Dividends are a portion of the insurance company’s profits that are paid out to policyholders who own participating whole life insurance policies. Insurance providers may not guarantee dividends, but you can use them to lower your premiums, buy more coverage, or take them as cash if they are paid.

If you’re considering purchasing whole life insurance or if you already own a participating policy, understanding how dividends work could be a game-changer. In this blog, we are going to cover everything you need to know about dividends.

How do whole life insurance dividend rates work?

Whole life insurance dividend rates are determined by the insurance company’s financial performance in a given year. Dividends are usually a percentage of surplus profits returned to policyholders.

Dividend rates are influenced by three main factors: the insurer’s investment earnings, mortality claims (how many claims they pay out), and operational expenses.

• Investments: The company invests the money that it receives from policyholders into mutual funds, stocks, etc. If those investments perform well, the dividend rate is higher as there’s more profit to share among policyholders
• Claims: If fewer people make claims than expected, the company saves money, increasing dividend rates
• Operational expenses: If the company’s costs to run the business are lower, there will be more money left over to share with policyholders

Each year, the insurer evaluates its financial performance and announces a dividend scale. If you have a participating whole life insurance policy, you may receive a portion of the profits based on that scale.

Do whole life dividend rates fluctuate every year?

Yes, whole life dividend rates fluctuate every year. Dividend rates depend on the insurance company’s financial performance, which can change from year to year. 

If the insurance company earns strong investment returns, has fewer death claims, and manages to operate at a lower cost, the dividend rate might stay the same or even increase over time. However, if the investment returns are low or other costs go up, the dividend rate will drop.

Insurers typically announce their dividend rates annually. Some insurance companies may strive to keep their dividend rates steady over the years, but it is not always guaranteed.

Are whole life insurance dividends taxable in Canada?

Whole life insurance dividends are not taxable in Canada as long as they are not withdrawn. If you use your dividends to buy more insurance, reduce your premiums, or just keep them within the policy to grow over time, you generally won’t have to pay any tax on them.

However, if you choose to collect the dividends as cash or use them to generate interest in a side account, your whole life insurance dividend will be considered taxable as income.

What can you do with your whole life insurance dividend options?

When your whole life insurance policy earns dividends, you can use them to reduce premiums, pay off policy loans, or collect dividends as cash. You can also use your whole life insurance dividend options to participate in paid-up additions or leave it in a side account to accumulate additional interest. A side account is a separate account where dividends can be left to accumulate interest, typically at a rate set by the insurer.

• Paid-up additions (PUAs): In paid-up additions, your dividends are used to buy small amounts of additional whole life insurance coverage. These PUAs will increase both your death benefit and cash value, and they grow tax-deferred inside the policy
• Reduce premiums: You can use your dividends to lower or fully cover your future premium payments towards the insurance policy. This can make your policy more affordable in the long run
• Take the dividends as cash: You can also receive your dividends as direct cash payments. But keep in mind that cash dividends may become taxable once they exceed the value of premiums you’ve paid
• Leave dividends to accumulate with interest: Some insurers offer an interest-bearing side account where your dividends can sit and grow over time. The original dividend isn’t taxable, but the interest earned is taxable each year
• Pay off policy loans: If you’ve borrowed against your policy’s cash value, you can use your dividends to repay that loan. This helps restore your policy’s full value, and you can avoid any interest buildup

Which are the best dividend-paying whole life insurance companies in Canada?

In Canada, insurance companies such as Canada Life, Sun Life, Manulife, Empire Life, and Equitable offer participating whole life insurance policies that provide policyholders with guaranteed death benefits and additional cash value growth. 

Manulife Par

Manulife’s participating whole life insurance policy, known as Manulife Par, offers a minimum coverage of $100,000 for 10 and 20 years, with two dividend options: paid-up insurance and cash. 

During the current 2024-2025 period, the dividend rate for Manulife Par stands at 6.35%. Policyholders can also avail policy loans up to 90% of the total accumulated cash value.

Sun Par Protector II, Sun Par Accumulator II, and Sun Par Accelerator

Sun Life’s participating whole life insurance policy, Sun Par Protector II, Sun Par Accumulator II, and Sun Par Accelerator, provides permanent coverage with guaranteed cash values and death benefits. 

During the current financial year, the dividend rate for Sun Par policies stands at 6.25%. Sun Life offers four types of dividend options for the Par Protector and Par Accumulator plans:  paid-up additions, annual premium reduction, cash payment and interest-earning deposit. The Sun Par Accelerator plan offers PUA as the only dividend option for policyholders.

Canada Life Estate Select and Wealth Select

Canada Life’s participating whole life insurance policies, Estate Select, and Wealth Select offer guaranteed cash value with no maximum coverage.

During the current financial year, the dividend rate for Canada Life whole life insurance policies stands at 5.50%. Canada Life offers dividend options in the form of cash payment, premium reduction, paid-up additions, and enhanced coverage.

Empire Life EstateMax and Optimax Wealth

Empire Life offers two participating whole life insurance plans: EstateMax and Optimax Wealth. EstateMax focuses on estate protection, while Optimax Wealth emphasizes wealth accumulation with early cash values. 

Empire Life currently offers a dividend rate of 6.25% to its policyholders. The dividend options offered by Empire Life are: Enhanced coverage, paid-up additions, cash payment, annual premium reduction, and cash accumulation.

Equitable Life Equimax

Equitable Life’s participating whole life insurance policy offers lifetime protection with guaranteed premiums, cash values, and death benefits. It provides flexibility through options like life pay or 20-pay premium structures.

At present, Equitable offers a dividend rate of 6.40% to its policyholders. Furthermore, dividends can be collected in the form of paid-up additions, enhanced protection, or cash payout.

Dividend rates for the top whole life insurance companies in Canada

Can you predict future dividends?

No, future dividends on participating whole life insurance policies cannot be predicted with certainty. While insurers aim to maintain a stable overall performance so that they can offer stable dividends, it is not guaranteed. Dividends depend on multiple factors like investment returns, claims experience, and operating costs, and none of these can be predicted.

Each year, the insurance company’s board reviews the overall financial performance of the company to determine the dividend scale, which may increase, decrease, or remain the same.

How often are whole life insurance dividends paid out?

Whole life insurance dividends are generally paid out annually, usually on the policy’s anniversary date. 

If you have a participating whole life insurance policy that qualifies for a dividend, the insurance company will notify you and provide options for how the dividend can be used. You can choose from a variety of whole life insurance dividend options, such as purchasing additional coverage, reducing future premiums, leaving it to accumulate interest, or taking it as cash. 

While dividends are not guaranteed, they are one of the most lucrative features of participating whole life insurance that can increase the long-term cash value of your policy.

Do dividends increase the death benefit of a whole life insurance policy?

Yes, dividends can increase the death benefit of a whole life insurance policy when applied toward paid-up additions (PUAs). 

Paid-up additions are small amounts of fully paid permanent life insurance that are added to your base insurance policy. When you choose this dividend option, each year the insurer uses your dividend to purchase additional coverage. This immediately increases the policy’s cash value as well as the death benefit.

However, if dividends are used for other purposes, such as reducing premiums or taking cash, the death benefit of the whole life insurance policy will not increase.

What happens to dividends if I cancel my whole life policy?

If you cancel your whole life insurance policy, any accumulated dividends will automatically be included in the cash surrender value you receive. 

Dividends that were used to buy paid-up additions will become part of the policy’s total value. Similarly, if you choose to leave dividends on deposit to earn interest, the additional amount, including interest that you have earned, will also be returned.

However, if dividends were paid out to you in cash each year, you would not receive any additional amount during your final payout. Moreover, surrendering a policy may have tax implications, especially if the cash value exceeds the total premiums paid.

How to get the best whole life insurance quotes in Canada?

To get the best whole life insurance quotes in Canada, it’s essential to compare offerings from a wide range of providers. 

At PolicyAdvisor, we simplify your entire insurance buying experience! We’ve partnered with over 30 of Canada’s top insurance providers to give you access to the best life insurance policies available. Our smart, AI-powered tools and user-friendly life insurance calculator deliver accurate quotes in under 60 seconds!

Most importantly, our support doesn’t stop at the purchase. Also, our dedicated team of licensed advisors provides lifetime after-sales service to help you navigate any insurance-related questions or needs. Schedule a call with us today!

You can convert your term life insurance to whole life insurance as long as your policy includes a conversion option and you’re within the eligible conversion period.

As circumstances evolve, many policyholders choose to convert term life insurance to whole life insurance for lifelong protection and added benefits. 

In this article, we’ll explain everything you need to know about term life insurance and whole life insurance, including how to make the switch, when it makes sense, and what to consider.

Key differences between term life and whole life insurance

Term life insurance covers a set period, typically 10, 20, or 30 years. If you pass away during the term, your beneficiaries receive a death benefit. It’s simple, affordable, and ideal for short- to mid-term needs like mortgage protection or income replacement.

Whole life insurance, a type of permanent life insurance, covers you for your entire life and includes a cash value component that grows over time. Premiums are higher, remain fixed, and the policy builds equity you can borrow against.

The key difference between term life insurance and whole life insurance is duration and cost: term is temporary and cheaper, while whole life offers lifelong coverage and savings potential.

How can I convert term to whole life insurance?

Most term life insurance policies in Canada come with a term conversion rider or conversion options that allow you to switch your term policy to a whole life policy without a medical exam. This is especially valuable if your health has changed and you may no longer qualify for new coverage at standard rates.

Through this process, your temporary policy is converted into permanent coverage that never expires and includes a cash value component. The new policy can support long-term goals such as estate planning, legacy building, or retirement flexibility.

Insurers typically offer a range of permanent products for conversion, and you must act within a specific window, usually before a set policy anniversary or age limit, often 65 or 70. If you miss this window, converting term insurance to whole life won’t be possible without medical underwriting.

What is a policy anniversary?

A policy anniversary is the annual date that marks the anniversary of when your insurance policy became active. It’s usually based on the issue date or effective date of your policy, but not necessarily the date you signed the application.

Step-by-step process for converting term to whole life insurance

Converting term insurance to whole life can be a straightforward process, especially if your policy includes a built-in conversion option. Here are the key steps to follow for a smooth transition from term life insurance to whole life insurance:

Step 1 – Check your conversion window

Review your term life insurance contract to confirm it includes a term conversion rider. Most policies from Canadian insurers include this feature, but it’s important to verify the exact terms, eligible permanent products, and deadlines. Then, you must understand your policy’s conversion window. 

Most insurers allow you to convert your term coverage up to a certain policy anniversary or before a specific age. If you miss this deadline, you’ll lose the option to convert term to whole life insurance without new medical underwriting

Step 2 – Speak to a licensed insurance advisor

Schedule a call with our experienced advisors to help you understand which whole life insurance options are available through your existing provider. Insurers offer different conversion products, so it’s crucial to choose the best life insurance policy that fits your financial plan and goals

Step 3 – Start your new premiums

Here’s where you need to be prepared for a change in cost. Whole life insurance comes with higher premiums than term, but those rates are fixed for life and reflect the permanent nature and cash value features of the new policy

What is a term conversion rider?

A term conversion rider is a built-in feature in many term life insurance policies that allows policyholders to convert term insurance to whole life insurance without undergoing a medical exam. This rider helps protect your insurability if your health changes after your term policy is in place.

Here are the key features of term conversion riders:

• No medical underwriting required: You can convert your term life insurance to whole life regardless of changes in your health
• Available on most Canadian term life policies: Many major insurers include this feature automatically at no extra cost
• Limited conversion window: You must convert within a specific time frame, typically before age 65 or 70, depending on the insurer
• Access to permanent options: Most insurers offer a choice between whole life insurance, universal life, or term to 100 insurance when converting
• Same insurer requirement: You can only convert to permanent policies offered by your current insurance provider
• Maintains original health rating: The new permanent policy uses the same underwriting class as your original term policy, helping you avoid higher premiums

This rider is a key tool for switching from term to whole life insurance without the risks of reapplying or losing coverage due to health changes. It adds long-term flexibility to an otherwise temporary insurance product.

Is it worth converting term life insurance to whole life?

Whether converting term insurance to whole life is worth it depends entirely on your long-term financial goals, current life stage, and evolving insurance needs. For many Canadians, a term policy makes sense in the early years when affordability is key and the focus is on covering temporary obligations, like a mortgage, income replacement, or raising children. 

However, as you move into a different phase of life, you may begin to value permanent protection, especially if you’re thinking about estate planning, business succession, or leaving a tax-efficient legacy.

The benefits of converting term life to whole life insurance include lifetime coverage and cash value. This means that your beneficiaries are guaranteed a payout no matter when you pass away. The cash value component grows on a tax-deferred basis, which can be accessed later in life through policy loans or withdrawals. 

For example, a 45-year-old business owner with a 20-year term policy may want to convert part of their coverage to whole life insurance to fund a buy-sell agreement or leave a legacy for their children. Converting now locks in permanent protection while avoiding the risk of higher premiums or denial later due to future health issues.

When does switching from term to whole life insurance make sense?

Switching from term to whole life insurance can be a strategic decision, depending on your personal circumstances, financial goals, and health status. At PolicyAdvisor, our experienced advisors often recommend this move if you are looking for permanent protection and long-term planning advantages.

Here are some situations where converting term insurance to whole life may be the right choice:

• You’re approaching the end of your term, but still need coverage

As your term life insurance nears expiration, you may find that you still need protection to support dependents, cover outstanding debts, or ensure financial stability for your family. Converting to whole life allows you to maintain lifelong coverage without undergoing new medical underwriting

• Your health has declined, making new insurance expensive or unavailable

If your health has worsened since you first bought term life insurance, getting a new policy could be costly or even impossible. Converting your existing term policy to whole life ensures continued coverage based on your original health rating, with no new medical exams 

• You want to leave a guaranteed legacy or pay estate taxes

Whole life insurance is ideal for estate planning. It provides a tax-free death benefit that can be used to leave a legacy for heirs, fund charitable donations, or cover estate taxes, so your beneficiaries aren’t burdened with those costs

• You need the tax-deferred growth of a cash value policy

Whole life insurance builds cash value over time, which grows on a tax-deferred basis. This can be an attractive option if you’re looking to diversify your savings strategy, access funds later in life, or use the policy’s value for retirement planning or emergencies

How much does it cost to convert term life to whole life in Canada?

There are no upfront costs to convert a term life insurance policy to whole life insurance in Canada. However, you end up paying higher premiums after the policy conversion. Whole life insurance is significantly more expensive than term insurance due to its permanent coverage and built-in cash value.

For example, a healthy 40-year-old woman might pay around $35/month for a $500,000 term policy. If converted to whole life, that same coverage could cost approximately $340/month. The factors that affect this cost are: 

• Age at conversion: Premiums are based on your age at the time of conversion, not when you bought the policy
• Coverage amount: Converting more coverage results in higher premiums
• Policy type: Participating whole life policies (with dividends) are costlier than non-participating ones
• Partial conversions: Some insurers allow you to convert only a portion of your term coverage to help control costs

Choosing the best life insurance company in Canada depends on your financial goals and insurance needs. Whether you want to leave a legacy for your family, cover outstanding debts, or protect your business, having the right life insurance plan is crucial. However, with the number of players offering life insurance products, making the right choice can be hard. Each company has their own benefits and features that can suit different needs.

That’s why our licensed life insurance experts have reviewed and rated top Canadian providers to bring you our list of the 16 best rated life insurance companies in Canada. In this article, you will find honest insights on different life insurance providers and how they can meet your needs.

Which are the best life insurance companies in Canada?

Some of the best life insurance companies in Canada include Manulife, Canada Life, Desjardins, Empire Life, BMO, RBC, and more. However, depending on your needs, choosing the right one is important. 

Our advisors have created a list of the best life insurance companies in Canada. Combining years of expertise and the unique benefits that each company offers, we have curated a list of the top 16 life insurance providers.

Choosing the right insurance company

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. You should also look at added benefits for certain demographics such as business owners, doctors, and parents. If you are someone who has a pre-existing condition, you should consider companies that offer no-medical life insurance plans. 

A good indicator of any company is the claims settlement ratio. This is where you look at the ratio of claims received versus settled. A higher ratio is always a good indicator. 

Detailed ratings and reviews of the top life insurance companies in Canada

Best for Simplified Issue: Assumption Life

Our Assumption Life rating and review:

We’ve given Assumption Life Insurance Company 5 stars and rated them as the best life insurance provider for Simplified Issue policies. These policies do not ask you to do a medical exam, but may have some simple medical questions on the application.

Assumption Life offers 4 different types of non-medical policies, making them a great option for people who may have health issues. You can also get bigger amounts of coverage if you opt for full underwriting.

Unique selling point (USP): Wide range of non-medical policies designed for those looking to qualify without medical underwriting

Types of life insurance offered: Term life, whole life, guaranteed life

Pros: 

– Multiple term coverage options

– Simplified, non-medical issue options available

– Quick, easy electronic process

– Decreasing option available for mortgage coverage

Cons:

– Wide range of options can be confusing

– High policy and rider fees on non-medical policies

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Best for Combo Coverage: Beneva

Our Beneva rating and review: 

We’ve given Beneva Life Insurance 4 stars and rated them as the top provider if you want combined coverage. Their insurance products, riders, and features let you get a lot of different types of insurance in one place.

Beneva is rare in that they include an Extreme Disability Benefit for free in all of their life insurance plans. You get double the coverage than usual, and that’s unique!

Unique selling point (USP): Offers a built-in disability insurance rider with all life insurance policies. Simplified and guaranteed issue life insurance coverage offered in under 60 minutes for those in good health.

Types of life insurance offered: Term life, whole life, universal life, simplified issue life insurance (term and whole), guaranteed issue permanent life insurance

Pros: 

– A built-in Extreme Disability Benefit is unique in the industry

– Options to add critical illness and monthly disability indemnity for comprehensive financial protection

– Several optional riders: accidental death and dismemberment and children’s term coverage

– Preferred rates available starting at $250,000

Cons:

– Longer turnaround times for policy approval other than no-medical plans

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Best for Affordability: BMO Insurance

Our BMO Insurance rating and review:

We’ve given BMO Insurance 5 stars and rated them as the best company if you’re looking for affordable coverage. Most of their policies have good prices and can be used for multiple purposes.

BMO’s term life insurance is a great option for just about anyone — individuals, couples, or business owners. On top of their great pricing, their plans cover most of the standard features expected in a life insurance plan in Canada.

Unique selling point (USP): Offers a Performance Bonus with their whole life plans that is guaranteed to never be negative. All life insurance policyholders get access to BMO Insurance Health Advocate Plan—a comprehensive health counselling and personal assistance service.

Types of life insurance offered: Term life, whole life, universal life

Pros: 

– Great value for cost

– Can exchange 10-year term into longer term products

– Compassionate benefit program—death benefit advance in event of terminal illness

– Option to convert term policies to whole life without medical examination

– Electronic contract delivery

– Multi-policy discount available

Cons:

– No digital policy, only paper policies are issued

– Longer term life policies (25 and 30 year) are not renewable

– No online account

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Best for Financial Strength: Canada Life

Our Canada Life Insurance rating and review:

We’ve given Canada Life Assurance Company 4 stars and rated them as the top choice for financial strength. Which is to be expected considering they’re the biggest insurance companies in Canada.

Canada Life earns billions in annual premiums, with $396 billion in assets and a financial strength rating of A+ from A.M. Best. They’re extremely stable, and they have great life insurance policy options to boot.

Unique selling point (USP): Unique Business Protection Growth life insurance rider lets business owners add more coverage as their business grows. No maximum coverage limit on whole life policies

Types of life insurance offered: Term life, permanent life (participating whole life and universal life)

Pros: 

– Multiple term coverage options (5-50 years)

– Multiple rider options for single and joint policies

– Options to convert into permanent coverage

Cons:

– Minimum $100,000 coverage or $500 annual premium required

– Limited access to online account features

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Best for Non-Medical Policies: Canada Protection Plan

Our Canada Protection Plan rating and review:

We’ve given Canada Protection Plan 5 stars and rated them as the best provider for No-Medical policies. These plans do not ask you for a medical test or have medical questions, but usually cost a bit more.

Like Assumption Life, Canada Protection Plan also gives you great options if you’re looking for life insurance coverage without doing medicals. They have both simplified or guaranteed insurance policies available.

Unique selling point (USP): Multiple products offering simplified, no-medical coverage for applicants across all health categories. Most products are available through a quick, simple, online application without any medical tests

Types of life insurance offered: No-medical and simplified issue, term life, permanent life 

Pros: 

– Affordable premiums, including no-medical policies

– Available to temporary residents such as those on a student or work visa

– Most plans offer life protection

– Most products available through an easy online application without any medical tests

– Customers can pay annual premiums by credit card

– Decreasing term option available (ideal for covering mortgage debt)

– Digital e-policy

Cons:

– Premiums can be more expensive than competition

– Coverage ends at age 80 (most other Canadian providers end at 85)

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Best for Stability: Desjardins Insurance

Our Desjardins Insurance rating and review:

We’ve given Desjardins 4 stars and rated them as the best company for stability. Saying that they’re a well-established company would be putting it too mildly.

Desjardins is one of Canada’s top ranked life insurance companies and financial groups, one of the biggest and oldest providers, and one of the world’s 50 safest banks and financiers. Their term life products can meet a wide range of needs.

Unique selling point (USP): Offers no-medical life insurance to seniors aged between 50-75, a rare offering in the industry. Reduced premiums when purchasing two or more coverages

Types of life insurance offered: Term life, permanent life, life insurance over 50, participating life, universal life 

Pros: 

– Several optional riders and benefits

– Robust suite of critical illness, disability, and permanent life insurance available

– Multi-policy discount available

– Top 10 largest insurance company based on annual premiums

– Digital e-policy

Cons:

– Premiums can be more expensive than competition

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Best for Personalization: Empire Life

Our Empire Life rating and review:

We’ve given Empire Life 5 stars and rated them as the best insurer for personalization. They give you a lot of leeway to choose the options that work best for you.  This is flexible and affordable coverage that can suit many Canadians perfectly.

Their Solution series offers 10-year, 20-year-, or 30-year term insurance, or permanent insurance that covers you up to age 100. Or you can get an annual renewable term that lasts for 1-year increments.

Unique selling point (USP): A suite of life insurance products for all age groups and demographics—children, families, seniors, business owners, and those with pre-existing conditions. Solution 100 term policy has cash value (rare in the market)

Types of life insurance offered: Term life, permanent life, permanent participating life, no-medical life insurance

Pros: 

– Some of the most versatile coverage options in Canada

– Instant approval possible

– Highly competitive premiums

– Comprehensive rider options

Cons:

– Individuals above 75 years of age cannot purchase Empire Life whole life insurance policy

– Limited term options

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Best for Families: Equitable Life

Our Equitable Life rating and review:

We’ve given Equitable Life 4 stars and rated them as the best company for families.  They make it easy for you to add coverage for multiple people on one policy. This helps families save on fees and put some cash back in their wallets.

Unique selling point (USP): Great for a strategy called “laddering”, where you only pay for coverage as you need it. Reduced premiums when purchasing two or more coverages

Types of life insurance offered: Term life, whole life, universal life

Pros: 

– Options to bundle coverage with critical illness 

– Preferred clients automatically qualify for EquiLiving critical illness insurance

– Can create family plan by adding child term rider

Cons:

– Limited term offerings

– Equitable does not have a non-participating whole life insurance option to choose from

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Best for Giving Back: Foresters Financial

Our Foresters Financial rating and review:

We’ve given Foresters Financial 4 stars and rated them as the best company for giving back. Many of their products come with a unique perk: a charitable benefit feature where they will donate to a charity of your choice on your behalf.

Foresters is also a great choice if you have changing needs. Their term insurance is simple and straightforward, but they also have options that give you better coverage if your needs change in the future and you need insurance to match that.

Unique selling point (USP): Charitable benefit feature where Foresters will donate all or part of your death benefit to a charity of your choice. MyForester member benefits, including grants, scholarships, access to well-being programs, and more, for life insurance policyholders

Types of life insurance offered: Term life, whole life

Pros: 

– Multiple term coverage options 

– Simplified and quick fulfillment options available

– Unique community membership benefits (discounts on hotels, attractions, learning libraries, wills, gift cards, online shopping, etc.)

– $1,000 bereavement assistance with whole life plans to help beneficiaries cover counseling services upon the insured’s death

– Quit-smoking Incentive Plan offers lower premiums to those who stop smoking for at least two years after they buy a policy

Cons:

– Premiums can be more expensive than competition

– No online access to policy details

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Best for Quick Issue Options: Humania

Our Humania Assurance rating and review:

We’ve given Humania Assurance 4 stars and rated them as the best company for quick issue policies. Their main term life insurance product is designed to make it easy for you to get approved fast.

Humania’s policies usually don’t have many requirements. Most are done online and can be approved on the spot. They also let you choose coverage for multiple terms, up to a maximum of 30 years or until age 80.

Unique selling point (USP): Humania’s no-medical life insurance product has a unique eligibility criteria—working status. If an individual with a pre-existing condition is working, they are eligible for up to $300,000 of simplified issue term coverage

Types of life insurance offered: Term life, no-medical term life

Pros: 

– Competitively priced premiums

– Simplified and quick fulfillment options available

– Non-medical coverage options available

– Automatic approval for critical illness and debt disability coverage for those with standard health plans

– Digital e-policy

Cons:

– Limited life insurance product portfolio—no whole or universal life insurance is available

– Term coverage only available until age 80

– No online access to policy details

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Best for Flexibility: Industrial Alliance

Our iA Financial Group rating and review:

We’ve given Industrial Alliance (iA) 5 stars and rated them as the best for flexibility. They’re one of the few insurers that lets you customize your term length with their unique Pick-A-Term product.

You can pick anywhere between 10-40 years for term coverage with iA Financial Group, letting you match your term insurance with any specific number of years, like if you’re using life insurance to cover your mortgage.

Unique selling point (USP): Their Pick-A-Term product is rare in the market and lets individuals choose the length of their term life insurance. With Specialized life insurance, policyholders get an annual bonus that increases their death benefit 

Types of life insurance offered: Term life, permanent life, participating life, universal life, specialized life insurance

Pros: 

– Flexible plans allow personalized coverage

– Both level and decreasing options

– Non-medical coverage options available

– Optional disability rider — can be used with decreasing coverage for mortgage protection

– Digital e-policy

– Underwriting can be more accommodating than competitors

Cons:

– Premiums can be more expensive than competition

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Best for Layering: ivari

Our ivari rating and review:

We’ve given ivari 3 stars and rated them as the best provider if you want to do a layering strategy. Laddering is when you buy multiple term life policies that end at different times. You can terms of 10, 20, or 30 years with this company.

ivari makes it easy for you to get multiple policies that overlap, so you can create custom coverage that is just perfect for you. You can get just one term life policy, or you can combine policies with more terms or different types of insurance.

Unique selling point (USP): Excellent for layering or laddering multiple policies for extended coverage at affordable rates 

Types of life insurance offered: Term life, universal life, simplified and guaranteed issue

Pros: 

– Several optional riders, including children’s insurance

– Multiple term coverage options

– 30-year term has flexible options upon maturity

– Online access to account

– Digital e-policy

Cons:

– Premiums can be more expensive than competition

– No whole life insurance options

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Best for Digital Innovation: Manulife

Our Manulife rating and review:

We’ve given Manulife 5 stars and rated them as the best for digital innovation. This company almost needs no introduction. It’s one of the biggest insurers not just in Canada but in the entire world — an industry leader in every sense.

Manulife was one of the first companies to take more of the life insurance process online in Canada. Their underwriting uses advanced technology to approve up to $2 million in life insurance without needing a medical exam.

Unique selling point (USP): The Manulife Vitality program rewards policyholders for maintaining a healthy lifestyle. With Manulife Vitality, policyholders can get gift cards, discounts, and even an Apple watch!  

Types of life insurance offered: Term life, permanent life, guaranteed issue

Pros: 

– Immediate cash value growth and guaranteed cash value in the early years with their Manulife Par product

– Offers a fully electronic, digital fulfillment

– Offers cash advance in event of terminal illness

– Option to increase coverage up to 5th anniversary of certain term policies (rare in the market)

– Digital e-policy

Cons:

– Premiums can be more expensive than competition

– No non-participating whole life insurance options

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Best for Value For Money: RBC Insurance

Our RBC Insurance rating and review:

We’ve given RBC Insurance 5 stars and rated them as the best company if you want value for money. They have some of the most competitive premiums in the Canadian life insurance market.

RBC Insurance offers a best-in-class term life insurance product. They already beat the competition on price alone. And you can choose from different term lengths and coverage amounts.

Unique selling point (USP): Some of the best term products on the market at the most affordable premiums. Term exchange lets policyholders exchange a Term 10 policy with a Term 15, 20, or 30 policy without additional medical underwriting

Types of life insurance offered: Term life, term 100, whole life, universal life, guaranteed acceptance

Pros: 

– Affordable premiums — among the most competitive in the industry

– Max. coverage of $25 million

– Pick-a-term feature (rare in the market)

– Multiple rider options

– Five dividend options with their whole life plans, highest among Canadian insurers

– Digital e-policy

– Online access to account

– Quick, easy application process: just 10 questions for coverage under $1 million

Cons:

– Cash value is only accessible after 5 years for Growth Insurance policyholders

– No non-participating whole life insurance options

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The federal government’s proposed changes to capital gains taxes have received mixed reactions from the Canadian public and finance experts alike. While the conversations about the government’s proposal will continue to flash on our news screens, we’ve taken this opportunity to decode what the changes are and how they can impact corporations and individuals. 

What are capital gains?

Capital gains are the profit you make when selling a valuable asset. When you sell something of value—real estate, stocks, bonds, ETFs, bonds, cryptocurrencies, or  other investments—for an amount that is higher than the price you originally paid for it, the profit you receive is a capital gain. 

Currently in Canada, when you make a profit on the sale of an asset (other than your principal residence), half of that is counted as taxable income. Simply put, you pay taxes on 50 percent of your capital gain. 

The newly proposed changes to capital gains taxation are about to alter this. 

What is the inclusion rate for capital gains in Canada?

In Canada, the inclusion rate refers to the percentage of capital gains that are included in an individual’s taxable income for the year. Prior to the recent announcement, the inclusion rate for capital gains in Canada was 50 percent. This meant that only half of the capital gains are subject to taxation.

For example, if you have a capital gain of $500,000, only $250,000 of that gain would be included in your taxable income. The proposed alterations to capital gains taxes are about to change this.

What are the proposed capital gains tax changes?

The Canadian government had proposed to increase the capital gains inclusion rate from 50 percent to 66.7 percent for any profits above $250,000.

The increased inclusion rate was to come into effect from June 25, 2024, but it has been deferred. On January 31, 2025, the Canadian government delayed the implementation of the increased inclusion rate indefinitely.

They have cited the need for further analysis to ensure the policy aligns with their vision of fairness and economic growth.

Although this delay might come as a relief for Canadians, the policy could be enacted later. Individuals and businesses with significant capital gains should remain prepared with long-term strategies.

How will the changes in capital gains taxation affect individuals?

Individual taxpayers would continue to pay tax on 50 percent of their capital gains up to $250,000 even after the proposed changes would come into effect. For any capital gains beyond $250,000, the individual will have to pay taxes according to the new rate of 66.7 percent. Here’s a breakdown of what will happen before and after the revised inclusion rate is approved and implemented:

Before increase in inclusion rate: The rules don’t change—as an individual taxpayer, you will pay tax on 50 percent of your capital gains of up to $250,000.

After increase in inclusion rate: 

The new capital gains taxation rules will apply. While you will continue to pay tax on 50 percent of your capital gains of up to $250,000. Anything beyond that will be taxed at 66.7 percent.

Let’s understand with the help of an example.

John, an individual taxpayer, bought two assets worth $500,000 each in December 2022. He sold the former for $1,000,000 in January 2024 and he plans to sell the latter also for $1,000,000 in July 2024. 

Period 1 (Capital gains realized before increase in inclusion rate)

For the first asset:

• John’s profit, or capital gain, is $500,000
• He will be required to pay taxes on 50 percent of the capital gain which is $250,000

Period 2 (Capital gains realized after increase in inclusion rate)

And for the second asset:

• His capital gain is also $500,000
• Should the proposed changes come into effect, he will have to pay taxes on 50 percent of  the first $250,000 of capital gain i.e. on $125,000
• He will need to pay taxes on 66.7 percent of the remaining capital gain of $250,000 that is on $167,500
• So total amount of taxable income from the second sale will be $292,500

How will the changes in capital gains taxation affect corporations?

The proposed capital gains tax changes will increase the inclusion rate to 66.7 percent from 50 percent without a $250,000 limit for corporations. This means that regardless of the amount of profit on the sale of an asset, corporations will pay tax on two-thirds of their capital gains. 

The new rules can affect corporations eligible for the Small Business Deduction. Currently, small businesses making under $500,000 of business income qualify for lower tax rates. However, if a company earns over $150,000 from investments, it can lose this tax advantage. If the Capital Gains Inclusion Rate (CGIR) rises, companies might reach this $150,000 limit faster, resulting in fewer or no tax breaks, causing concern for them.

How do the proposed capital gains tax changes affect individual homeowners?

Any real estate (apart from your primary or principal residence) that you sell after the new inclusion rate comes into effect, will fall under the proposed capital gains taxation. This means that any profit that you make beyond the designated $250,000 will be taxed at 66.7 percent inclusion rate. 

To clarify, your principal residence, which is where you live for most of your life, is exempt from capital gains taxes. Regardless of how much you profit on the sale of your principal residence, you will not have to pay capital gains taxes on it. 

How does the proposed capital gains tax affect estate plans?

Reviewing estate plans is important following the Budget 2024 because it didn’t clarify if there will be exceptions for capital gains upon death, as per the proposed changes. Currently, when a taxpayer dies, all their assets are considered sold at market value, leading to capital gains taxes. This is called deemed disposition. 

With the proposed changes, these taxes on deemed disposition might also increase. Therefore, it’s advisable for individuals to reassess their estate plans considering the potential higher tax burden upon death.

What can you do to minimize losses due to these new rules?

While evading taxes is simply not an option and is a criminal offense, there are ways to legally pay the least amount of tax possible. These are:

• PPlan the sale of your assets before the revised inclusion rate is enforced to avoid the possibility of paying tax at the rate of 66.7 percent on your capital gains, should the proposed changes go through
• Hold your investments in a registered account such as the Registered Retirement Savings Plan (RRSP) or the Registered Education Savings Plan (RESP)
• Claim a capital loss to offset the capital gains. Since you don’t pay taxes on capital losses, you can use these to lower the amount of tax you owe on any capital gains. In fact, if your losses are more than your profits, you can use them to offset your capital gains for the past three years 
• If you own real estate but don’t have a principal residence registered with the Canada Revenue Agency (CRA), you can do that and claim an exemption from capital gains taxes

Can life insurance help offset the increased inclusion rate with the proposed capital gains changes?

Absolutely! Permanent life insurance is a non-taxable way to build and generate wealth over time. With permanent life insurance, policyholders can pay more than just the premiums. The additional funds are invested and continue to grow over time and generate cash value. 

Permanent life insurance policyholders also get additional benefits, including:

• Tax benefits for individuals: The cash value is tax-deferred—policyholders don’t need to pay taxes on the investment till they withdraw it
• Tax benefits for corporations: Business-owned permanent life insurance can help corporations avoid paying passive income tax rate, which in some cases can be as high as 50 percent. By investing in permanent life insurance policies, corporations can accumulate cash value on a tax-deferred basis, which can be accessed in the future to supplement income or fund business needs without triggering immediate tax liabilities
• Tax-free death benefit for individuals and corporations: The death benefit that beneficiaries receive is not taxable. If an appropriate amount of life insurance is purchased, it can also help cover the cost of the higher taxes

Life insurance and the proposed capital gains tax rate: An example

John and Emily own a primary residence and a rental property. Upon John’s passing his assets transfer to Emily. When Emily also passes away, the assets go to the children, but trigger a deemed disposition capital gains tax.

In this scenario, without adequate estate planning, the children might face challenges to pay the increased tax liability, such as needing a bank loan or selling assets to pay taxes. Life insurance could provide a solution. 

John and Emily could buy a life insurance policy with a death benefit equal to the projected tax-liability their children might incur upon inheriting the business. The new life insurance policy can provide the following benefits to the family:

• Liquidity: Life insurance could provide the necessary cash to cover the higher tax liability on the rental property, avoiding the need to sell the property
• Efficient tax settlement: By using the death benefit to settle the tax bill, John and Emily’s estate can preserve the rental property for the beneficiaries, maintaining its value within the estate
• Probate avoidance: Proceeds can be paid directly to the children, avoiding delays and expenses associated with probate, providing immediate financial relief
• Flexibility: Participating whole life insurance can be customized to cover a growing amount of the tax liability, providing precise financial protection for the estate
• Tax efficiency: The beneficiaries can receive the life insurance proceeds free from income tax, maximizing the value of the inheritance
• Peace of mind: By incorporating life insurance into the estate plan, John and Emily can ensure that their beneficiaries are financially protected and the estate distribution occurs smoothly, providing peace of mind for all involved

Read more about the tax implications of life insurance

We’re here to help! 

We know all of this can sound overwhelming, so we’re here to help. Our expert and licensed advisors will help you understand the impact of the new capital gains taxations on your assets. Schedule a call with us today! 

No one wants to talk about death, much less the topic of suicide. But when it comes to life insurance, it’s important to understand what is covered and what’s not. After all, the last thing anyone would want is for their loved ones to be left with financial hardships after they’ve passed on.

In this article, we will answer the question of whether life insurance covers suicide in Canada and what you can do if your claim is denied.

What does life insurance cover?

Most life insurance policies will pay a lump sum to beneficiaries if the policyholder dies from natural causes, terminal illnesses, accidents, murder, or other similar causes.

1. Natural causes

Life insurance covers deaths considered to be natural. This includes old age but also heart attack, stroke, kidney failure, cancer, and even COVID-19, among other infectious diseases.

2. Terminal or chronic illness

Life insurance plans will pay out if the policyholder dies from a terminal illness, even if it was a pre-existing health condition the person had before their policy started. Someone might have fewer (and far more expensive) coverage options with a pre-existing condition. But once the insurance company agrees to give them a policy, that policy will pay out if they happen to pass away due to their illness.

3. Accidental death

Beneficiaries still receive a payout if the insured person dies from accidental death or a tragedy such as a car accident, drowning, etc.

4. Murder

In most cases, life insurance companies will pay out if the policyholder is, unfortunately, murdered. But a big exception to this is if the policy beneficiaries or someone related is believed to be the culprit responsible or involved in the policyholder’s death.

5. Suicide

If it happens at least two or more years after the exact start date of either the contract/policy/coverage, the most recent reinstatement, or the most recent policy change that needed underwriting.

6. Illegal or criminal activities

Criminal activities can be anything that breaks the law. For instance, if someone is driving while under the influence and passes away in a car crash. Some forms of insurance can exclude covering individuals if they participate in illegal activities. But a life insurance policy doesn’t make this kind of exception — it will still pay out if the insured person happens to pass away while doing something that is against the law. 

7. Deaths due to drug or alcohol use

Likewise, life insurance will still pay out the death benefit if someone has a history of drug or alcohol abuse and, unfortunately, dies from an overdose or a related incident.

What does life insurance not cover?

Most life insurance plans do not pay out in certain situations, such as if the death occurs within the first two years of policy purchase, death involving hazardous activities, etc.

1. Deaths from suicide within the policy’s first 2 years

As per the life insurance suicide clause, death by suicide is not usually covered by life insurance if it happens within the first two years from the exact date the policy starts, the policy is reinstated, or a policy change that needed underwriting.

2. Deaths while engaging in hazardous activities

Remember how we also mentioned that your lifestyle affects your insurance premiums? Well, it can also affect the payment of benefits. For instance, if someone suffers an accident and passes away while doing something the insurance company considers risky, like skydiving or rock climbing, they may deny the life insurance claim and not pay benefits to beneficiaries.

But beneficiaries should not find themselves caught off guard by this. The insurance company would have had to tell the insured person that they wouldn’t be covered for death from dangerous activities at the time their policy starts. So, they would already know — and hopefully let their beneficiaries know too — that they would not get a death benefit if this were to happen.

Generally, life insurance is absolute for the most part. Once someone is approved for a policy, the death benefit will be paid out except for the two scenarios we mentioned above.

If the life insurance claim is denied, the company may or may not give back the premiums that had been paid up until that point. But it depends on the individual circumstance, and the way the insurance provider handles claim denials.

Does life insurance cover medically-assisted death?

Medical assistance in dying (MAID) may be considered its own special category by Canadian life insurance providers. Research and debate are still ongoing about whether MAID is considered suicide, since it’s only available for eligible individuals who are suffering from severe mental health issues.

For providers who consider medically-assisted death its own category, they will still pay the death benefit even if it’s before the 2-year period stated in the suicide clause.

But other providers consider it the same as death to illness. For instance, Edge Benefits refers to MAID as assisted suicide, but treat it as an illness-related death. So does Industrial Alliance (iA). Both of these providers would still provide a death benefit to an insured person in this circumstance.

Foresters does not consider MAID as suicide, but instead as its own category that will be covered. However, if it takes place during the 2-year period or contestability period, the company said it will check the medical reports very closely to make sure it’s not a false report before paying a claim.

So, different companies take slightly different approaches to this.

What to do if an insurance claim is denied because of suicide?

If a life insurance claim is denied because of suicide, it can be a particularly difficult time. However, it’s important to know that you have options. Here’s what you can do:

1. Review the policy. Before taking any action, it’s important to thoroughly review the deceased person’s life insurance policy and understand the terms of the policy. Check whether there was a suicide clause or other additional exclusions.
2. Contact the insurance company. If you believe the claim was denied in error, you can contact the insurance company and ask for an explanation of their decision. In some cases, and especially if you have new information to provide, you can also ask for a review of the claim.
3. Consider hiring a lawyer. The next step if you believe the claim was unjustly denied is to consider taking legal action. Many lawyers or other legal professionals specialize in life insurance claims and claim denial. They would be able to help you understand your legal rights and options, as well as guide you through the process of appealing the denial of your claim.
4. File a formal complaint. You can also file a complaint with an official body in your respective province, such as the Financial Services Commission of Ontario (FSCO). The FSCO and similar organizations are responsible for regulating insurance companies in each respective province. They also serve to help resolve disputes between policyholders and insurance companies.

It’s important to remember that if your life insurance claim is denied because of suicide, it’s not a reflection of your loved one’s worth or value. Rather, it’s a result of the terms of the policy and the insurance company’s interpretation of those terms.

Getting life insurance can be straightforward—unless you’re considered “high risk.” Whether due to a medical condition, a dangerous job, or an extreme hobby, insurers may see you as a liability, leading to higher premiums or outright denials. But does that mean you have no options? Absolutely not!

In this guide, we’ll break down everything you need to know about high-risk life insurance, including coverage options, costs, and the best insurance providers for high-risk life insurance in Canada.

Who is considered high-risk by insurance companies?

High-risk life insurance is designed for individuals who may struggle to qualify for traditional life insurance due to health conditions, dangerous occupations, or risky lifestyles. 

Insurers classify applicants as “high risk” when they have a higher chance of filing a claim earlier than average policyholders. This often results in higher premiums, stricter underwriting, or limited coverage options.

Insurance companies assess risk based on:

• Health risks
• Occupational risks
• Lifestyle risks

Who needs high-risk life insurance?

High-risk life insurance is essential for individuals who face challenges securing traditional coverage due to pre-existing conditions, certain occupational, or lifestyle factors. If an insurer considers you more likely to file a claim earlier than the average policyholder, you may need specialized coverage to protect your loved ones financially.

1. People with pre-existing health conditions

• Diabetes, heart disease, high blood pressure, or a history of cancer
• HIV-positive patients whose symptoms may/ may not have progressed to AIDS
• Chronic illnesses like kidney disease, multiple sclerosis, or respiratory conditions
• Obesity or other health concerns that impact longevity

2. Individuals in high-risk professions

• Firefighters, police officers, and first responders
• Construction workers, miners, and offshore oil rig employees
• Pilots, commercial divers, and truck drivers
• Registered nurses, healthcare providers, and radiology technicians
• Commercial fishermen, divers

3. Extreme sports and adventure enthusiasts

• Skydivers, scuba divers, rock climbers, and base jumpers
• Race car drivers, motocross riders, and extreme skiers
• Frequent travelers to war zones or politically unstable regions

4. Smokers and individuals with risky lifestyles

• Smokers, tobacco users, vapers, and recreational drug users
• Heavy alcohol consumers with a history of substance abuse
• People with dangerous hobbies or high-speed driving records

How do insurers determine if I’m a high-risk applicant?

Insurance companies assess risk factors by analyzing various factors, including:

• Medical history
• Age
• Lifestyle choices (such as smoking or extreme sports)
• Occupation
• Family health history

Individuals with chronic health conditions, hazardous jobs, or high-risk hobbies may face higher premiums or require specialized policies. Some insurers may also request medical exams or detailed health questionnaires to determine the insurance risk level.

Underwriting process for high-risk individuals

The underwriting process for high-risk profiles in life insurance is more rigorous than for standard applicants. Insurers assess these applicants based on medical history, lifestyle choices, occupational hazards, and financial risks.

• Application review: Insurers collect details on health, medical history, lifestyle habits (e.g., smoking, alcohol use), and occupation
• Medical underwriting: A medical exam may be required, including blood tests, ECGs, and physician statements for pre-existing conditions. Additional tests might be needed for high-risk cases
• Risk classification: Applicants are categorized as Preferred, Standard, Substandard, or Declined. High-risk individuals often fall into the Substandard category, leading to increased premiums or coverage exclusions
• Lifestyle and financial assessment: Insurers assess risky hobbies (e.g., skydiving, scuba diving), hazardous jobs, and financial history to prevent over-insurance or fraud
• Policy decision: The insurer may approve the policy with higher premiums, exclusions, or limited benefits, or decline the application altogether

Types of high-risk life insurance policies

High-risk individuals have several life insurance options tailored to their specific needs. The right policy depends on factors such as health status, occupation, lifestyle risks, and budget. Here’s a breakdown of the most common types:

1. Traditional life insurance

This is a standard life insurance policy that provides comprehensive coverage but comes with higher premiums for high-risk individuals due to the increased likelihood of claims.

• Requires a medical exam and a detailed assessment of health and lifestyle
• Offers higher death benefits and flexible coverage options
• Premiums are based on the individual’s risk level, with higher rates for those with medical conditions or high-risk professions
• Suitable for individuals who can still qualify despite certain risk factors

2. Simplified Issue life insurance

Simplified issue life insurance is designed for individuals who may not qualify for traditional life insurance but still want some level of coverage. It provides a balance between accessibility and affordability.

• No medical exam is required, making the approval process quicker
• Applicants must answer a short health questionnaire to determine eligibility
• Higher premiums compared to standard policies due to the reduced underwriting process
• Ideal for those with moderate health risks or who want faster approval

3. Guaranteed Issue life insurance

Guaranteed-issue policies are available to anyone, regardless of health status, making them an option for individuals who are unable to qualify for any other type of life insurance.

• No medical exams or health questions, ensuring approval for all applicants
• Typically has lower coverage limits (often up to $50,000)
• Includes a waiting period (usually 2 years) before full benefits are paid out
• Best suited for individuals with serious health conditions or high-risk lifestyles who have been denied other forms of coverage

Best high-risk life insurance providers in Canada 

Several Canadian insurance providers specialize in high-risk policies, including Canada Protection Plan, Manulife, Sun Life, Desjardins, and more. These providers offer tailored coverage to ensure you and your loved ones are protected.

• Canada Protection Plan (CPP): Specializes in no-medical and simplified issue life insurance, making it ideal for individuals with health concerns or those seeking quick coverage
• Manulife: Provides flexible underwriting and offers both term and permanent life insurance options for high-risk applicants
• Sun Life: Known for strong financial stability, Sun Life offers comprehensive policies that may accommodate individuals with higher risk factors
• iA: Offers a range of life insurance products, including options tailored for those with health risks or hazardous occupations
• Desjardins: Provides customized life insurance solutions, including coverage for individuals with unique risk profiles

How do I get the best high-risk life insurance quotes in Canada?

If you’re looking to find the best high-risk life insurance quotes in Canada, you might have to scan through a variety of options to find the best fit for your needs. This can get hectic and sometimes, you might even miss out on the best options! This is where PolicyAdvisor comes in.

With the help of our expert advisors, you can discuss your unique requirements and find the best coverage based on your current health status and risk profile. We will help you create a customized plan that can provide a financial safety net to your loved ones in your absence. 

Our advisors can also help you with any coverage-related queries before you make the final decision. Schedule a call with us today to discuss your options and find the best plan!

As your life changes, so do your financial responsibilities, and your life insurance should keep pace. Life insurance for different life stages helps you seek enough coverage to fund major life events. What works well in your 20s may not be sufficient in your 30s and 40s, and will certainly not address your retirement planning needs in your 50s and 60s.

This guide breaks down life insurance options for each stage of life, helping you determine the right coverage for your needs. You’ll learn how to make informed decisions that protect your loved ones and strengthen your financial security at every age.

What are the important life events that life insurance can fund?

Life insurance isn’t just for providing financial security after death—it can also help fund key life events like weddings, children’s education, retirement planning, etc. Term policies can be used for short-term goals. For example, if an individual has a 20-year mortgage, they can get a 20-year term policy to ensure the burden doesn’t fall on their loved ones.

Whole life policies offer cash value and dividends (only with par policies), suiting individuals looking to fund long-term goals.Here’s how life insurance for different life stages can help:

• Buying a home: Use accumulated cash value or death benefits to cover mortgage payments
• Children’s education: Life insurance can help fund college tuition and other educational expenses
• Starting a business: Borrow against the policy’s cash value to finance a business or ensure continuity in case of an owner’s passing
• Retirement planning: Certain policies, like whole or universal life, can supplement retirement income
• Medical emergencies: Some policies allow withdrawals for critical illnesses or unexpected medical expenses
• Family’s financial security: Ensures dependents are financially supported in case of the policyholder’s death
• Estate planning: Helps heirs cover estate taxes and inheritance costs

Life Insurance for kids (aged 0 to 17 years)

Life insurance for kids can help cover a child’s funeral costs and provide financial support during a difficult time. It can also secure a child’s insurability while they are young and healthy.

Coverage options

• Children’s term insurance rider: The simplest and most affordable way to get coverage for your child. This optional add-on is available with most life insurance policies and allows parents to cover all their children until they turn 25
• Children’s term life insurance: Covers your child for a set period (10, 15, or 20 years). This option can be converted to an adult policy without a medical exam
• Whole life insurance policy: Offers lifelong coverage for your child while accumulating cash value. This can later be used to help fund their education, start a business, buy a home, or support other financial goals

Life insurance for young adults (aged 20-39)

Life insurance may not be a priority in your 20s or 30s, but securing coverage early offers several advantages. By purchasing a policy while you’re young and healthy, you can lock in lower rates and ensure financial protection for your loved ones. Here’s why life insurance for young adults matters:

• Debt protection: Covers student loans, mortgages, and other financial obligations, ensuring your loved ones aren’t burdened
• Lower premiums: Younger applicants typically qualify for more affordable rates compared to those who apply later in life
• Long-term coverage options: Securing a policy early can provide extended protection through key life stages, such as buying a home or starting a family

Coverage options

For young adults, a 20 to 30-year term life insurance policy is often recommended. This duration aligns with major life milestones, such as student loans, kid’s education, and more

Alternatively, permanent life insurance (such as whole life or universal life) can offer lifetime coverage with a cash value component that grows over time.

Life insurance for middle-aged individuals (aged 40-49)

Life insurance can be essential during your 40s when you have a family to take care of, mortgage loans etc. It ensures that your loved ones are protected from financial hardships in the event of your passing. Here’s how life insurance can help you in your 40s:

• Income replacement: If you are the primary breadwinner, life insurance helps replace lost income, ensuring that your family maintains their standard of living
• Mortgage protection: A life insurance payout can help cover outstanding mortgage payments, preventing the risk of foreclosure
• Children’s education: Securing a policy ensures that funds are available for your children’s education, giving them financial stability for their future
• Debt coverage: Outstanding debts, such as loans and credit cards, can be settled through the insurance benefit, relieving your family of financial burdens

Coverage options

When selecting a life insurance policy, choosing the right coverage type is essential based on your financial goals:

• 20-year term life insurance: Ideal for individuals in their peak earning years, offering affordable premiums and coverage for critical financial responsibilities such as income replacement and mortgage payments
• Whole life insurance: Provides lifelong coverage with an added cash value component, making it a valuable estate planning tool and a source of financial flexibility

Life insurance for seniors (aged 50 and above)

When you’re in your 50s and 60s, retirement planning life insurance becomes extremely important. It can safeguard your financial legacy and provide for your family’s final expenses. You can also buy life insurance for your parents if they’re close to their retirement age. 

• Charitable donations: If you have a cause close to your heart, you can designate a charity as a beneficiary of your policy
• Financial legacy: Life insurance can also help ensure that your family members receive a financial inheritance, supporting their future needs
• Final expenses & debt coverage: Funeral costs, outstanding medical bills, and remaining debts can also be covered by a life insurance payout

Coverage options

If you’re looking for life insurance for seniors and retirees, it’s best to go for a 10-year term plan or a Guaranteed Acceptance plan, based on your needs:

• 10-year term policies: A good option for those seeking affordable coverage for a fixed period. These policies provide a payout to beneficiaries if the insured passes away during the term
• Guaranteed Acceptance plans: Ideal for individuals with health concerns who may not qualify for traditional life insurance. These policies do not require medical exams but may have higher premiums and a waiting period before full benefits apply

Comparing life insurance for different life stages

*Illustrated prices for male individuals of various age ranges, seeking a 20-year term plan with $250,000 in coverage

How do I get the best life insurance quote in Canada?

It’s advisable to have life insurance for different life stages. However, finding the best life insurance quote in Canada can be tricky, but not when you seek help from PolicyAdvisor. Our expert advisors provide personalized recommendations tailored to your needs, ensuring you get the right coverage at the best price. With access to 30+ top insurance companies, we help you compare the best policies in one place.

Our AI-powered calculator gives you an accurate quote in under 60 seconds, so you can make informed decisions instantly. With our lifetime after-sales support, we’re here to assist with policy updates, claims, and any questions you may have—every step of the way.

Schedule a call with our experts today and get instant life insurance quotes in Canada today!

A sample life insurance policy isn’t just a contract—it contains the details of everything that your policy has to offer, including coverage amount, beneficiary information, cost of premiums, payment schedules, exclusions, and claims processing. For a whole life insurance policy, you will also find information about the death benefit, the accumulated cash value, dividend structures, etc.

In this guide, we’ll break down the key sections of a sample life insurance policy in Canada to help you get to know your policy better and avoid claim rejections.

What are the different types of life insurance policies?

Life insurance policies essentially come in three types: term life insurance, whole life insurance, and universal life insurance. Different life insurance types are designed to meet different financial goals and coverage needs. 

• Term life insurance: Provides coverage for a set period (e.g., 10, 20, or 30 years). Although it is affordable, it expires if not renewed
• Whole life insurance: Lifetime coverage with fixed premiums and cash value accumulation
• Universal life insurance: Flexible premiums with an investment component, allowing cash value growth

What are the main components of a life insurance policy document?

A life insurance policy document includes some of the essential details such as policyholder information, coverage amount, premiums, beneficiaries, and exclusions, which apply to both term and whole life insurance. In addition to this, samples for participating whole life insurance policies will include details about the death benefit, cash value component, dividend strategies, policy loan options, and tax implications.

1. Policy summary page 

The policy summary page is the first section of a sample life insurance policy, offering a quick overview of the contract’s main details. It typically includes:

• Policyholder name: The person who owns the policy
• Insured person: The individual whose life is covered by the policy (sometimes different from the policyholder)
• Beneficiaries: Those designated to receive the death benefit
• Coverage amount: The lump sum payout that the insurer provides upon the insured’s death
• Policy type: Whether it’s term, whole, or universal life insurance
• Premium amount: The cost of maintaining the policy, along with the payment schedule (monthly, quarterly, or annually)
• Policy start date and expiry: For term life insurance, this indicates when coverage begins and ends
• Payout percentage allocations: If multiple beneficiaries are named, the policy specifies what percentage of the payout each will receive

2. Premium structure and payment schedule

The cost of your life insurance premium depends on various factors, including the policy type, the insured individual’s age, health, and lifestyle. This section outlines:

• Fixed vs. increasing premiums: Some policies offer fixed premiums, meaning the cost remains the same for the duration of the policy. Others have increasing premiums, especially term policies that renew after a set period
• Payment frequency: Premiums can typically be paid monthly, quarterly, semi-annually, or annually. Some insurers offer discounts for annual payments
• Grace periods and lapse protection: Most policies include a 30-day grace period, allowing you to make late payments before the policy lapses. If a policy lapses due to non-payment, you may have to undergo medical underwriting again to reinstate coverage.

3. Riders and add-ons 

Riders are optional benefits that enhance your policy’s coverage. While they add extra cost to your sample life insurance policy, they can provide significant financial protection. Common riders may include:

• Disability waiver of premium: Waives premiums if the policyholder becomes disabled and unable to work
• Accidental death benefit: Pays an additional sum if the insured’s death is due to an accident
• Critical illness coverage: Provides a lump sum payout if the insured is diagnosed with a covered illness (e.g., cancer, stroke, heart attack)
• Child or spouse insurance riders: Allows additional life insurance coverage for family members under the same policy
• Long-term care rider: Converts part of the death benefit into funds for long-term care if needed

4. Exclusions and limitations 

While life insurance provides financial security, certain circumstances may result in a delayed payout or claim rejection. Common life insurance exclusions may include:

• Death by suicide: If the insured dies by suicide within the first two years, most insurers will only refund paid premiums, not the death benefit
• Misrepresentation: If the insured provides false medical history or lifestyle information, the insurer may deny the claim
• High-risk activities: Deaths from extreme sports (e.g., skydiving, racecar driving) may not be covered unless an additional rider is purchased
• Illegal activities: If the insured dies while committing a criminal activity, the insurer may refuse to pay the death benefit

Two-year contestability period

Most policies include a two-year contestability period, meaning that if the insured dies within the first two years, the insurer can review the application for any misrepresentation or fraud. After this period, the policy is generally incontestable, except for fraud cases.

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5. Additional components in a participating whole life insurance policy

Apart from the main features found in both term and whole life policies, participating whole life insurance sample contracts contain additional information on guaranteed death benefits, cash value accumulation, loan options on the policy’s cash value, and tax implications.

• Guaranteed death benefit: This section specifies the fixed amount paid to beneficiaries upon the policyholder’s death
• Cash value accumulation: This outlines how a portion of premiums contributes to a growing cash value, which policyholders can access through loans or withdrawals
• Dividends and strategies: Policyholders may receive dividends, which can be used to reduce premiums, purchase additional coverage, or be taken as cash
• Policy loan options: This section showcases how policyholders can borrow against the accumulated cash value
• Tax advantages: This covers tax benefits such as tax-deferred cash value growth and tax-free death benefits for beneficiaries

Sample life insurance policies from top insurance providers

At PolicyAdvisor, we work with 30+ of Canada’s top life insurance providers. While their policy documents are structured differently, they typically give similar information. Here are some of the sample life insurance policies by our partner insurers:

• Manulife Level to 100 sample policy – One insured
• RBC Term 100 sample policy (whole life insurance)
• RBC YourTerm sample policy (term life insurance) 
• Sun Life term life insurance sample policy
• Empire Life Solution 20 sample policy
• Empire Life Guaranteed Life Protect sample policy (whole life insurance)

Key factors to consider when reviewing your life insurance policy

Before you finalize a life insurance policy, it’s crucial to understand some aspects, such as hidden charges and whether the named beneficiary for your estate is a minor. You should also read the documentation thoroughly to avoid any surprises later. 

• Hidden fees and costs: Watch for administrative charges, early surrender fees, and premium increases over time
• Naming a minor as estate beneficiary: Naming a minor or your estate as the primary beneficiary can lead to unnecessary delays in payout or even rejection
• Understanding the fine print: Look for specific exclusions, waiting periods, and conditions that relate to your situation and can affect the payout to your beneficiaries

How to customize your life insurance policy?

You can customize your life insurance policy by choosing the right coverage amount, selecting additional riders based on your unique needs, opting for the annual premium option, and keeping your beneficiaries updated

• Choose the right coverage amount: Calculate your desired coverage amount to cover lost income, debts, and future expenses
• Select the best riders: You can opt for add-ons like critical illness, disability waiver, or child coverage for higher protection
• Adjust premium payment options: Choose annual payments to enable a flexible premium structure for budget ease
• Review and update beneficiaries: Update your beneficiary information to avoid unwanted delays or claim rejections
• Consider cash value features: If you’ve opted for participating whole life insurance, use the policy’s accumulated cash value for loans, withdrawals, or premium payments

How to get the best life insurance policy in Canada?

Finding the best life insurance quote in Canada is easy with PolicyAdvisor. Our expert advisors offer personalized recommendations to match your needs, ensuring the right coverage at the best price. With access to 30+ top insurers, we make policy comparisons simple and convenient. 

Our AI-powered calculator delivers accurate quotes in under 60 seconds, helping you make informed decisions instantly. Plus, our lifetime after-sales support ensures seamless policy updates, claims assistance, and expert guidance.

Schedule a call today and get instant life insurance quotes in Canada!