying for a higher coverage amount. Depending on your age, health, and smoking status, insurers may require you to take tests to assess your health conditions.

However, many insurers also offer simplified issue and guaranteed acceptance whole life insurance with little or no medical underwriting. It is worth noting that simplified issue and guaranteed issue whole life insurance policies will typically have lower coverage limits and higher premiums, compared to traditional policies with medical underwriting.

What age to get whole life insurance?

Although there is no ideal age to get a whole life policy, 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 it 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

Case study: A whole life insurance example

Let’s look at how whole life insurance works in a real-world example. John is a 30-year-old Canadian who’s thinking about estate planning. He wants lifetime insurance coverage so he can leave a financial benefit for his family after he dies.

The chart below shows the cash value of his policy over time.

• Age: 30
• Gender: Male
• Policy type: Whole life (non-participating)
• Death benefit: $250,000
• Annual premium: $1,565
• Payment type: Life pay (premiums paid annually for life)

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

John can access the cash value of his policy during his lifetime, subject to the policy’s terms. However, accessing the cash value can reduce the policy’s value or death benefit and may have tax implications.

How to find the right whole life insurance policy?

Choosing the right whole life 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

Frequently asked questions

How long does it take to build cash value?

Cash value begins accumulating once your policy is in force, although growth is generally slower during the first few policy years. It typically accelerates over the long term. The timing and amount of cash value growth depend on the specific policy, premium structure, and whether the policy is participating or non-participating.

Are whole life insurance dividends guaranteed?

No, dividends are only available on participating whole life policies and are not guaranteed. They depend on the insurer’s financial performance. Insurers determine dividends based on factors such as the performance of the participating account, investment results, mortality experience, and expenses. An insurer’s historical dividend payments do not guarantee future payments.

Can I have more than one whole life policy?

Yes, many Canadians own multiple life insurance policies to meet different financial needs. Having multiple policies can help address different financial needs, such as estate planning, business protection, or leaving an inheritance. You may also combine permanent coverage with a term life policy when you need additional coverage for a specific period, such as while raising children or paying a mortgage.

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.

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.

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.

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 depends on 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.

How long does whole life insurance last?

Whole life insurance is designed to provide coverage for the insured’s entire lifetime, rather than for a fixed term. The policy remains in force as long as its requirements are met, such as paying premiums when due or maintaining sufficient policy value where applicable.

Should you buy whole life insurance for your child?

Yes, many Canadian parents and grandparents purchase whole life insurance for children to give them lifelong coverage at a young age. Buying coverage while a child is young can lock in lower premiums for life, guarantee their future insurability regardless of changes in health, and begin building cash value that they can access later in life, subject to the policy terms.

Top 5 best life insurance companies for couples in Canada

Choosing the right life insurance company for couples in Canada is just as important as choosing the right type of policy. While many insurers offer great benefits, the following companies offer greater flexibility, built-in benefits, and features that make them particularly suitable for partners with shared financial goals.

Here’s an overview of the five best life insurance companies for couples in Canada:

BMO Insurance

BMO Insurance is an excellent choice for couples who want their coverage to remain stable even after a life-changing event. Even if one insured person in a joint policy passes away, the surviving insured member can continue coverage at the same premium, provided the coverage amount remains unchanged.

This feature is great for couples seeking hassle-free coverage, especially at older ages when premiums are higher. In addition, BMO also offers the Empathy service, which provides emotional and logistical support to the policyholder’s beneficiaries.

Beneva

Beneva is well suited for couples who want more than just a death benefit. The policies include valuable built-in features such as the Extreme Disability Benefit and Guaranteed Insurability Option, ensuring policyholders can increase coverage later on without additional medical underwriting (under qualifying circumstances).

Additionally, eligible policies also have the option to add valuable riders such as child coverage and accidental death benefits, allowing couples to customize their protection and help ensure the financial safety of their beneficiaries.

Empire Life

Empire Life has one of the most seamless application processes, combining a streamlined online application process with competitive policy features. Couples can benefit from policy fee savings, strong term conversion options, and the ability to choose from a wide selection of term and permanent life insurance plans.

Policyholders can also add critical illness insurance under the same policy, making it easier for them to build a comprehensive financial protection plan. Additionally, the joint first-death plan offers temporary insurance to the surviving partner for an additional 90 days. This gives the spouse time to figure out their next steps without suddenly being unprotected.

RBC Insurance

RBC Insurance stands out for its Pick-a-Term feature, which lets partners choose a customized term length rather than selecting only standard options such as 10 or 20 years. This flexibility allows them to match coverage with major financial obligations like mortgages, education, or even retirement planning.

Many eligible policies also feature a seamless conversion option, allowing couples to transition from term to whole life without additional medical underwriting. Couples can also benefit from policy fee savings when purchasing joint coverage.

Manulife

Manulife is an excellent option for couples who want to combine life insurance with wellness incentives. Through the Manulife Vitality program, policyholders can earn points and receive rewards for maintaining healthy lifestyle habits, such as exercising, participating in activities, and completing health assessments.

Additionally, Manulife life insurance offers a Waiver of Premium option for couples. If either partner becomes totally disabled due to injury or illness, the premiums for the entire joint policy are waived, ensuring coverage remains active while household income is impacted.

Quick overview of the five best insurance companies for couples in Canada:

What is the best life insurance for couples in Canada?

The best life insurance for couples in Canada depends on a couple’s financial goals, family situation, and long-term plans. Leading insurers such as BMO, Empire Life, RBC Insurance, and Manulife offer unique features that suit couples seeking financial protection.

While many assume a joint policy is best, separate life insurance policies can offer greater flexibility, personalized coverage, and better long-term value. Joint first-to-die insurance covers two people but generally pays one benefit when the first insured dies. Meanwhile, joint last-to-die insurance generally pays the benefit after the second insured dies. This can make it useful for estate expenses and wealth transfer.

Here’s a quick overview of life insurance for couples in Canada:

Types of life insurance available for couples in Canada

In Canada, couples can choose between joint life insurance policies that cover both partners under a single plan or individual policies that provide separate coverage for each person. Based on the type you choose, the following options are available:

• Joint first-to-die life insurance
• Joint last-to-die (survivorship) life insurance
• Two separate life insurance policies
• Combined or multi-life insurance policy

Here’s a quick overview of the different policy types:

Joint first-to-die life insurance

A joint first-to-die life insurance policy covers two people under a single contract and pays the death benefit after the first insured person passes away. Once the benefit is paid, the policy ends, and the surviving partner no longer has coverage.

Couples commonly choose this option to ensure the surviving spouse has financial protection for living expenses, debts, child care, or mortgage payments. While it is comparatively less expensive than two separate policies, note that joint first-to-die life insurance only provides one death benefit.

Joint last-to-die (survivorship) life insurance

A joint last-to-die policy insures two people under one contract but pays the death benefit only after both insured individuals have passed away. Since the insurer does not pay until the death of both partners, premiums are often lower than buying two separate policies.

This option is great for parents or partners who wish to protect their children and other beneficiaries from debts and to support estate planning and wealth transfer.

Two separate or single life policies for couples

In this case, each spouse owns an individual policy with their own coverage amount, beneficiaries, and policy features. Each policy pays its own death benefit when the insured passes away, offering beneficiaries two separate payouts over time.

This is the most flexible option, working well for couples with different incomes, debts, health conditions, or long-term financial goals. Additionally, separate policies are easier to maintain in the event of a divorce or separation. Since they are not under a joint policy, the individuals continue to be insured without any complications or reassessment. 

Combined or multi-life insurance policy

A combined or multi-life insurance policy allows two people to have two coverages within a single insurance contract. It combines features of joint policies while offering personalized and individual solutions under one policy. 

Each insured person has their own benefit, but the policy is offered under one application and one premium payment schedule. Beneficiaries receive two death benefits, one for each policyholder. Despite being combined, the death benefits are separate for each individual. Since there are two policies under one contract, couples can save on policy or administration fees, reducing the overall costs.

Frequently Asked Questions

How much is a $50,000 whole-life policy?

The cost of a $50,000 whole-life policy for a non-smoker can range from $26.60 to $197.55 per month. For the same coverage amount, a smoker may have to pay between $28.94 and $273.20 per month. 

Healthier applicants typically pay less, while individuals with health issues may face higher premiums. Additional policy riders and options can also increase the cost.

Is $50,000 of life insurance enough coverage?

Whether a $ 50,000 life insurance policy is enough coverage depends on an individual’s financial situation and goals. This amount may be sufficient to cover final expenses, such as funeral costs and outstanding debts, or to provide a modest financial cushion for loved ones. 

However, if an individual has dependents, a mortgage, or significant financial obligations, they might need a higher coverage amount to adequately protect their family’s financial future.

How does an individual’s age affect the cost of their  $50,000 life insurance policy?

An individual’s age significantly affects the cost of a $50000 life insurance policy. Generally, the younger you are when you purchase the policy, the lower your premiums will be. This is because younger individuals are typically at lower risk of health issues and death. 

As individuals age, premiums increase due to the higher risk of health problems, making it more expensive to obtain the same coverage.

Is $50,000 term life insurance cheaper than permanent life insurance? 

Yes, term life insurance is generally less expensive than permanent life insurance, owing to its limited coverage and lack of cash value accumulation. Permanent policies like whole life insurance provide lifelong coverage alongside cash value growth and non-guaranteed dividends in participating policies.

Can seniors get $50,000 of life insurance?

Yes, seniors in Canada may qualify for $50,000 of life insurance. However, eligibility depends on their age, health, and the insurer’s policy terms. Some insurance companies may limit the amount and types of coverage available based on age.

Can I get $50,000 of life insurance with no medical exam?

Yes, some insurers offer $50,000 of life insurance without a medical exam through simplified issue and guaranteed issue policies. Insurers like RBC, Humania, and Manulife offer various no-medical plans that offer coverage to Canadians without a medical exam. However, policyholders may be required to complete a health questionnaire.

Can I convert $50,000 term insurance to permanent insurance?

Yes, if your term life policy offers a conversion privilege, you may be able to convert some or all of your $50,000 term coverage to permanent life insurance before the policy’s conversion deadline. Depending on the contract, conversion may also be available without providing new medical evidence of insurability.

Is $50,000 of whole life insurance a good investment?

Yes, a whole life insurance policy for $50,000 is a good investment if you need lifelong coverage for that amount, alongside cash value growth and non-guaranteed dividends. It can be used to leave behind a legacy or help cover final expenses.

Does smoking affect the cost of $50,000 of life insurance?

Yes, smokers generally pay more for the same amount of life insurance than non-smokers. A smoker may pay 50% to 100% more than a non-smoker for the same amount of coverage, owing to the increased mortality risks associated with smoking.

Can I use $50,000 of life insurance to cover funeral expenses?

Yes, a beneficiary can use proceeds from a $50,000 life insurance death benefit to help pay funeral and other final expenses. The policyholder can leave behind the death benefit for dependants or specific beneficiaries, allowing them to use it to pay funeral costs and other associated expenses.

Does life insurance cover suicide in Canada?

Yes, life insurance in Canada generally covers suicide, but only after the policy’s suicide exclusion period has ended. Most insurers, including Canada Life, Equitable Life, Manulife, Sun Life, and others, have a two-year suicide clause.  If the insured dies by suicide within those first two years, the death benefit is generally not paid. Once this period expires, beneficiaries are generally eligible to receive the full death benefit, provided all policy terms and conditions have been met.

Life insurance coverage for suicide:  at a glance

What is the suicide clause in life insurance?

A suicide clause is a standard provision found in most life insurance policies in Canada that limits or excludes the payment of the death benefit when the insured dies by suicide during a specified period after coverage begins. The clause is designed to protect insurers from individuals purchasing coverage with the intention of making an immediate claim due to suicide.

If the policyholder dies by suicide during the exclusion period, the insurer will typically deny the death benefit. Once the exclusion period ends, suicide is generally treated like any other covered cause of death. Eligible beneficiaries can usually receive the death benefit, depending on the terms and conditions of the policy.

How long does the suicide clause last?

A two-year exclusion period is common in many individual term, whole life, universal life, and no-medical life policies, but it should not be assumed that every policy uses identical wording. One must review the policy’s suicide provision, effective date, reinstatement clause, etc.

In some cases, the two-year period may restart if:

• The policy lapses and is later reinstated
• A new policy replaces an existing one
• Significant changes require new underwriting (depending on the insurer and policy)

Why insurers include this clause

Insurers include a suicide clause to reduce fraudulent life insurance claims and keep premiums affordable for all policyholders. Without an exclusion period, someone could purchase a policy knowing an immediate claim was likely, creating a significant financial risk for insurers.

The clause serves several purposes:

• Prevents insurance fraud: Discourages individuals from buying a policy solely to trigger an immediate death benefit
• Keeps premiums affordable: Reduces unnecessary claim risk, helping insurers maintain stable pricing for all customers
• Promotes fair underwriting: Ensures life insurance functions as long-term financial protection rather than an immediate financial payout
• Provides long-term coverage: Once the exclusion period ends, suicide is generally covered like other causes of death, giving families financial security when they need it most

How does suicide affect life insurance payouts?

Whether a life insurance policy pays out after suicide depends on when the death occurs and the type of policy. Your policy wording will normally state exactly how your provider will deal with a death by suicide.

In case of death during the suicide clause period

If the insured dies by suicide within the policy’s suicide exclusion period, the insurer generally does not pay the policy’s death benefit. Instead, some insurers refund the premiums paid, although the exact amount and terms may vary by policy. For example, policy terms from insurers like  Desjardins, Sun Life, and others state that they will return payments made or the policy’s cash value if the policyholder dies by suicide before the 2-year period is up.

Alternatively, some providers may choose to deduct fees. The exact payment depends on the policy wording.

In case of death after the suicide clause period

Once the two years specified in the clause have passed, the life insurance policy will treat it as a regular cause of death. The provider will pay out if the individual passes away for any of the typical covered reasons, including suicide. 

If the policy remains in force and there has been no material misrepresentation or policy lapse, the insurer will usually pay the full death benefit to the named beneficiaries. The claim is processed through the insurer’s standard claims procedure, and the payout can be used for any purpose, such as replacing lost income, paying off debts, covering funeral expenses, or supporting long-term financial needs.

In case of a joint life insurance policy

A joint life insurance policy generally includes the same two-year suicide clause as an individual life insurance policy, but the treatment of a claim depends on whether the policy is joint first-to-die or joint last-to-die. For joint first‑to‑die, no benefit is payable if the first death is suicide within two years. Once that period has passed, the benefit is payable at the first death. For joint last‑to‑die, there is no payout at the first death regardless of cause or exclusion. The suicide clause is assessed at the death of the second individual, which triggers the benefit as per policy wording.

Does the suicide clause apply to every type of life insurance?

Yes, the suicide clause generally applies to most individual life insurance policies in Canada, including term life, whole life, universal life, and many no-medical life insurance plans. While the exact wording may differ between insurers, most policies include a two-year suicide exclusion period that begins on the policy’s effective date.

The only exception is group life insurance, which is provided through an employer or association, and may have different terms from an individual policy. Some group plans include a suicide exclusion period, while others may not. Coverage and payout conditions depend on the insurer and the specific group contract.

Does medically assisted death (MAID) affect life insurance?

No, Medical Assistance in Dying (MAID) in most cases does not affect a valid life insurance claim in Canada. Since MAID is a legal medical procedure available to eligible individuals under Canadian law, many insurers do not automatically apply the standard suicide exclusion clause. Instead, they assess claims according to their policy wording and internal claims guidelines.

The Canadian Life and Health Insurance Association states that compliant MAID will not be considered suicide for life insurance purposes. Regardless of the approach, eligible beneficiaries can generally receive the death benefit if the policy is valid and all terms have been met.

However, MAID does not remove other valid grounds for ineligibility, such as:

• Material misrepresentation when the insured applied for coverage
• A medical condition that was specifically excluded when the policy was issued

Does a history of mental illness affect life insurance coverage?

Yes, a history of mental illness can affect life insurance coverage, but it will not prevent you from getting coverage. Many insurers offer coverage to applicants with conditions such as depression, anxiety, bipolar disorder, or other mental health disorders. Approval and premiums are based on factors such as your diagnosis, treatment plan, symptom stability, medications, hospitalization history, and overall health, not simply the diagnosis itself.

It is also important to note that having a mental health condition does not change the standard suicide clause. Most life insurance policies apply the same two-year suicide exclusion period to all policyholders, regardless of their mental health history.

Does a previous suicide attempt affect a life insurance application? 

Yes, a previous suicide attempt can affect a future life insurance application. Insurers like Sun Life specifically consider the applicant’s age, number of attempts, and time since the incident. Additionally, they may consider factors such as resulting medication, hospitalization, underlying psychiatric conditions, and stability of home and life.

When can the suicide clause restart?

Although the suicide clause typically expires after two years, it may restart in certain situations. This most commonly happens when a lapsed policy is reinstated, as many insurers begin a new two-year suicide exclusion period from the date of reinstatement.

The clause may also restart if you replace your existing policy with a new one or make significant changes that require new underwriting, such as applying for a higher coverage amount. Since these rules vary by insurer and policy type, it is important to review your policy documents or speak with your insurance advisor before making changes to your coverage.

How do beneficiaries file a life insurance claim after a suicide-related death?

In case of a suicide-related death, beneficiaries should notify the insurer promptly and provide the required documents. The insurer will review the claim, including the policy terms and the timing of the death, before determining whether the death benefit is payable. Here’s a step-by-step process for the same:

• Notify the insurer: Contact the life insurance company as soon as possible to report the death and begin the claims process, if applicable
• Submit the required documents: Provide the completed claim form, death certificate, proof of identity, and any other documents requested by the insurer
• Cooperate with the claim review: The insurer may review the policy’s effective date, cause of death, and medical records to determine whether the suicide exclusion or contestability period applies
• Review the claim decision: If the policy terms have been met, the death benefit is generally paid. If the claim is denied, the insurer will explain the reason in writing

What documents are needed for a suicide-related life insurance claim?

For a suicide-related life insurance claim in Canada, beneficiaries will generally need to provide the insurer with standard death-claim documents as well as any additional records required to confirm the cause and circumstances of death. 

While the exact list of documents can vary based on the insurer, it may include:

• Proof of death, such as an official death certificate
• Coroner’s or police report
• Proof of identity for the beneficiary or claimant
• Physician’s statement or medical records, if requested

Beneficiaries are requested to contact the insurer after a death to know if any additional documentation may be required.

What happens if a life insurance claim is denied because of suicide?

If a life insurance claim is denied because of suicide, it is usually because the insured died during the policy’s suicide exclusion period. If your claim is denied, you should take the following steps:

• Review the insurer’s explanation: Understand why the claim was denied and which policy provision applies
• Check the policy wording: Confirm whether the suicide exclusion or another policy condition was the reason for the denial
• Request additional information: Ask the insurer to explain how they reached their decision, if anything is unclear
• Appeal the decision if appropriate: If you believe the claim was wrongly denied, you may be able to provide additional evidence or request a formal review by the insurer

What should beneficiaries do after a suicide-related death?

In case of a suicide-related death, beneficiaries should notify the insurer promptly and provide the required documents. The insurer will review the claim, including the policy terms and the timing of the death, before determining whether the death benefit is payable. Here’s a step-by-step process for the same:

• Notify the insurer: Contact the life insurance company as soon as possible to report the death and begin the claims process, if applicable
• Submit the required documents: Provide the completed claim form, death certificate, proof of identity, and any other documents requested by the insurer
• Cooperate with the claim review: The insurer may review the policy’s effective date, cause of death, and medical records to determine whether the suicide exclusion or contestability period applies
• Review the claim decision: If the policy terms have been met, the death benefit is generally paid. If the claim is denied, the insurer will explain the reason in writing

What happens if a life insurance claim is denied because of suicide?

If a life insurance claim is denied because of suicide, it is usually because the insured died during the policy’s suicide exclusion period. If your claim is denied, you should take the following steps:

• Review the insurer’s explanation: Understand why the claim was denied and which policy provision applies
• Check the policy wording: Confirm whether the suicide exclusion or another policy condition was the reason for the denial
• Request additional information: Ask the insurer to explain how they reached their decision, if anything is unclear
• Appeal the decision if appropriate: If you believe the claim was wrongly denied, you may be able to provide additional evidence or request a formal review by the insurer

Frequently Asked Questions

How do life insurance companies determine if someone died by suicide?

Once an insurance claim is submitted, your insurance company will do its own investigation before making a payout. In the unfortunate instance of a death by suicide, life insurers will usually look into the cause of death. This may include reviewing medical records, law enforcement or police reports, and speaking with family members or friends. After the investigation is complete, the insurer will determine whether the death benefit is payable.

Does life insurance pay out if suicide occurs after two years?

Yes, in most Canadian life insurance policies, the full death benefit is paid if the insured dies by suicide after the two-year suicide exclusion period has expired. The policy must remain active, premiums must be up to date, and there must be no material misrepresentation on the application.

Does replacing or reinstating a life insurance policy restart the suicide clause?

Yes, replacing or reinstating a life insurance policy can restart the suicide clause. Many insurers restart the two-year suicide exclusion period when a lapsed policy is reinstated or when an existing policy is replaced with a new one. Significant policy changes that require new underwriting may also trigger a new exclusion period.

Can a life insurance claim for suicide be appealed?

Yes, a life insurance claim for suicide can be appealed. If a claim is denied, beneficiaries can request a detailed explanation from the insurer, review the policy wording, and provide additional supporting documents if necessary. If they believe the claim was incorrectly denied, they may request a formal review or appeal the insurer’s decision.

Does the suicide clause apply to no medical life insurance?

Yes, no medical life insurance policies, including simplified issue and guaranteed issue plans, include a suicide exclusion period similar to traditional life insurance policies. However, the exact terms and exclusions vary by insurer, so it’s important to review the policy wording before purchasing coverage.

Is MAID considered suicide for life insurance?

Whether Medical Assistance in Dying (MAID) is considered suicide for life insurance purposes depends on the insurer. Some Canadian insurers classify MAID as a separate category from suicide, while others treat it as a death resulting from an illness. In either case, many insurers will pay the death benefit if the policy is valid and all terms and conditions have been met. Because insurer policies differ, it’s important to review your policy wording or speak with your insurance advisor to understand how MAID-related claims are handled.

Which is the key document in Canada that proves the cause of death?

The main document in Canada that officially records and proves the medical cause of death is the Medical Certificate of Death (often ordered as part of a Certified Copy of Death Registration when specific medical details are required). This document is issued and signed by an attending physician or a coroner, detailing both the direct medical cause of death and the manner of death.

The average cost of life insurance in Canada starts at around $7 per month for a healthy young adult purchasing a basic term life insurance policy. Depending on the type of policy, coverage amount, age, health, and insurer, premiums can range from $7 to over $3,276 per month. Individuals who smoke, have pre-existing medical conditions, work in high-risk occupations, or require larger coverage amounts generally pay higher costs. On the other hand, young and healthy applicants typically qualify for lower rates.

Quick summary: Average life insurance costs in Canada

Disclaimer: The premiums shown above are illustrative estimates based on specific applicant profiles and policy assumptions, and your actual life insurance cost may vary depending on several factors such as your age, gender, health, smoking status, medical history, coverage amount, policy type, term length, and the insurer’s underwriting guidelines.

Factors affecting life insurance cost in Canada

The cost of life insurance in Canada is mainly driven by factors like age, gender, health, coverage amount, and more. Some of these factors include: 

• Age: The age of the individual directly affects the life insurance cost. The older the individual, the higher the premium
• Gender: Life insurance costs may vary by gender, with women generally paying lower premiums than men
• Coverage amount: The higher the coverage amount you choose, the higher the life insurance rates will be
• Health: An individual’s health also affects life insurance rates. A healthy individual, compared to someone with a history of medical conditions, qualifies for lower rates
• Smoking status: Any insurance company in Canada will charge a higher premium if you are a smoker. This is because the health risks associated with smoking are higher than those for a non-smoker
• Lifestyle: If you are involved in high-risk activities as a result of your hobby or occupation, then the insurer views you as higher risk. This increased liability will also result in you paying higher premiums
• Insurer: Life insurance rates can vary between insurers because each company has its own underwriting guidelines, pricing, and risk assessment

Why do men pay more for life insurance than women?

Men pay higher premiums than women because insurers consider life expectancy and mortality risks when setting life insurance premiums. Generally, men have lower life expectancy than women, which can increase the insurer’s expected cost of providing coverage over the policy term. Moreover, the exact difference in premiums will also vary depending on the insurer and their underwriting rules, along with the other factors listed above.

Life insurance costs by policy type

The type of policy you choose is one of the biggest factors affecting your life insurance rates. In general, term life insurance is the most affordable option, while permanent policies, such as whole life insurance, cost more because they provide lifelong coverage and can build cash value. No-medical life insurance also tends to have higher premiums since insurers assume more risk by offering coverage without requiring a medical exam.

What is the cost of term life insurance in Canada?

The cost of term life insurance in Canada with $500,000 in coverage can range from $14 to $200 per month, depending on the applicant’s age, gender, and health. Because term life insurance provides coverage for a fixed period and does not build cash value, it is the most affordable type of life insurance. It is well-suited for individuals and families looking to protect their income, cover a mortgage, or provide financial security during their highest-earning years.

Term life insurance cost in Canada

*Illustrative monthly cost of term life insurance for a 10-year period for individuals of various ages with $500,000 in coverage

What is the cost of whole life insurance in Canada?

In Canada, participating whole life insurance with $100,000 in coverage costs between $139 and $382 per month, whereas a non-participating policy may cost between $71 and $320 per month, depending on the applicant’s age and insurer. The cost of whole life insurance is generally several times more expensive than an equivalent term life policy because it provides lifelong coverage and builds cash value. 

Participating whole life insurance may also pay policy dividends, depending on the insurer’s dividend performance. It is commonly chosen for estate planning, wealth transfer, tax-advantaged savings, and leaving a guaranteed financial legacy.

Cost of whole life insurance in Canada

*Illustrative monthly costs for a male individual of various age ranges seeking a whole life insurance policy with $100,000 in coverage for a 20-pay premium option

What is the cost of a no-medical life insurance policy in Canada?

The cost of a 20-year no-medical life insurance policy with $500,000 in coverage ranges from $39 to $380 per month. While no-medical policies offer faster approval and do not require a medical exam, they generally cost more than fully underwritten life insurance because insurers take on greater underwriting risk. These policies are often suitable for individuals with pre-existing health conditions, those who may not qualify for traditional life insurance, or applicants who need coverage quickly.

Cost of a no-medical life insurance policy

*Illustrative monthly cost of a 20-year no-medical plan with $500,000 in coverage

Life insurance rates chart by coverage amount

The amount of term life insurance coverage you choose has a direct impact on your monthly premium. Higher coverage amounts generally cost more, although the premium increase is not always proportional. The cost of a $100,000 term life insurance policy will be much lower than that of a $250,000 term life policy. The coverage amount in the section below details the cost of different coverage amounts in Canada.

How much does a $100,000 life insurance policy cost?

A $100,000 term life insurance policy in Canada costs approximately $7 to $44 per month. While premiums remain relatively affordable for younger applicants, they increase significantly with age due to the higher insurance risk. A $100,000 policy may be suitable for people looking to cover final expenses, smaller debts, or supplement existing life insurance. However, it may not provide enough coverage for someone with a mortgage, dependents, or significant income replacement needs.

Cost of a $100,000 life insurance policy

*Illustrative monthly cost of term life insurance for a 10-year plan with $100,000 in coverage for a male/female non-smoker

How much does a $250,000 life insurance policy cost?

The cost of a $250,000 term life insurance policy ranges from approximately $10 to $98 per month. A $250,000 coverage is a popular choice for individuals and families looking to cover obligations such as a portion of their mortgage, income replacement, children’s education costs, outstanding debts, or other long-term expenses.

Cost of a $250,000 life insurance policy

*Illustrative monthly cost of term life insurance for a 10-year plan with $250,000 in coverage for male/female non-smoker

How much does a $500,000 life insurance policy cost?

A $500,000 term life insurance policy costs between $13 and $177 per month for healthy non-smokers. The exact premium will vary, with younger applicants typically qualifying for significantly lower rates. A $500,000 coverage can help cover major financial obligations.

Cost of a $500,000 life insurance policy

*Illustrative monthly cost of term life insurance for a 10-year plan with $500,000 in coverage for male/female non-smoker

How much does a $1,000,000 life insurance policy cost?

The cost of a life insurance policy with $1,000,000 in coverage is between $21 and $330 per month. This coverage amount is commonly chosen by high-income earners, homeowners, parents with young children, business owners who need substantial coverage to replace income, pay off significant debts, fund future education costs, or leave a substantial financial legacy.

Cost of a $1,000,000 life insurance policy

*Illustrative monthly cost of term life insurance for a 10-year plan with $1,000,000 in coverage for male/female non-smoker

How much does a $10,000,000 life insurance policy cost?

The rates for life insurance with $10,000,000 in coverage range from $166 to $3,276 per month. Premiums are substantially higher than those for lower-value policies because the insurer assumes a much larger financial risk. A $10,000,000 life insurance policy is suitable for high-net-worth families, business owners, executives, and professionals with significant financial obligations, business succession needs, or those with complex estate planning goals.

Cost of a $10,000,000 life insurance policy

*Illustrative monthly cost of term life insurance for a 10-year plan with $10,000,000 in coverage for male/female non-smoker

Life insurance costs by applicant category

Life insurance premiums can vary significantly depending on your personal circumstances and risk profile. In general, smokers, seniors, and individuals with health conditions tend to pay higher life insurance rates because they present a greater insurance risk. Couples may have the option to reduce costs through certain joint life insurance policies, although individual policies may be more cost-effective in some cases.

How much is life insurance per month for smokers and non-smokers?

The cost of $500,000 in term life insurance for smokers ranges from $42 to $504 per month, while comparable coverage for non-smokers ranges from $21 to $177 per month. Smokers pay premiums that are often 2 to 4 times higher than non-smokers because tobacco and nicotine use are associated with a higher risk of serious health conditions, including heart disease, stroke, and cancer. 

The difference in premiums becomes more noticeable with age, as the combined impact of smoking and age increases an insurer’s expected risk. Quitting smoking can significantly reduce your premiums, but most insurers require you to remain tobacco-free for at least 12 months before you may qualify for non-smoker rates. The required tobacco-free period may vary by insurer. 

Cost of life insurance for smokers and non-smokers (male) for varying age groups

*Illustrative monthly costs for a male individual seeking $500,000 in life insurance coverage for a 10-year policy

How much is life insurance per month for seniors?

The cost of $100,000 in term life insurance for male seniors ranges between $18 and $267 per month, while comparable coverage for female seniors is between $15 and $179 per month. Female applicants generally pay lower premiums than male applicants because they tend to have a longer life expectancy. As you get older, the costs for life insurance for seniors increase due to the higher likelihood of health issues and claims during the policy term.

Cost of life insurance for seniors

*Illustrative monthly costs for non-smoker seniors in various age ranges seeking a term life insurance policy with $100,000 in coverage

How much is life insurance per month for children?

Children’s whole life insurance typically starts at around $100 per month. Whole life insurance policies for children provide lifelong coverage and can build cash value over time, making them a long-term financial planning tool as well as a source of insurance protection.

Cost of whole life insurance for a female child

*Illustrative accumulated cash value and death benefit for a $100/month, 20-pay participating whole life insurance policy issued to a healthy 5-year-old girl. Projected cash values and death benefits assume current dividend scales and are not guaranteed; the actual policy values may vary

Cost of whole life insurance for a male child

*Illustrative accumulated cash value and death benefit for a $100/month, 20-pay participating whole life insurance policy issued to a healthy 5-year-old boy. Projected cash values and death benefits assume current dividend scales and are not guaranteed; the actual policy values may vary

How much is life insurance per month for couples?

The cost of $500,000 in term life insurance for couples typically ranges from $33 to $550 per month for non-smoking couples and from $76 to $1,283 per month for smoking couples. Couples can choose between two individual life insurance policies or a joint life insurance policy, with the latter potentially offering lower premiums in certain situations. Joint policies also simplify policy management by covering both partners under a single contract. However, individual policies may provide greater flexibility and, in some cases, better value depending on the couple’s coverage needs.

Cost of life insurance in Canada for smoking and non-smoking couples