What are the two main types of life insurance?

The two main types of policies are term life insurance and permanent life insurance. While we often spend more time showing the difference between term and whole life insurance, you can find succinct definitions below. While term policies are fairly straightforward, permanent insurance policies have many different types and subsets.

What is permanent life insurance?

Permanent life insurance (also known as whole life insurance) covers you for your entire life. Sometimes there is an investment or cash value component associated with your policy and its lump sum, tax-free payment. As the name suggests, permanent life insurance is best suited to protect ‘permanent’ or ‘lifelong’ needs such as estate tax liabilities, care for a disabled child or dependent, liquidity for closely-held businesses and even funeral expenses.

Does life insurance pay out for suicide?

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.

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Does life insurance cover suicide?

In most cases, life insurance policies will only cover death by suicide 2 years after the policy starts. If the insured person dies by suicide before that time, the insurance company will not give a cash payout to that person’s beneficiaries.

Just about every life insurance policy in Canada includes what’s called a “suicide clause“, which states this. But there can be rare exceptions. And in the case of medically-assisted death or medical assistance in dying, it’s not always so clear cut.

Most life insurance policies will not cover death by suicide within the first 2 years.

What’s a suicide clause?

A “suicide clause” is a standard part of most individual life insurance policies issued by Canadian insurers. It states that if the policyholder dies by suicide within a certain time frame, the insurance company will not make the death benefit payout to surviving family.

The suicide clause usually lasts for 2 years from the start of the policy. In other words, for the insurance company to agree to pay out for someone’s life insurance plan, that person must not die by suicide for at least the first 2 years after they signed up.

A life insurance suicide clause might look like this

“If any insured person commits suicide, whether sane or not, within 2 years of the effective date or reinstatement date of a coverage, the company’s obligations are limited to a refund of the premiums paid since the coverage’s effective date or reinstatement date.”
– Desjardins (sample policy wording)

How does suicide affect life insurance payouts?

What happens with a life insurance payout when someone dies by suicide depends on:

What kind of life insurance policy it was. Joint policies that are shared by two people would be handled differently than if there was just one person on the policy.
When the suicide takes place. If it was during or after the suicide clause.
The insurance company’s own rules. Your policy wording will normally state exactly how your provider would deal with a death by suicide.

In case of death during the suicide clause period

If someone dies by suicide before the two-year period of their life insurance suicide clause is up, the company will not pay the death benefit.

However, some Canadian providers will refund any premium payments that had been made towards the policy up until that time. For example, providers like Desjardins and Empire Life both state in their policies that they will return payments made or the policy’s cash value if the insured person dies by suicide before the 2-year period is up.

On the other hand, some providers might deduct surrender fees or other penalty costs. In this case, they may refund premiums paid up until that point but only after subtracting the amount of fees from it first.

In case of death after the suicide clause period

Once the two years stated in the clause are up, the life insurance policy will function as normal. The provider will pay out if the individual passes away for any of the typical covered reasons, including suicide. You can see a list of the typical reasons below.

For joint policies

Joint policies are usually bought by couples. They cover two or more lives and can either bea joint first-to-die or a joint last-to-die policy.

Joint first-to-die: The policy pays out when the first person dies.
Joint last-to-die: The policy pays out only after both people have died.

If someone with a joint last-to-die policy dies by suicide before the two-year suicide clause period is up, there will not be any change to the policy. The surviving policyholder will still be covered as usual.

Joint first-to-die is a bit more complex. The life insurer could simply refund any money paid toward the policy up until that time, as in other cases. Or, they could give the surviving person the choice to change the policy to joint last-to-die.

For instance, Industrial Alliance (iA) is one Canadian insurance company that provides this option. Its suicide clause is fairly extensive, and it states that it will change the type of policy to joint last-to-die PLUS recalculate premium costs based on the surviving person’s age.

This could leave the surviving partner paying much heftier costs than before, and just goes to show how complicated the impact of suicide on life insurance can be.

How does life insurance work?

Life insurance, very simply, is an agreement between you (the policyholder) and an insurance company. Under this agreement, you pay a certain fee (premium) to the insurance company every month or year. In turn, when you pass away, the insurance company will give a one-time, tax-free lump sum payout to whoever you named as your beneficiary or beneficiaries. Most people name their family members as their beneficiary — usually a spouse, child, sibling, or other close relative.

Life insurance costs depend on factors like age, sex, health, medical history, and lifestyle, among other factors. It also depends on the types of life insurance purchased — for instance, term life insurance or permanent life insurance. And, it is possible for someone to be denied life insurance if the company considers them too much of a risk.

A life insurance payout is referred to as a death benefit because the policyholder must pass away before the payment will be given to their beneficiary. But this payment can be used however the beneficiary sees fit. They can use it to help cover expenses like funeral costs, mortgage payments, and outstanding debts. Or, they could use it to take care of kids, pay for college tuition, maintain a certain lifestyle, or even travel the world. At the same time, a life insurance payout is not always guaranteed.

Life insurance doesn't cover every situation. There are some exclusions and limitations for things like death by suicide within a certain timeframe.

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:

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.
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.
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.
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.

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 deaths by suicide, life insurers will usually look into the cause of death. This may include reviewing medical records, checking with law enforcement reports or police records, or even talking to family members or friends. After their investigation is done, they will determine whether the death benefit is payable or not.

Does life insurance ever pay out for suicide?

Deaths by suicide can be covered by life insurance companies in some cases, but it depends on several factors. As we said, suicide is a sensitive matter and there are many factors to take into consideration, even with a suicide clause in place.

Canadian life insurers may make special consideration if the life insurance policyholder was known to have suffered from mental health issues for a long time, and if the insurance company believes the individual was not of sound mind at the time of their death.

We always recommend reading the actual wording of your insurance policy to know exactly what will and will not be covered by your insurer. But we know it can be complicated to understand how things will play out if something unexpected happens.

If you have questions about your life insurance coverage, you can always speak with our insurance experts.

What other factors could affect whether insurance companies pay out for suicide?

Aside from the suicide clause, some other factors that may affect whether an insurance company pays out for suicide in Canada include:

Age and health status at the time of death
Mental health history
Prior suicide attempts
Alcohol/substance abuse history
Recent changes in behavior or circumstances (such as job loss, divorce, etc.)

What are other reasons why life insurance wouldn’t pay out?

There are several reasons why a life insurance policy may not pay out in Canada. Some common reasons include:

1. Suicide clause:

As mentioned earlier, most life insurance policies in Canada have a suicide clause that states they will not pay out in the case of suicide within the first 2 years of the policy.

2. Misrepresentation:

If the policyholder provided false information on their life insurance application, the policy may be declared void and the insurance provider may refuse to pay out.

3. Non-payment of premiums:

If the policyholder does not keep up with their monthly or annual payments for a long period of time, the policy may lapse. This could be grounds for denial of a claim.

4. Dangerous activities:

An insurance company may not pay out if someone with extreme, dangerous hobbies like skydiving or bungee jumping unfortunately passes away while doing one of these risky activities.

5. Contestability period:

Most traditional life insurance policies have what’s called a contestability clause or contestability period, which is usually 2 years. During this period, the insurer can investigate and deny a claim if it’s found that the covered person was not honest on their original life insurance application.

These are all more reasons why it’s so important to read through your insurance policy and understand the terms and conditions before you decide to buy.

If you need any help with reviewing an insurance policy to find out exactly what’s covered and what’s not, or for help with finding the right policy for your needs, you can always speak with the friendly insurance agents at PolicyAdvisor. We’d be happy to provide tailored guidance to make sure you have the best insurance policy for you and your family.

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What is Life Insurance and How Does it Work in Canada?

About one-third of Canadians are currently without life insurance and 1 in 4 millennials in the country admit they are unlikely to purchase any kind of insurance in the near future.

The basics of life insurance are just not on our radars. So if you thought ‘Term to 100’ was the title of a Drake song, don’t be embarrassed, you’re not alone.

Life insurance 101 isn’t common knowledge in Canada, which is exactly why it’s a subject worth exploring, especially if you’ve increasingly found yourself in the company of real estate agents, in-laws, or babies.

But where to begin? Is a death benefit a charity concert? Does “participating insurance” come with a ribbon? Is “return-of-the-premium” a new Star Wars flick?

Let’s just start with the basics…

What is life insurance?

Life insurance is an agreement between you and a life insurance company. The agreement is if you die, they will pay a death benefit (a lump sum of tax-free money) to someone you choose. In exchange, you agree to periodically pay them an insurance premium: a small amount of money over time.

You both decide on the amounts of cash coming in and out and the timeframes involved, but in a super simplified form, that’s really it.

How does life insurance work?

Life insurance provides financial protection to your loved ones in the event of your death. There are four key aspects of how life insurance works:

Agreement and premium payments: Life insurance is a contractual agreement between an insurance company and a policyholder. The policyholder pays monthly or annual premiums, and in return, the insurer agrees to pay a death benefit to the beneficiaries in the event of the policyholder’s death
Beneficiary designation: Policyholders can designate both, primary and contingent beneficiaries. Minors cannot be named as primary beneficiaries
Claim process: Upon the policyholder’s demise, the beneficiaries can file a claim process with the insurer by submitting essential documents. Once the documentation is verified, the insurance company will pay the lump sum death benefit to the primary beneficiary
Living benefits: Some permanent life insurance policies such as whole life insurance allow the policyholder to access a portion of the death benefit during their lifetime. This is known as cash value

What does life insurance cover?

A life insurance policy payout can be used by the beneficiaries in any way they want to, including for:

Funeral and burial expenses
Replacing lost income
Covering outstanding debts
Funding your children’s education
Covering everyday living expenses

Life insurance terminology

Here are some handy definitions for common life insurance terminology:

Term	Definition
Policyholder	The person who owns the life insurance policy
Insured	The individual whose life is covered by the policy
Insurer	The company that provides life insurance coverage
Premium	The amount paid regularly to maintain the policy
Beneficiary	The person or entity designated to receive the death benefit
Death benefit	The amount paid to beneficiaries upon the insured’s death
Cash value	The savings component of a permanent life insurance policy that grows over time
Policy term	The length of time the insurance coverage is in effect
Riders	Additional provisions that can be added to a policy to customize coverage

What are the different types of life insurance in Canada?

There are two main types of life insurance:

Term life insurance, which lasts for a period of time called a term
Permanent life insurance, which covers you for the rest of your life

Most Canadians wind up with term insurance, either through individual plans or through their employer as a group plan.

Learn more about the different types of life insurance.

Term life insurance

Term life insurance makes the promise if you die, we’ll pay, but only if that were to happen within a specified period of time, or ‘term’. These terms are generally 10, 20, or 30 years, but you can choose smaller or larger term lengths or coverage that last until a specific age.

Whole life insurance

Whole life insurance covers you for your entire life and there is a cash value associated with your policy. Sometimes, whole life policies will also pay dividends based on the insurance company’s profits. This is known as participating insurance.

Limited-pay whole life insurance

Limited-pay insurance is similar to whole life, except the payment plan is condensed. For example, the term could be 20 years: once you’ve paid your premiums over that 20-year period, your insurance is guaranteed for life and you’re off the hook for premiums. This type of coverage is typically the most expensive policy option. This is because premiums are front-loaded to offset the years where you will no longer be paying.

Universal life insurance

Universal life insurance is the same as whole life insurance, except you have more choice of where your cash value is invested. If you’re a savvy investor, this gives you the opportunity to generate a larger return than what is guaranteed from a traditional whole life policy. That said, it requires you to actively monitor the investment choices you’ve made with the cash value. Alternative investment solutions may help you achieve your financial goals faster.

Term to 100 life insurance

Even though the word term is in the name, term to 100 is a whole life insurance policy that covers you until your death. The difference is with this policy there is no cash value or investment component, making the premiums a little cheaper. As a bonus, if you do live beyond age 100, you are no longer required to pay premiums and retain your coverage. Term to 100 life insurance policies are unique to Canada.

Annual renewable term life insurance (ART)

A less popular life insurance option, annual renewable term life insurance (ART) is designed for those looking for short-term life insurance coverage. ART is available on an annual basis with the possibility of renewal and can protect people who are between jobs, who want to improve their health before locking in a longer-term policy, or those with short-term debt.

More choice. Lower price.

PolicyAdvisor saves you time and money when comparing Canada’s top life insurance companies. Check it out!

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Is life insurance worth it?

If you have dependents, life insurance premiums are worth the cost. Life insurance provides peace of mind knowing that your family will be taken care of financially when you pass away.

If you don’t have dependents, there could be other circumstances where the benefits of life insurance is worth the price of premiums. These can include:

Taking advantage of your youth and health to ensure a lower premium and future insurability
Providing a charitable gift to your favorite cause or organization
Leaving a financial gift or legacy to children or grandchildren, regardless if they are dependents or not

When should I buy life insurance?

Life events create the need for life insurance. Buying a home, having children, and getting married are good indicators that there are those in your life who depend on your income to maintain their quality of life. Premiums rise as you age, so purchasing insurance earlier in life can save you money.

Do I need life insurance?

Perhaps a better question is, do the people in your life need it?

Insurance is for clearing out debts (personal or business-related) and supplying an income replacement source to someone who relies on you because you’re no longer around.

Buying life insurance lets you secure assets for your family’s future by investing in an alternate income source. Without life insurance and the security of this death benefit, you’re putting all your family’s financial eggs in one basket: you, being alive and able to earn an income.

You may assume you have life insurance through your work’s group benefits, but such policies require a close look to ensure it covers everything you need.

Does life insurance have cash value?

Permanent life insurance policies accumulate a cash value as the insurance companies invest your premiums. Policies such as whole life and universal life insurance have this investment feature. You can either cash it out, save it, loan against it, or apply the value to your existing policy.

Learn more about the cash value of life insurance.

Call 1-888-601-9980 to speak to our licensed advisors right away, or book some time with them below.

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How much does life insurance cost?

The cost of life insurance depends on several individual factors. For most young, healthy adults life insurance costs are quite reasonable on a 20-year term policy.

For instance, a 30-year old, non-smoking Ontario woman of average health, would only pay $21 per month for a $500,000 death benefit on a 20-year policy. If you’re personalizing your insurance policy so that it suits your specific needs and budget, life insurance can and should be affordable.

Coverage	10-Year Term	20-Year Term
$250,000	$11/month	$14/month
$500,000	$15/month	$21/month
$1,000,000	$23/month	$36/month

Premiums for female, non-smoker, 30-years old

Personal factors affect your life insurance cost. Factors include:

Age: Insurance premiums rise in cost as you age.
Smoking Status: Smokers pay more for life insurance.
Gender: Generally, men have higher life insurance premiums than women.
Health: Insurance providers see health problems as adding to the risk of insuring you.
Family Medical History: Insurance providers also calculate the risk of known hereditary illnesses.

Details of your life insurance policy will also affect the price of your monthly premium. These aspects include:

Term Length: The longer your coverage period, the higher the premiums.
Coverage Amount: A larger death benefit will also dictate higher insurance premiums.
Type of Insurance: Term life insurance is less expensive than whole life insurance.

What are life insurance premiums?

Life insurance premiums are the amount of money you agree to pay the insurance company, usually monthly or annually, in order to receive coverage. The higher your age, the longer your term, or the larger your death benefit, the higher your premiums will be.

How much life insurance do I need?

You should get as much life insurance as you can afford. Most wish to leave a multi-million dollar fortune to their family and loved ones when they die. But that’s not financially realistic for most.

Determine what “affordable premium” means to you. Build a budget to assess your family’s current financial needs, their future needs, your current liabilities and debts, and any costs associated with your death. That’ll reveal what kind of coverage amount you should aim for and the costs associated with it.

Some use the 10x your annual income rule, but we highly recommend using our life insurance coverage calculator to get a quick but comprehensive recommendation.

Should I get life insurance through work?

Getting life insurance through work can be a convenient and cost-effective option, but it’s important to consider your specific needs and circumstances. Here are a few points to help you decide:

Employer-provided life insurance is often easier to obtain and may come at a lower cost since it’s typically part of a group plan. The premiums are often subsidized by your employer, making it an affordable option
While convenient, the coverage amount offered through work might be limited, often equating to one or two times your annual salary. This may not be sufficient to cover all your needs
One of the downsides of employer-provided life insurance is that it’s not always portable. If you change jobs or lose your job, you might lose your coverage. Having a separate individual policy ensures that you maintain coverage regardless of your employment status

What happens to a term life insurance when it expires?

When your insurance policy expires you have several options. Typically you

can convert a policy to whole life coverage
renew the policy at a higher premium
apply for a brand new life insurance policy
let the coverage expire if you no longer need it

Learn more about what to do if you outlive your term life insurance policy.

Can I renew a term insurance policy?

Most term life plans come with a renewability clause, that lets you extend your coverage upon expiry without having to redo your medical exam.

The downside of renewing your coverage is the cost: your premiums are reassessed (increased) to match your older age. Thus, some Canadians prefer to apply for a new insurance policy at the end of the term.

What personal information do I need to share with my insurance company?

Life insurance companies have a mandatory set of questions they ask during the underwriting process. They include:

your gender
your age
where you live
whether you smoke
your physical health history (cancer, diabetes, high blood pressure, sleep apnea)
your mental health history (anxiety and/or depression, bipolar disorder, other mental health conditions)
your family’s medical history
how much you drink
your history with drugs
your passion for extreme sports
how dangerous your job is

Based on your answers to these questions, you’ll be placed into a risk category and offered premiums accordingly.

Additional in-person medical exams will be required from time to time, especially when applying for larger coverage amounts.

Learn more about how to prepare for a life insurance medical exam.

What is an attending physicians statement?

The provider may also ask for a health report (called an attending physicians statement or APS) from your family doctor or any specialists you see about ongoing health conditions.

Who should you name as your life insurance beneficiaries?

Your beneficiaries are those you name in your policy that receive the death benefit when you die. It’s important to list the right people so that your policy’s payout is used as you intended. If you do not name a beneficiary or there is ambiguity at the time of your death then probate can affect your life insurance benefit.

Are there different types of beneficiaries?

Yes, there are revocable and irrevocable beneficiaries.

Revocable Beneficiary: a beneficiary that can be changed without their consent.
Irrevocable Beneficiary: a beneficiary that has to sign off on any changes to the policy, including coverage and beneficiary changes.

Should you name your children as beneficiaries?

In Canada, minor children cannot legally receive the funds from a life insurance policy until they reach the age of majority. Thus, many people create a trust to manage the funds of life insurance death benefits meant for their children.

A trust is an estate planning tool that allows you to choose another party (the trustee) to manage financial assets for a beneficiary until a pre-determined time or when they reach the age where they can legally manage their own funds.

Learn more about managing life insurance benefits with a trust.

Who needs life insurance in Canada and why?

Canadian life insurance can help different people with varying circumstances, like:

Couples: Life insurance is important for couples, as it ensures that one partner’s death doesn’t create a financial burden for the surviving partner. It can help cover living expenses, debts, and future financial goals
Business owners: Business owners should consider life insurance to protect their business interests. It can provide funds for succession planning, cover outstanding business debts, and help ensure the business continues smoothly in the event of their death
Seniors: Seniors may need life insurance coverage to cover final expenses, such as funeral costs, and to leave a financial legacy for their heirs. It can also help with estate planning and ensure that the estate is not burdened with unexpected costs
Parents with young children: Parents with young children should consider life insurance to secure their children’s financial future. It can help cover education costs, daily living expenses, and ensure that their children are cared for financially in their absence
Single individuals: Single individuals without dependents may still benefit from life insurance. It can help cover personal debts, funeral costs, and leave a financial gift or charity donation
Professionals with high incomes: High-income professionals often have significant financial responsibilities and goals. Life insurance can help protect their income, ensure the continuation of their lifestyle for their family, and address any large debts or estate taxes
Parents with adult children: Parents with adult children may want life insurance to provide a financial cushion or to leave an inheritance. It can also help with estate planning and cover any remaining debts
Individuals with significant debts: If you have substantial debts, such as a mortgage or student loans, life insurance can ensure that these debts are paid off and don’t become a burden to your loved ones

Should I add life insurance riders to my policy?

A life insurance rider is an optional feature added to your life insurance policy to better address your unique insurance needs. An insurance rider typically requires an additional payment which is added to your monthly premium, though some riders may also be included at no extra cost. There is a wide range of available riders. Common riders include additional term riders, critical illness riders, and guaranteed insurability.

Learn about life insurance for riders or read more about:

Which is the best life insurance policy?

The life insurance policy you should choose isn’t an answer in the back of the book. Life insurance is a deeply personal purchase and there are a lot of factors to consider. Not only should you factor in your family’s current financial needs, but you should also account for future costs like tuition fees, funeral arrangements, estate taxes, and any other debts or obligations you would want settled should you die. There a lot of options to choose from and a myriad of coverage combinations when you search for life insurance quotes. But, you should only purchase a policy you can afford and that you’re confident makes the most sense for you and your family.

Luckily, we’ve built a pretty great tool that can help you figure that out.

Head to our life insurance calculator, learn more about the best term life insurance or best whole life insurance in Canada, or check out the ratings below.

Term Life Insurance Company	Rating
Assumption Life	★★★★★
Beneva	★★★★
BMO Insurance	★★★★★
Canada Life	★★★★
Canada Protection Plan	★★★★★
CIBC Insurance	★
Desjardins	★★★★
Empire Life	★★★★★
Equitable Life	★★★★
Foresters Financial	★★★★
Humania	★★★★
Industrial Alliance (iA)	★★★★★
ivari	★★★
Manulife	★★★★★
RBC Insurance	★★★★★
Sun Life	★★★
Wawanesa	★★★★

Should I get life insurance for my children?

As a parent or grandparent, there are benefits to purchasing a life insurance policy for your child or grandchild. Life insurance for children ensures future insurability for your child, regardless of health issues. The policy also offers an effective way to build wealth and can be an attractive alternative to Registered Education Savings Plans (RESPs).

Do you need insurance to travel to Canada?

Certain visas that allow for travel or stays in Canada do require insurance coverage. Super visa insurance is mandatory for those seeking approval for their super visa status. While other visitors to Canada need insurance, it is not mandatory for entrance into the country.

Frequently asked questions

What does life insurance cover?

Life insurance provides a death benefit to your beneficiaries, which is typically tax-free. It can cover expenses such as funeral costs, outstanding debts, income replacement, education costs, and estate taxes, helping to ensure financial stability for your loved ones.

How does a term life insurance policy work?

A term life insurance policy offers coverage for a specific period, such as 10, 20, or 30 years. If the insured dies during this term, a death benefit is paid to the beneficiaries. If the term ends and the insured is still alive, the policy expires unless renewed or converted to a permanent policy.

How does life insurance payout work?

When a policyholder dies, beneficiaries file a claim with the insurer, providing a death certificate and policy details. Once the claim is approved, the insurer pays out the death benefit, usually as a lump sum, though other payout options may be available.

Why life insurance?

Life insurance ensures your loved ones are financially protected if you pass away. It helps cover living expenses, pay off debts, fund education, and manage estate planning, providing financial security for your family.

How to use life insurance while alive in Canada?

In Canada, permanent life insurance policies can offer access to cash value through loans or withdrawals. Some policies may also include riders for terminal or critical illnesses. You can also surrender the policy for its cash value, though this will end the coverage.

What are the tax implications of life insurance in Canada?

In Canada, life insurance death benefits are generally tax-free for beneficiaries. Permanent policies with cash value grow tax-deferred, but withdrawals or loans may be taxable if they exceed the premiums paid.

Employer-paid group life insurance is considered a taxable benefit to employees. If owned personally, life insurance bypasses probate, but corporate-owned policies may have tax implications.

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Life insurance for high-risk individuals in Canada

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.

Call 1-888-601-9980 to speak to our licensed advisors right away, or book some time with them below.

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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

Learn more about scenarios where life insurance in Canada will not pay out

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

Take a look at the best life insurance companies in Canada in 2025

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

Simplified issue or Guaranteed issue? Explore the best option for your needs

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!

Frequently asked questions

Can I switch from high-risk life insurance to a standard policy later?

Yes, many insurers allow policyholders to transition from a high-risk policy to a standard one if their risk factors improve. For example, if you quit smoking, manage a chronic illness effectively, or move to a safer occupation, you may qualify for lower premiums.

Are there waiting periods for high-risk life insurance policies?

Yes, certain policies, particularly guaranteed issue life insurance, come with a waiting period—typically one to two years—before the full death benefit is payable.

If the policyholder passes away within this period, beneficiaries may only receive a return of premiums paid or a reduced benefit. However, simplified issue life insurance may offer immediate coverage, unless there are additional clauses laid down by the insurance provider.

Can I get high-risk life insurance if I have been previously denied coverage?

Yes, being denied coverage in the past does not mean you cannot obtain life insurance. Many providers, such as Canada Protection Plan and Manulife, offer guaranteed issue or simplified issue policies that do not require a medical exam and have more lenient underwriting.

While premiums may be higher and coverage amounts lower, these policies ensure that individuals with pre-existing conditions or other risk factors can still secure life insurance.

Will my high-risk life insurance premiums ever decrease?

In most cases, premiums for high-risk life insurance remain fixed for the duration of the policy. However, if your risk profile improves significantly—such as through improved health, lifestyle changes, or career adjustments—you may qualify for a new policy with lower rates.

What to do if you’re denied life insurance coverage as a high-risk individual?

If an insurer denies your life insurance application, request the reason and check for errors. Improve your health, quit smoking, or manage medical conditions before reapplying. Consider simplified-issue or guaranteed-issue policies that skip medical exams. Work with an insurance broker such as our liscenced professionals at PolicyAdvisor to find specialized high-risk insurers.

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Life insurance for different life stages in Canada

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.

Call 1-888-601-9980 to speak to our licensed advisors right away, or book some time with them below.

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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

Explore the difference between term and whole life insurance policies

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.

Take a look at the best life insurance companies in Canada in 2025

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

Explore the cost of life insurance in Canada in 2025 before purchasing coverage

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

Age range	Coverage options	Cost range (Smokers)	Cost range (Non-smokers)	Best insurance providers
0-17 years	Children’s term insurance rider Children’s term life insurance Whole life insurance	N/A	$10 to $25	Manulife Desjardins Empire Life Equitable Life Industrial Alliance (iA)
20-30 years	20 to 30-year term life insurance Whole life insurance	$23 to $54	$17 to $32	Manulife Sun Life RBC
30-39 years	20 to 30-year term life insurance Whole life insurance	$34 to $66	$19 to $27	Empire Life Canada Life Desjardins
40-49 years	20-year term life insurance Whole life insurance	$73 to $170	$29 to $66	Canada Protection Plan Manulife Canada Life
50 years and above	10-year term life insurance Guaranteed Acceptance plans	$187 to $431	$72 to $201	Canada Life Wawanesa Industrial Alliance (iA) Canada Protection Plan

*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!

Frequently asked questions

How can life insurance help young professionals who don’t have dependents yet?

Even without dependents, young professionals can lock in lower premiums early, build cash value with permanent policies, and use certain policies as financial assets for future needs like homeownership or business ventures.

Should parents update their life insurance when having a second or third child?

Yes, expanding families often means increased financial responsibilities. Parents should review their policies to ensure their coverage is sufficient for future education costs, childcare, and household expenses if one parent were to pass away.

Can life insurance help business owners with succession planning?

Absolutely. Life insurance can fund a buy-sell agreement, ensuring business continuity if a key owner or partner passes away. It also provides liquidity to settle debts, pay taxes, or support the transition to new leadership.

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What does a sample life insurance policy look like?

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

Know more about the different types of life insurance policies in Canada

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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:

Take a look at the best life insurance companies in Canada in 2025

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

Explore the cost of life insurance in Canada in 2025 before purchasing coverage

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!

Frequently asked questions

Can I change my life insurance policy after purchasing it?

Yes, many life insurance policies allow adjustments, but the extent depends on the type of policy. You can typically update beneficiaries, add riders such as critical illness or disability coverage, or increase your coverage amount.

If you have term insurance, some policies offer a conversion option, allowing you to switch to a permanent policy without additional medical exams.

What happens if I miss a premium payment?

Most life insurance policies come with a grace period (usually 30 days), allowing you to make a late payment without losing coverage. If you miss the payment beyond this period, your policy could lapse, meaning you would no longer be covered.

If your policy lapses, you may need to reapply, which could result in higher rates or new medical underwriting.

Do life insurance payouts get taxed in Canada?

Life insurance death benefits are tax-free in Canada when paid directly to a beneficiary. However, if the payout goes to your estate instead of a named beneficiary, it may be subject to probate fees, which could reduce the amount your heirs receive.

Additionally, if your policy includes an investment component (such as in universal life insurance), any growth in the cash value may be taxable if withdrawn or transferred improperly.

Can I have multiple life insurance policies?

Yes, you can own multiple life insurance policies from different insurers or even different types of policies. This approach, called layering coverage, allows you to tailor protection for different financial needs.

For example, you might have a term life policy to cover a mortgage and a whole life policy for lifelong financial security. Multiple policies can also help if you exceed coverage limits with one insurer.

Do life insurance policies cover deaths abroad?

Yes, most life insurance policies will pay out if the insured individual dies abroad, but specific terms vary. One can receive coverage if premiums are up to date and the death is not due to circumstances considered as “exclusions”, such as traveling to high-risk countries or engaging in high-risk activities.

Some insurers may require proof of death from a foreign authority. If you frequently travel or live abroad, it’s best to check your policy’s exclusions beforehand to ensure your coverage is not denied.

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What is not covered by life insurance in Canada?

Life insurance is often seen as a financial safety net, but what if that safety net has gaps? Many Canadians assume their policy covers everything, only to discover exclusions that could leave their families without the expected payout.

From high-risk activities to undisclosed health conditions, certain circumstances can lead to denied claims. In this guide, we’ll break down the most common exclusions in life insurance policies in Canada so that you can protect yourself from unexpected loopholes.

What does life insurance typically cover?

While policies may vary, most life insurance plans cover deaths resulting from natural causes, accidents, and certain illnesses. Some policies also offer additional benefits, such as riders for terminal illness or accidental death. Here’s a closer look at what life insurance typically covers:

Death from natural causes: Coverage includes deaths due to illnesses like heart disease, cancer, or other chronic conditions
Accidental death: Most policies cover unexpected deaths caused by accidents, such as car crashes, plane crashes, drowning, or workplace incidents
Terminal illness (with a rider): Some policies allow early access to the death benefit if diagnosed with a terminal illness
Funeral and end-of-life expenses: The payout can be used to cover funeral costs, medical bills, and estate settlement fees
Debt and mortgage protection: Beneficiaries can use the funds to pay off outstanding debts like mortgages, loans, or credit cards
Income replacement for dependents: Provides financial security by replacing lost income for surviving family members
Business protection (for business owners): This can be used to support business continuity or buy-sell agreements in case of a key person’s death
Charitable contributions: Policyholders can designate a charity as a beneficiary to leave a lasting impact

Find out if life insurance can cover disabilities in Canada

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What does life insurance not cover?

Life insurance does not cover death due to suicide, dangerous activities, illegal activities, in case of misrepresented information, and other such scenarios. Insurers typically list these exclusions in the policy document. Here are the most common situations where life insurance does not provide a payout:

1. Death by suicide

Most life insurance policies include a suicide exclusion period, typically lasting one to two years from the policy start date. If the insured dies by suicide within this period, the insurer will not pay out the death benefit—though premiums paid may be refunded. After this period, suicide is usually covered, but it’s important to check the terms of your specific policy.

2. Death due to risky activities

Insurance providers may deny claims if the insured dies while participating in high-risk activities such as:

Skydiving
Scuba diving
Racing (car, motorcycle, or extreme sports)
Private aviation (piloting a personal aircraft)

Since these activities involve significant risk, insurers may exclude them from standard policies or charge higher premiums. However, some companies offer additional riders that allow coverage for these activities.

3. Homicide with the beneficiary involved

Life insurance in Canada usually pays out in full if the insurer has been a victim of a homicide. However, there will be no payout if the beneficiary is found to be involved in the policyholder’s homicide.

This falls under the “Slayer Rule,” which prevents anyone from financially benefiting from a crime they committed. If the beneficiary is suspected or convicted of murder, the insurer will withhold the payout until an investigation is complete.

4. Drug and alcohol-related deaths

If an insured individual dies while under the influence of drugs or alcohol, their life insurance claim may be denied. This applies to deaths caused by:

Drunk driving accidents
Overdoses of illegal or non-prescribed drugs
Complications from substance abuse

Insurance companies assess medical records, toxicology reports, and police statements to determine if intoxication contributed to the death. If the investigation turns out to be true, the claim may be rejected.

5. Criminal acts and illegal activities

Life insurance does not cover deaths that occur while committing a crime. If the insured dies while engaging in illegal activities, the claim is likely to be denied. Examples include:

Dying during a robbery or burglary attempt
Fleeing from the police and getting into an accident
Participating in gang-related violence

Since insurers consider these preventable and unlawful acts, they are not covered under standard life insurance policies.

6. Fraud and misrepresentation

Providing false or incomplete information on a life insurance application can lead to claim denials—even years later. Common misrepresentations include:

Hiding pre-existing medical conditions
Failing to disclose smoking or drug use
Lying about high-risk hobbies or occupation

If an insurer discovers that the insured was dishonest on their application, they have the right to cancel the policy or deny a claim.

7. War and terrorism exclusions

Many life insurance policies have exclusions for war and acts of terrorism. This means that the claim may not be paid if the insured dies as a result of:

Armed conflicts
Acts of war (declared or undeclared)
Terrorist attacks

However, military personnel often have specialized life insurance options through government programs or private insurers that cater to their specific risks.

8. Death in high-risk countries

If an insured person dies in a politically unstable, war-torn, or high-risk country, their life insurance may not provide coverage. Many insurers have a list of excluded countries where coverage is limited or voided due to:

Civil unrest or violent conflicts
High crime rates
Government instability

Before traveling, it’s wise to check your policy and confirm whether coverage applies to your destination. Some insurers allow policyholders to purchase additional riders for specific international travel risks.

9. Undisclosed pre-existing medical conditions

While some life insurance policies cover pre-existing conditions, failing to disclose them can lead to claim denial. If an insurer finds that the insured withheld information about a serious illness, they may void the policy.

However, guaranteed-issue life insurance policies may cover individuals with pre-existing conditions—though they usually have higher premiums and lower payouts.

10. Self-inflicted injuries beyond the suicide clause

Beyond the suicide exclusion period, reckless behavior that leads to death may still result in a denied claim. This includes:

Deliberate self-harm
Extreme stunts or life-threatening dares
Assisted suicide (where laws prohibit it)

Since assisted suicide laws vary by province in Canada, some insurers may have specific clauses regarding Medical Assistance in Dying (MAiD).

11. Policy lapse or missed payments

Life insurance does not provide coverage if your policy has lapsed or expired due to missed premium payments. If the policy is not active at the time of death, beneficiaries will not receive a payout.

Some insurers offer a grace period for late payments and during this period, you can still receive a complete payout even if premiums were missed. However, once the policy fully lapses, reinstatement may require medical underwriting and additional fees.

Take a look at the best life insurance companies in Canada in 2025

Can I opt for life insurance in Canada if I have a hazardous hobby?

If you have a hazardous hobby, life insurance may still pay out, but there could be restrictions or additional costs involved. Insurers assess risky activities on a case-by-case basis during underwriting, which can lead to three possible outcomes:

Application denial: If the activity is considered too risky, the insurer may decline coverage entirely
Higher premiums: The insurer may approve your application but charge a higher premium due to the increased risk
Exclusion clause: The policy may be issued, but with an exclusion that prevents a payout if you die while engaging in the hazardous activity

To ensure full coverage, you may need to disclose your hobby upfront and explore options like specialty riders that cover high-risk activities.

Explore the cost of life insurance in Canada in 2025

How to avoid coverage gaps in a life insurance policy?

Coverage gaps in a life insurance policy can leave your loved ones financially vulnerable. To ensure you have comprehensive protection, follow these key steps:

Be honest in your application: Disclose health conditions, smoking, and risky hobbies to prevent claim denial
Understand exclusions: Check for exclusions like suicide (within the exclusion period), high-risk activities, or illegal acts
Choose the right coverage: Ensure your policy covers your financial needs and convert term policies before they expire
Keep payments up to date: Set up automatic payments to prevent lapses and avoid costly reinstatements
Update your policy regularly: Adjust coverage and beneficiaries after major life events like marriage or having children
Work with reputable advisors: You can always seek the assistance of the experts. Our licensed advisors at PolicyAdvisor can help you look through policies from 30+ top life insurance providers in Canada so that you can choose the policy that suits your needs the best!

Take a look at the best life insurance companies in Canada in 2025

Frequently asked questions

Does life insurance cover deaths caused by medical malpractice?

Yes, in most cases, life insurance does pay out for deaths resulting from medical errors. However, if the policyholder underwent experimental treatments not approved by the insurer, the claim could be denied.

Do life insurance policies cover deaths abroad?

Can my life insurance claim be denied due to missing paperwork?

Yes, incomplete or missing documentation, such as a death certificate, medical records, or proof of beneficiary identity, can delay or even result in a denied claim. Always ensure your policy details are up to date and accessible to your beneficiaries.

Does life insurance cover death due to experimental medical treatments or unapproved drugs?

It depends. If the treatment was part of a clinical trial or involved unapproved drugs, some policies may deny coverage, considering it a high-risk or voluntary medical decision. Always check policy exclusions related to medical procedures.

Will my policy pay out if I die due to a long-term untreated illness?

If the illness was not disclosed during the application process, the insurer could deny the claim. However, if it was properly reported, life insurance typically covers deaths from illness, even if the condition was untreated.

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Comprehensive Guide to Life Insurance for Diabetics in Canada (2025)

As one of the almost 2.5 million Canadians with diabetes (source: Statistics Canada), you may have hit some stumbling blocks or even brick walls on your search for insurance of any kind. Getting life insurance when you are diabetic can be a little less straightforward than for those without it. But, it is possible to obtain life insurance for diabetics, and it may be less expensive than you assumed.

Why does diabetes affect insurance rates?

Diabetes is a disease that affects how your body uses and produces insulin, a hormone produced by your pancreas. There are three types of diabetes: Type-1 diabetes, Type-2 diabetes, gestational diabetes.

Type-1 diabetes

It is also known as insulin-dependent diabetes, is an auto-immune disorder. For Type-1 diabetics, their pancreas no longer produce insulin, a hormone that helps your body convert sugar to the energy you need. You need to administer synthetic insulin to cover for the food you eat

Type-2 diabetes

People with type 2 diabetes produce insulin, but their bodies do not use or recognize it correctly. They can deal with the condition through oral medication or diet. Type-2 diabetes is the most common form of diabetes in Canada, with approximately 90% of diabetics living with Type-2 diabetes.

Gestational diabetes

It is a temporary form of diabetes associated with pregnancy. The body cannot produce an adequate amount of insulin, leading to an increase in the amount of blood sugar. In most cases, gestational diabetes goes away post-pregnancy

So why would diabetes affect life insurance policy premiums? Well, the stress of constantly fluctuating blood sugar levels puts stress on your internal organs, like your heart and kidneys. The added stress means your organs are prone to failure in their older years. Thus, approving your application takes on added risk factors and adds to the cost of life insurance.

More specifically, Type-1 insulin-dependent diabetes is usually diagnosed in childhood and puts a lifetime of stress on one’s body. This is why insurance rates for Type-1 diabetics are higher.

Type 2 diabetes is more prevalent in individuals after the age of 40, and its effects can be quickly remedied by diet; organ stress is not as great of a factor in medical underwriting.

Gestational diabetes does not usually affect insurance rates, as most expecting mothers opt to do any medical underwriting before or after their pregnancy.

Call 1-888-601-9980 to speak to our licensed advisors right away, or book some time with them below.

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Can diabetics get life insurance?

Yes, diabetics in Canada can get life insurance in Canada. Diabetics who are in good health, with consistent medication levels, and who keep their blood sugar levels in control can qualify for standard, medically underwritten life insurance coverage.

In medically underwritten life insurance, the life insurance company will arrange for a blood test and likely request for a physician’s report to evaluate and screen for a pre-existing condition and grant approval for a life insurance policy. This process may provide more a higher death benefit for a lower premium, than no medical life insurance.

Much like anyone with a pre-existing health condition, no medical life insurance is another choice for diabetics. No medical life insurance is a policy that is issued without the insured having to undergo a medical exam. It usually has the added advantage of a simpler and faster issuance process that doesn’t require details for every medical condition one may have.

The two most common types of no medical life insurance are simplified issue and guaranteed issue. Read more about simplified vs guaranteed.

What are the types of life insurance available to diabetics?

In Canada, diabetics have several life insurance options, though the specifics can vary based on individual health conditions and insurance providers. Here are the primary types of life insurance policies accessible to diabetics:

Term life insurance

Term life provides coverage for a specific period (e.g., 10, 20, 30 years) and is generally more affordable than permanent life insurance.

Term life insurance may have higher premiums for diabetics depending on how well the condition is managed and overall health factors

Permanent life insurance

A permanent life insurance policy includes whole life and universal life insurance. It offers lifetime coverage with an added savings or investment component and has higher premiums than term life insurance. This may also require more stringent medical exams for diabetics

Simplified issue life insurance

Simplified issue life insurance requires no medical exam but only a health questionnaire, designed for individuals with health issues who might have difficulty qualifying for traditional life insurance. This policy typically has higher premiums and lower coverage amounts and is often easier for diabetics with well-managed conditions to obtain

Guaranteed issue life insurance

A guaranteed issue policy involves no medical exams or health questions and guarantees acceptance up to a certain age (e.g., 75 years). It has higher premiums and lower coverage amounts and often includes a waiting period (e.g., 2 years) before the full death benefit is paid out.

This is suitable for diabetics with significant health issues or those who have been declined other types of insurance

Life insurance for type 1 and type 2 diabetics

Comparing life insurance options for Type 1 and Type 2 diabetes patients

Securing life insurance as a diabetic can be challenging, but options exist for both Type 1 and Type 2 diabetes. The eligibility, cost, and coverage depend on factors like age, disease duration, treatment stability, and overall health.

While traditional life insurance requires medical exams and detailed health records, no-medical life insurance offers a quicker, hassle-free alternative, but at a higher premium. Understanding the differences in insurance options for Type 1 and Type 2 diabetes can help individuals find the best coverage for their needs.

Best life insurance for type 1 diabetics

The availability of a life insurance policy for people with type 1 diabetes depends on the age of the applicant, duration of the disease, and degree of control. Traditional life insurance companies that require lab results will also seek a doctor’s statement to establish the stability of the treatment and the condition.

In most cases, a life insurance company may apply a rating (higher premium) when approving life insurance for those with type 1 diabetes. No-medical, questionnaire-based options make for an easier and faster process in such cases, albeit they offer life insurance for diabetics at higher premiums.

For no-medical questionnaires, the focus is primarily on the age of the insured, the stability of the medication, and the risk of complications. If you are older, with no change in your insulin dependence in the last 12 months and no associated complications, you can easily get life insurance with no medical exam or obligation to provide medical records.

Best life insurance for type 2 diabetics

People with type 2 diabetes can get life insurance in Canada with the possibility of standard, competitive pricing. Life insurance companies are usually more accommodating when offering life insurance to people with diabetes who do not require insulin injections.

Traditional insurance companies may even consider granting standard regular-health pricing (even more affordable life insurance) to someone who is:

Above the age of 50
Controlling their blood glucose levels and providing lab results with A1C levels
Undergoes regular medical check-ups with a physician or specialist
Is treated with oral medications that have not been increased in the past 12 months
Follows a diet
And has no diabetes diagnosis associated complications

There are also several options with no medical exam for people with diabetes who may not be able to get standard pricing or those that may want easier and faster access to life insurance.

Most no-medical life insurance questionnaires contain a few questions that seek to assess how long you have had type 2 diabetes, whether your medications have changed recently, and whether you have any complications associated with this type of diabetes. Based on simple binary questionnaires, the eligibility of life insurance for diabetics can be established fairly quickly.

Best life insurance companies for diabetics in Canada

There are several companies in Canada that cater to individuals looking for life insurance in Canada. Here are some of the best ones to look out for:

Canada Life
Sun Life Assurance Company of Canada
Manulife
Desjardins Financial Services
Industrial Alliance Life Insurance
Beneva Inc.
Royal Bank of Canada (RBC)

What factors affect insurance rates for diabetes?

Several factors affect insurance rates for diabetics, as insurers evaluate risk based on how well the condition is managed and its impact on overall health. Here’s a collated list of factors that influence insurance rates:

Age

Your age when you apply for a policy: Younger applicants generally secure better rates due to lower perceived risk
Your age when you were diagnosed with diabetes: Earlier diagnosis can lead to higher rates due to longer potential exposure to complications

Type of diabetes

Type 2 diabetes: More common and generally considered less risky compared to Type 1 diabetes but still affects rates
Type 1 diabetes: Often associated with higher risk due to its complexity and potential for complications
Gestational diabetes: Typically resolves after pregnancy; however, if it leads to Type 2 diabetes later, it can affect rates

Severity of your diabetes or blood sugar control

Well-controlled diabetes with stable blood sugar levels is viewed more favorably by insurers
Poor control with fluctuating blood sugar levels or complications can increase risk and lead to higher premiums

Other medical conditions

Additional health issues can increase risk and affect premiums
A family history of diabetes or related health conditions can influence rates
Excessive alcohol consumption can impact overall health and increase insurance premiums

Tips to lower life insurance rates for diabetics

Lowering life insurance rates for diabetics will require you to take proactive steps to manage your condition effectively and demonstrate overall good health to insurers. Here are some tips to help reduce premiums:

Maintain good control of blood sugar levels through regular monitoring and adherence to treatment plans, which shows effective management of diabetes to insurers
Adopt a healthy lifestyle with a balanced diet and regular exercise, which can help improve overall health and potentially reduce the risk of diabetes-related complications
Avoid smoking and limit alcohol consumption, as these factors can negatively impact health and lead to higher insurance premiums
Regularly visit healthcare providers for check-ups and management of diabetes, showing insurers that the condition is being actively monitored and managed
Keep detailed records of your diabetes management, including medications, lifestyle changes, and doctor visits, to provide evidence of effective control to insurers
Compare quotes from multiple insurance providers, as different companies may have varying criteria and rates for diabetics
Work with an insurance expert who specializes in high-risk cases so you can find a policy that suits your specific health conditions

a1c levels affect life insurance price for diabetes

How to get life insurance with diabetes?

Getting life insurance with diabetes can be more challenging, but with the right approach, you can find suitable coverage. Here’s a step-by-step guide to help you:

Gather your medical information

Collect recent medical records, including blood sugar levels, HbA1c test results, and any other relevant health information
Prepare a list of all medications you are taking
Note any lifestyle changes you’ve made, such as diet and exercise routines

Manage your diabetes effectively

Regularly monitor and maintain your blood sugar levels within the target range
Follow a balanced diet, exercise regularly, avoid smoking, and limit alcohol consumption
Visit your healthcare provider regularly for diabetes management and check-ups

Provide accurate information

Submit accurate and detailed records of your diabetes management, including medications, lifestyle changes, and doctor visits, to show that you are managing your condition well

Apply for insurance

Complete the application process, which may include a medical exam for some types of insurance
If a medical exam is required, prepare by fasting if instructed, getting a good night’s sleep, and avoiding strenuous activities beforehand

Review and choose the best policy

Policy review: Carefully review the terms, conditions, and exclusions of your policy
Cost vs. coverage: Balance the cost of premiums with the coverage provided to ensure it meets your needs and budget
Final decision: Choose the policy that offers the best balance of coverage and affordability

Why does timing matter with life insurance for diabetics?

Timing matters when applying for life insurance as a diabetic because your current health status and diabetes management can significantly influence the premiums and coverage options you receive. Here are some reasons why timing is crucial:

Stable condition: Applying when your diabetes is well-controlled and stable can result in more favorable premiums.
Recent health improvements: If you’ve recently made positive changes to your lifestyle, such as losing weight, quitting smoking, or improving your diet and exercise habits, waiting until these changes are reflected in your medical records can lead to better rates
Medical advancements: If new treatments or medications for diabetes have been effective for you, showing a period of stability and improved health can work in your favor with insurers
Age considerations: Life insurance generally becomes more expensive as you age, so, applying when you are younger and your diabetes is under control can help lock in lower rates.
Health monitoring: Regular check-ups and maintaining detailed health records over time can demonstrate a consistent pattern of good diabetes management, which can be appealing to insurers
Temporary health issues: If you have temporary health issues unrelated to diabetes, waiting until you recover from these conditions can help you avoid higher premiums that might result from a recent illness or medical event
Gestational diabetes resolution: If you developed gestational diabetes during pregnancy and it has since resolved, waiting until you have a track record of normal blood sugar levels and stable health can improve your chances of obtaining better life insurance rates

Life insurance and diabetes: What can help or hurt your case

When applying for life insurance with diabetes, several factors can influence your application positively or negatively. Understanding these factors can help you navigate the process and potentially improve your chances of securing favorable rates.

Factors That Can Help	Factors That Can Hurt
Stable blood sugar control: Demonstrating consistent management through stable levels can lead to more favorable premiums	Poor blood sugar control: Inconsistent or poorly managed diabetes with fluctuating levels can lead to higher premiums
Healthy lifestyle: A balanced diet, regular exercise, and avoiding smoking and excessive alcohol consumption can improve overall health and lower premiums	Unhealthy lifestyle choices: Smoking, excessive alcohol use, and poor diet can increase insurance costs
Recent improvements: Showing positive changes in diabetes management or overall health can be beneficial	History of recent medical issues: Recent health problems unrelated to diabetes can negatively influence premiums
Regular medical check-ups: Maintaining regular visits with healthcare providers and detailed health records can help prove effective management	Presence of complications: Diabetes-related complications, such as neuropathy or retinopathy, can increase perceived risk and affect rates
Age considerations: Applying for insurance while younger and with well-controlled diabetes can result in lower rates	Additional health conditions: Other health issues or comorbidities can further increase risk and premiums

What are some questions insurers may ask about your diabetes?

When applying for a policy that requires a health questionnaire or physical exam, insurers will ask about your general health, lifestyle, and family medical history. They will also have specific questions regarding your diabetes, such as:

What type of diabetes do you have? Understanding whether you have Type 1, Type 2, or gestational diabetes helps insurers assess risk levels
When were you diagnosed? The age of diagnosis can impact perceived risk, with earlier diagnoses potentially affecting rates
Do you monitor your glucose levels regularly? Regular monitoring indicates effective management of your condition
Are you taking insulin, oral medication, or both? If so, provide details on the number of insulin units per day, types of medications, and dosages
What is your current diet and exercise routine? Your lifestyle choices can affect your overall health and diabetes management
What is your current A1C level? This provides insight into your long-term blood sugar control
What has been your average A1C reading over the past year? Consistency in A1C levels is important for assessing diabetes control
Have you had any other tests related to your diabetes? This includes tests for complications or related conditions
Who is your primary care doctor and when was your last visit? You may need to provide contact details for your healthcare team, including endocrinologists
Do you have any diabetes-related complications? This could include high blood pressure, vision impairment, blackout spells, or kidney issues
Have you been diagnosed with any other serious medical conditions? Conditions like coronary artery disease or kidney disease can affect insurance rates
Have you ever experienced a diabetic or insulin coma? Such events may impact your risk profile and premiums
Are you currently on dialysis? Dialysis indicates severe complications and can significantly affect insurance costs
Have you had any recent hospitalizations or emergency room visits related to your diabetes? Recent health events can influence risk assessment
Have you made any recent changes to your diabetes medication or treatment plan? Recent changes can affect your current health status and risk profile
What is your current weight, and have you experienced any significant changes recently? Weight fluctuations can impact diabetes management and overall health
Have you been advised by your doctor to make any lifestyle changes or undergo additional treatments? Shows ongoing medical advice and treatment adjustments

Frequently asked questions

What is the best type of life insurance for diabetics in Canada?

The best type of life insurance for diabetics often depends on individual health conditions and needs. Generally, term life insurance may be more affordable, while permanent life insurance offers lifetime coverage and an investment component. Simplified issue and guaranteed issue life insurance policies might also be options for those who prefer not to undergo a medical exam.

Can diabetics get approved for life insurance in Canada?

Yes, diabetics can get approved for life insurance in Canada. Approval and rates depend on factors such as the type of diabetes, control of blood sugar levels, and overall health. Insurance companies assess these factors to determine eligibility and premiums.

How much does life insurance cost for diabetics in Canada?

The cost of life insurance for diabetics in Canada varies based on several factors, including the type of diabetes, age, overall health, and the level of coverage required. Premiums may be higher than for individuals without diabetes due to the increased risk associated with the condition.

When is the best time for a diabetic to apply for life insurance in Canada?

The best time for a diabetic to apply for life insurance is when their diabetes is well-controlled and stable. Applying when you are younger and healthier can also help secure better rates. It is advantageous to apply after recent improvements in diabetes management or overall health.

Do all life insurance companies in Canada offer coverage for diabetics?

Not all life insurance companies in Canada offer coverage for diabetics. Some insurers specialize in high-risk cases and may provide coverage options tailored to diabetics. It is important to compare policies and work with a broker who can help find insurers willing to offer coverage.

Can diabetics get a life insurance policy if they have been turned down before?

Yes, diabetics can get life insurance if they have been turned down before or denied coverage. Read more about your life insurance options when your application has been declined.

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Different types of life insurance in Canada: Choosing the right plan

Many people think there are only two kinds of life insurance in Canada: term life insurance and whole life insurance. It is true that most policies are either one or the other of these two types of life policies. But there are many more options and different types of life insurance Canada has to offer!

Read on to find out about your options for life insurance and types you should choose.

What are the different types of life insurance in Canada?

There are two main types of life insurance policy in Canada:

Term life insurance, which covers you for a set period of time called a “term”
Permanent life insurance, which covers you for your entire lifetime

All policies can fit into one of these two major categories of life insurance, which we take a closer look at in this article. But, there are many different types of coverage, based on the type of policy or type of underwriting you choose. See more below.

Call 1-888-601-9980 to speak to our licensed advisors right away, or book some time with them below.

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Term life insurance

Term life insurance is a type of life insurance that lasts for a specific period of time or ‘term’. The term can be a fixed number of years usually ranging between 10-40 years, or a certain age, the most common being up to age 65 (retirement).

There are two variants of term life insurance:

Traditional term life insurance — the standard term policy that lasts a certain number of years. The most popular and affordable type of life coverage
Annual renewable term life insurance (ART) — a type of policy that lasts for one year and gets renewed every year. Premium payments start low but can increase a lot over time

How does term life insurance work?

With term life insurance, you pay a premium to an insurance company for a set number of years. In turn, the company agrees to give money to anyone you choose (beneficiaries) if you die within your term.

Usually, the shortest term you can get for term life insurance in Canada is 1 year and the longest is up to 40 years. But this also depends on the provider. Some companies won’t offer less than 5 years and some may not offer more than 30 or 35 years, especially for seniors.

You could get a 1-year term that renews every year. But this is also an expensive option.

Who should get term life insurance?

Term life insurance is ideal for those who:

Want affordable life insurance for a set number of years
Are going through a major life event as a young adult, like getting married, having children, buying a home, etc
Have temporary needs like supporting a financial dependent, paying school fees, paying debts, etc
Have outstanding mortgage payments
Are on a tight budget

Pros and cons of term life insurance

Pros

Affordability: Lower premiums compared to permanent life insurance
Simplicity: Easy to understand and straightforward coverage
Flexible terms: Choose a coverage duration that fits your needs

Cons

Temporary coverage: Only provides protection for a specified term
No cash value: Doesn’t accumulate savings or investment component
Renewal cost: Premiums can increase significantly upon renewal

Permanent life insurance

Permanent life insurance, as the name suggests, will never end as long as you continue to pay your premiums. In other words, a permanent life insurance policy will cover you for your entire life. Upon your demise, your beneficiaries will receive a tax-free death benefit.

There are several types of permanent life insurance policies that Canadians can choose from. These are:

Non-participating whole life insurance — has an investment component that builds cash value over time but does not pay dividends
Participating whole life insurance — has a cash value component and also pays annual dividends
Universal life insurance — has an investment component that the insured person manages. Also called indexed universal life insurance policy
Term-to-100 life insurance — a policy that lasts for the rest of your life but does not build cash value like other types of permanent coverage
Funeral or final expense insurance — a permanent life insurance option that is designed to cover a person’s end-of-life expenses like funeral costs and also help with estate planning

How does permanent life insurance work?

In addition to the lifetime insurance coverage, most permanent insurance policies also include a savings or investment component. Part of the premium is used to pay for investments, which accumulate within the policy on a tax-deferred basis and generate a cash value that can be accessed as needed by the policyholder.

The policyholder may use the cash value as savings available for retirement through partial or full withdrawals or by taking loans against the cash value by offering it as collateral to a lender. Due to the lifelong coverage and the embedded investment component, the premiums for permanent life insurance are much higher than other products.

Who should get permanent life insurance?

Permanent life insurance is best suited to protect ‘permanent’ or ‘lifelong’ needs such as:

Estate tax liabilities
Care for a disabled child or dependent
Liquidity for closely held businesses
Funeral expenses

Pros and cons of permanent life insurance

Pros

Lifetime coverage: Offers protection for your entire life
Cash value: Accumulates savings over time that you can borrow against
Fixed premiums: Steady payments that don’t increase with age
Dividends: Potential for dividend payments with certain policies

Cons

Higher cost: Generally more expensive than term life insurance
Complexity: Can be more complicated to understand and manage
Lower returns: Cash value growth may be slower compared to other investments

Types of permanent life insurance

What is whole life insurance?

Whole life insurance is the most popular type of permanent life policy. It has most of the features of permanent policies, including:

Lifelong coverage
Cash value growth
Annual dividends (participating or par policies only)
Guaranteed payout
Higher premiums than term insurance

What is universal life insurance?

Universal life policies are similar to whole life insurance, except you control the investment options yourself. Normally, the insurance company does it for you.

Experienced investors may use universal policies because it has the potential for a higher rate of return when they manage it themselves. But, it also means there’s a higher risk of loss.

Universal life offers:

Lifelong coverage
Self-directed investment component with cash value growth
Growth potential depends on market conditions
Guaranteed payout
Higher premiums
Flexible premium amounts can change

Compare the different types of life insurance policies

While all life insurance pays out a death benefit, not every policy is built the same. So how do they compare? The chart below shows how some of the most popular types of life policies compare.

Feature	Term life	Universal life	Whole life
Cost	Low	High	High
Coverage duration	Temporary coverage	Permanent coverage	Permanent coverage
Cash value	None	Growing cash value	Growing cash value
Investment growth	None	Growth potential	Guaranteed growth
Investment control	None	Self-directed investment	None
Premiums	Level premiums	Flexible premiums	Guaranteed premiums
Limited pay options	No	Yes	Yes
Death benefit	Fixed	Variable	Growing death benefit

Types of life insurance by underwriting

Fully underwritten policies

A fully underwritten policy is a type of policy where the life insurance company asks many personal questions about your health, job, and more to figure out how risky it is to insure you. They might also ask you to do a medical exam.

Accelerated policies

These are a type of policy that does underwriting more quickly by using technology and sometimes skipping the medical exam.

No-medical life insurance

Simplified issue life insurance — a life policy that only asks a few health questions and does not need a medical exam. Gives you a higher chance of being approved but at a higher cost and with less flexibility

Guaranteed life insurance — a life policy that does not ask any health questions or need a medical exam. You are guaranteed to be approved but there are many drawbacks

Different underwriting options exist for both term and permanent types of insurance. Although, no-medical policies usually only offer lifelong protection.

Types of no-medical life insurance

No-medical life insurance is a type of policy that allows individuals to obtain coverage without undergoing a medical exam. This can be particularly beneficial for those who may have difficulty qualifying for traditional life insurance due to health concerns or other reasons. Here are the main types of no-medical life insurance and who they are best for:

Accelerated Issue Insurance

Accelerated Issue Insurance provides a quick approval process, often within days, and requires minimal health-related questions. It offers moderate coverage amounts and can be a good fit for:

Busy professionals: Those who need coverage quickly without the time for extensive medical exams
Individuals with minor health issues: Those who may have slight health concerns but are generally in good health
Young families: Parents who want to ensure they have coverage in place without delays

Simplified Issue Insurance

Simplified Issue Insurance requires a more detailed health questionnaire but still avoids needing a medical exam. It usually offers higher coverage amounts than Accelerated Issue Insurance and is suitable for:

Middle-aged individuals: People in their 40s or 50s who need moderate to high coverage
Those with manageable health conditions: Individuals with conditions like controlled diabetes or high blood pressure
Individuals seeking faster approval: Those who prefer a quicker process than traditional life insurance but need more coverage than Accelerated Issue policies provide

Guaranteed Issue Insurance

Guaranteed Issue Insurance is available to anyone who applies, regardless of their health status. There is often a waiting period before full benefits are payable, and it typically provides lower coverage amounts. This type of insurance is ideal for:

Seniors: Older adults who may not qualify for other types of life insurance due to age or health
Individuals with serious health conditions: Those with significant health issues who are otherwise uninsurable
People needing basic coverage: Individuals looking for a policy to cover end-of-life expenses and minor debts

Type	Accelerated issue	Simplified issue	Guaranteed issue
Best suited for	Those in good health seeking faster approvals, avoiding needles, or with health issues	Those seeking moderate coverage with fewer health questions	Those declined for traditional coverage, with severe health issues, or with final expense needs
Medical questions	Extensive	15-25 questions	1-5 questions
Medical tasks	May be required	None	None
Max coverage	Up to $1,000,000	Up to $750,000	Up to $50,000
Approval time	Instant issue to 1 week	Instant issue to 4 weeks	Instant issue to 48 hours
Cost	$	$$	$$$

Other life insurance types

While these are the major types of policies you can get from an insurance company, there are alternative options available through a bank or lender. These include:

Mortgage life insurance

Mortgage Life Insurance is a policy designed to pay off the remaining balance of your mortgage if you pass away before it’s fully paid. This type of insurance is particularly beneficial in the following scenarios:

Homeowners: Ensures that the mortgage is paid off, allowing family members to keep the home without financial strain
Young families: Provides security for families with young children, ensuring they have a stable living situation
First-time buyers: Offers peace of mind for new homeowners who may have significant financial commitments tied to their mortgage

Credit life insurance

Credit Life Insurance is a policy that pays off a specific debt if the borrower dies before the loan is repaid. It is commonly used in the following situations:

Auto loans: Ensures that car loans are paid off, preventing repossession
Personal loans: Provides coverage for personal loans, protecting co-signers or family members from financial burden
Credit card debt: Pays off outstanding credit card balances, reducing financial pressure on the deceased’s estate

Group life insurance

Group life insurance is a policy that provides financial protection to a group, usually employees of a company, by offering a death benefit to their beneficiaries. Group life insurance is usually best for:

Employers offering workplace benefits to attract and retain employees
Businesses looking for cost-effective life coverage for staff
Unions and professional associations providing member benefits
Organizations seeking basic life insurance coverage for employees
Companies wanting to enhance employee financial security

What is the best type of life insurance for me?

Finding the perfect plan type can be a challenge and the answer isn’t always straightforward. In general:

Term policies are best for short-term needs

Covering outstanding debt: paying off the mortgage, student loans, credit card balances, etc.
Providing for young children: funding future college education and other childcare needs
Supporting a spouse: ensuring they can afford everyday living expenses and maintain the same standard of living

Permanent policies are best for long-term needs

Estate planning: making sure your family has enough to offset the cost of estate taxes
Covering end-of-life expenses: paying funeral costs and clearing any outstanding debt
Leaving a legacy: ensuring your loved ones have an inheritance or making a final gift to a charity

If you’re not sure about your needs, connect with our licensed agents. Our clients come from all walks of life and we have years of experience working with the Canadian insurance industry. We can help you figure out what plan would be best for you!

Factors to consider when choosing a life insurance policy

When you’re looking to purchase life insurance policy, its important to assess your financial needs to make sure you have enough coverage. You should also understand the policy’s terms and conditions and seek the help of experts (such as our experts at PolicyAdvisor) before buying a life insurance plan.

Assessing your financial needs: Determine coverage based on income, debts, dependents, and future expenses
Considering your health and age: Younger, healthier individuals get lower premiums, while pre-existing conditions may impact costs and eligibility
Understanding policy terms and conditions: Review coverage limits, exclusions, premium structure, and payout terms to make an informed choice
Relying on expert insurance advisors: You can seek the expert guidance of our insurance advisors at PolicyAdvisor to get customized pricing and affordable rates. Our life insurance calculator can help you get a quote within 60 seconds!

How do I get life insurance?

You can get an individual life insurance policy by applying online using our website! Use our free quoting tool below or our life insurance needs calculator to get a customized quote in seconds.

Or, simply book some time with our life insurance experts. We’re happy to help you determine how much life insurance you need to protect your family and achieve your financial goals. Reach out and get a quote!

Frequently asked questions

What is the cheapest type of life insurance?

Term life insurance policies are the cheapest type of insurance policy. It has the most affordable premiums because it does not have investments like whole life insurance. And, the death benefit payout is not guaranteed — you can outlive your policy.

A lot of Canadians overestimate how much life insurance costs, and how low monthly premiums can be. Get personalized quotes in seconds on our website and see just how little a term life policy would cost you.

What is the most popular type of life insurance in Canada?

Term life insurance is the most popular type of life insurance because it’s an affordable option that can be used for a lot of different needs. Most Canadians get term life insurance for things like covering outstanding debt or providing for dependents.

What type of life insurance can you borrow from?

You can only borrow from permanent life insurance policies that build cash value, or what some people call “cash value life insurance.” These are:

Whole life insurance
Universal life insurance (or indexed universal life insurance)

What type of life insurance comes with investments?

Permanent life insurance policies are the only ones that come with an investment component built in. You can either get:

Whole life insurance, where the insurance company handles all the investments for you and you get modest returns
Universal life insurance, where you handle investments yourself and get bigger potential returns — but also bigger potential losses.

What’s the difference between term and whole life insurance?

The main difference between term and whole life insurance is that term covers you for a certain number of years and does not have cash value, while whole life covers you permanently and has an investment component. They each have pros and cons that make them best suited for different purposes.

What’s the difference between whole and universal life insurance?

Whole and universal are both types of permanent insurance policies. The key difference between these kinds of insurance is that whole life insurance’s cash value investments are managed by your insurance provider but universal life lets you manage it yourself. With universal, your growth potential is higher, but so is your risk.

What’s the difference between group and individual life insurance?

Group insurance is a life insurance policy that you get through your employer, job, or other group you’re part of. On the other hand, individual life insurance is a policy you buy on your own. Some of the key differences are:

Group policies are convenient but limited. They may not provide adequate coverage for your needs, and coverage usually is not portable — it ends when you retire or reach age 65, or if you decide to leave the company.
Individual policies grant far more flexibility. You can customize coverage type, amount, length, and more to meet your exact needs.

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Joint last-to-die life insurance in Canada

Joint last-to-die life insurance covers two individuals, typically couples or business partners. It is an effective estate planning tool since it effectively helps preserve wealth and ensure assets are distributed and transferred smoothly.

In this blog, we’ll look at what a joint last-to-die life insurance policy is, how it works, who it benefits, and more.

Call 1-888-601-9980 to speak to our licensed advisors right away, or book some time with them below.

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What is joint last-to-die life insurance?

Joint last-to-die life insurance, also known as survivorship life insurance, covers two lives under one contract. Unlike single life policies, joint last-to-die life insurance pays out the death benefit only when both the insured individuals pass away. This deferred payment structure makes it an ideal and strategic tool for estate planning in Canada.

Key features of joint last-to-die life insurance

Feature	Description
Coverage	Covers two individuals under one policy
Death benefit	Only paid out when both the insured individuals have passed away
Tax efficiency	Helps offset capital gains tax, preserving estate value
Usage	Strategic estate planning tool, also used to cover funeral expenses
Cost	Generally less expensive than single-life policies since the death benefit payout is deferred till both insureds have passed away

Benefits of joint last-to-die life insurance in estate planning

Joint last-to-die life insurance is a powerful estate planning tool that can help with tax management, preservation of wealth, simplified estate distribution, and charitable giving. Let’s look at all of these benefits in more detail:

Tax efficiency and expense management with joint last-to-die life insurance

Offsetting capital gains tax: The deemed disposition mechanism in Canada treats a deceased person’s assets—such as investments and real estate—as having been sold at a fair market value. This leads to considerable capital gains tax on an asset, especially if it has appreciated in value. The lump-sum tax-free death benefit from a joint last-to-die life insurance policy can be used to pay these taxes
Covering probate fees: Probate is a legal process that validates a will, and can involve a substantial amount of fees that varies by province. Since joint last-to-die policies let policyholders choose a beneficiary, the death benefit bypasses the probate process. This means that the beneficiaries are not affected by probate and other administrative fees

Wealth preservation and equalization with joint last-to-die policies

Asset protection: As mentioned above, the death benefit from a joint last-to-die policy can be used to pay taxes and administrative costs without the need to sell all or parts of an estate to cover them. This ensures maximum wealth preservation for beneficiaries
Equal distribution of wealth: Couples or common law partners with more than one beneficiary/heir can choose to distribute the death benefit from a joint last-to-die policy to offset any disparities

Joint last-to-die policy to simplify estate distribution

Since the death benefit from a joint last-to-die policy goes directly to the beneficiaries, bypassing probate, it speeds up the distribution process and avoids any legal delays

Enhanced flexibility with joint last-to-die cover

Joint last-to-die policies can be easily integrated in other estate planning tools such as wills and trusts. For example, the death benefit can be placed in a trust that provides financial support to beneficiaries or funding to charitable organizations

How do joint last-to-die policies differ from other insurance plans?

Joint last-to-die policies differ from other insurance plans in terms of coverage options, the payout structure, and the benefits. Single-life policies cover one person and the death benefit is paid when the insured dies. Joint first-to-die covers two and pays out upon the first death. Joint last-to-die policies cover two individuals and pay out when both have passed away.

Here are some more differences:

Individual life insurance:

Flexibility: Can be customized and tailored to the preferences of an individual’s unique financial needs
Cost: Can be more expensive than joint last-to-die policies since only one individual is insured and the insurance company will have to pay the death benefit sooner

Joint first-to-die life insurance:

Usage: Unlike joint last-to-die policies, joint first-to-die plans provide immediate financial support to the surviving insured member. This is ideal for income replacement, paying off debts, and other immediate financial obligations

Individual, joint first-to-die, and joint last-to-die: comparison table

Feature	Individual Life Insurance	Joint First-to-Die	Joint Last-to-Die
Who It Covers	One person per policy	Two people under one policy	Two people under one policy
When It Pays Out	Upon insured’s passing away	First death amongst two insured	Second death amongst two insured
Main Benefits	Flexible coverage	Lower cost, helps surviving partner	Estate planning, lower cost than two policies
Drawbacks	More expensive for couples	Ends after first death, survivor needs new policy	No payout for survivor, premiums may continue after first death
Cost Comparison	Highest (needs two separate policies)	Moderate (one policy for two)	Lowest (spread over two lives)
Best For	Individuals, young parents with multiple needs, single-income families	Couples needing security for a survivor	Couples focused on estate planning or inheritance
Use Case	Single parent securing kids’ future	Spouse ensuring financial stability	Leaving a tax-free lump sum to heirs

How does joint last-to-die life insurance work in Canada?

A joint last-to-die life insurance policy needs a joint application by both the individuals who want to be insured under one contract. During the underwriting process, insurers assess the health and lifestyle of both individuals and check that they are both “insurable”. This means that pre-existing conditions may affect coverage and eligibility.

Here’s a more detailed look at how joint last-to-die policies work in Canada:

Application and underwriting: Requires a joint application by both individuals. The underwriting process looks at both individuals’ health—pre-existing conditions, age, lifestyle—can affect premiums
Premium payments: Premiums continue until both insured individuals have died. This means the surviving policyholder must continue to pay premiums after the first death to maintain coverage
Policy type: A joint last-to-die policy is more commonly issued as a permanent (whole life) plan, although term plans are also available with the same coverage
Beneficiaries: In case of a couple, the children are the common beneficiaries, rather than the surviving spouse/partner. Business owners may choose to name their companies as the beneficiary

How does the survivorship clause in joint last-to-die life insurance policies work?

The survivorship clause is integral to a joint last-to-die life insurance policy especially in cases of simultaneous death. If both the insured members die at the same time, the death benefit is paid out after a certain time frame, usually 30 days. The survivorship clause is crucial to estate planning since it ensures that the death benefit is only paid out after both the insured policyholders have passed away.

Are there any health requirements for individuals applying for joint last-to-die life insurance?

Yes, insurers look at the health and lifestyle of both individuals for a joint last-to-die policy. A closer age range and health profile can generally result in better premium rates. While pre-existing conditions, even the more critical ones such as cancer or heart issues, do not necessarily affect eligibility, they might increase the premiums.

Learn more about getting life insurance with a pre-existing condition

Cost of a joint last-to-die life insurance policy

The cost of a joint last-to-die life insurance policy depends on the age, health, and lifestyle of both the individuals. In some cases, high-risk jobs such as construction work, might also affect the premiums.

Joint last-to-die policies are cheaper than individual plans, sometimes as much as 20-30% lower. This is because the insurer’s risk is reduced due to the delayed payout after the second death.

Cost of a whole life joint last-to-die insurance policy

Applicants’ age and gender	Age gap and health	Monthly premiums (Enhanced plan)	Monthly premiums (paid-up additions)
25, female and 30, male	5 year age gap, similar health and lifestyle	$52.33	$79.11
30, female and 40, male	10 year age gap, similar health and lifestyle	$60.84	$89.01
25, female and 45, male	20 year age gap and wider age range	$55.68	$82.80
30, female and 55, male	Wider age gap, potential health issues with older applicant	$65.07	$94.14

*Illustrative costs for $100,000 in coverage, life pay, for non-smoking applicants

How do premiums for joint last-to-die life insurance policies typically compare to individual policies?

Premiums for joint last-to-die life insurance policies are generally lower than individual plans. This is because of the deferred death benefit payout with joint last-to-die policies. The assumed probability of death with individual policies is higher—insurance companies have to pay out the death benefit when the sole policyholder passes away. With joint last-to-die policies, insurers have more time to pay out the death benefit.

With joint last-to-die policies, a closer age range and similar health factors between the two applicants will typically lead to more favourable premiums.

What are the tax implications of the death benefit from a joint last-to-die life insurance policy?

The death benefit of a joint last-to-die life insurance policy is received tax-free by the beneficiaries. The death benefit can be used to offset capital gains taxes, outstanding debts, and other estate liabilities, ensuring the estate is not diluted before being passed on to the beneficiaries.

Can joint last-to-die life insurance be used to cover funeral expenses?

Joint last-to-die policies are designed for estate planning and are generally not used for immediate financial needs like funeral expenses. Since the death benefit is only paid out after the second insured passes away, the first insured’s funeral expenses cannot be covered by the policy.

In some cases, a specific rider can be added to a joint last-to-die plan that offers a portion of the death benefit upon the first death as well.

Who should consider joint last-to-die life insurance?

A joint last-to-die life insurance policy is beneficial for married couples, business owners, and high-net-worth individuals who want a long-term estate planning strategy.

Here’s how joint last-to-die plans work for different groups of individuals:

Married couples and common-law partners: Helps couples with a combined estate protect their legacy and ensure their assets go to their children and heirs without the burden of taxes, probate, and other expenses
Business owners: Ideal for business partners who want to fund buy-sell agreements and ensure seamless business continuity during ownership transfer
High-net-worth individuals: Can be a strategic estate planning tool for high-net-worth individuals who have significant wealth and who want to ensure their assets are protected

How to incorporate joint last-to-die life insurance into your estate plan?

To integrate a joint last-to-die life insurance policy into your estate plan you should review the value of your estate, set a coverage amount, and integrate your policy with other estate planning tools. Here’s a detailed look at these steps:

Assess your estate’s value: Understand the current value of your estate, any tax obligations, or other financial considerations related to your estate
Set a coverage amount: Your death benefit should match potential estate expenses to ensure maximum wealth protection
Integrate with other tools: Integrating your joint last-to-die policy with other estate planning tools such as wills and trusts, will ensure your estate is not diluted by taxes or administrative costs before being passed on to your beneficiaries

Need help?

Call us at 1-888-601-9980 or book time with our licensed experts.

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Frequently Asked Questions

What are the typical uses for the death benefit from a joint last-to-die life insurance policy?

The death benefit from a joint last-to-die life insurance policy is typically used to offset taxes such as capital gains taxes, taxes on Registered Retirement Savings Plans (RRSPs). Other uses are for legacy creation, charitable contributions, and funeral expenses after the second death.

Are there any scenarios where joint last-to-die life insurance might not be the best choice?

If the loss of one partner would significantly impact the financial stability of the surviving partner, joint last-to-die insurance is not suitable. It does not provide a payout until both partners have passed away, leaving the surviving partner without immediate financial support. If one partner has health issues, the joint policy may be more expensive due to the combined health risk. In such cases, purchasing individual policies might be more cost-effective, especially if one partner is significantly healthier.

What happens to a joint last-to-die life insurance policy in case of a divorce?

In case of a divorce, managing a joint policy can be complicated. Insurers typically do not allow policyholders to split a joint last-to-die policy into two separate policies. In such a case, the two individuals would have to buy separate life insurance policies which would be expensive.

How does the application process for joint last-to-die life insurance differ from individual policies?

Both individuals must apply together, providing health and lifestyle information for both applicants. This contrasts with individual policies, where only one person applies. The health status of both applicants is assessed together, which can affect premium costs. In individual policies, each person’s health is evaluated separately.

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Term vs Whole Life Insurance: Choosing the Best Option for 2025

Life insurance is more than just a protective tool—it’s a crucial part of securing your family’s future. However, understanding the differences between term and whole life insurance is essential to making the right choice.

Each serves a unique purpose, offering varying levels of protection and flexibility. In this article, we break down both types to help you choose the policy that best suits your needs.

What’s the difference between term and whole life insurance?

The key difference between term and whole life insurance lies in their duration, cost, and benefits.

Term life insurance covers a specific period, such as 10, 20, or 30 years. If the policyholder passes away during this term, a death benefit is paid to beneficiaries, but there is no payout if the term ends while the policyholder is still alive. This makes term insurance ideal for temporary needs like paying off a mortgage or funding education.

Whole life insurance, by contrast, offers lifelong coverage and includes a cash value that grows over time, which can be accessed during the policyholder’s life. Its higher premiums reflect the added savings element and guaranteed protection, making it suitable for long-term goals like estate planning and legacy building.

Term vs Whole life insurance: Key differences

Term life insurance	Whole life insurance
Temporary coverage for a fixed time period e.g. 10 years, 20 years, 25 years	Guaranteed lifelong coverage
Best suited for temporary needs (mortgage, children’s education, lifestyle protection)	Best suited for permanent needs (estate planning, retirement income, final expenses)
Premium payments only stay the same until the end of the term	Premium payments stay the same for life
Low premiums for the initial term	Higher premiums because of lifetime coverage and savings component
Death benefit but no cash value component	Death benefit and access to a growing cash value
Pay premiums for life	Options to pay off premiums early
Death benefit stays the same	Death benefit may increase with dividends
Loans/withdrawals cannot be taken against term life policies	Policy loans can be taken and dividend payments may be withdrawn
Death benefit only paid out on policy holder’s death	Benefits can be accessed as dividends or loans during policy holder’s lifetime
Death benefit payout not guaranteed — you can outlive your policy	Guaranteed death benefit payout
Can be converted into permanent policies	Does not need to be converted
Will lapse is premiums unpaid for 30 days	Will continue to be in force as long as cash value can cover premium

Call 1-888-601-9980 to speak to our licensed advisors right away, or book some time with them below.

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What is term life insurance?

Term life insurance is a type of life insurance policy that provides coverage for a specific period, or “term,” such as 10, 20, or 30 years. If the policyholder passes away during this term, their beneficiaries receive a tax-free death benefit. However, if the policyholder outlives the term, the coverage ends, and no payout is made.

Term life insurance is ideal for meeting temporary financial needs, such as paying off a mortgage, funding children’s education, or replacing income in the event of premature death.

Term life insurance pros and cons

Pros	Cons
Simple to understand	Coverage is temporary
Low costs for the first term	Death benefit is not guaranteed — you can outlive your policy
Can be converted into whole life insurance	Premiums increase if you renew your policy for another term
Price stays the same for the entire term (Guaranteed Level Premiums)	No investment or cash value component
Flexible — you can tailor your term to fit specific short-term needs	Cannot borrow or cash in on the policy

Read our full Guide to Term Life Insurance in Canada

What is whole life insurance?

Whole life insurance is a type of life insurance that provides coverage for the policyholder’s entire life, as long as premiums are paid. In addition to offering a guaranteed death benefit, it also includes a cash value component that grows over time at a guaranteed rate. This cash value can be accessed through loans or withdrawals during the policyholder’s lifetime.

Whole life policies typically have higher premiums compared to term life insurance because of their lifelong coverage and savings feature. Such policies are well-suited for long-term financial planning, such as estate planning, wealth transfer, or covering final expenses, and may also pay dividends, which can further increase the cash value or death benefit.

Whole life insurance pros and cons

Pros	Cons
Permanent coverage — never expires	Premiums can be expensive
Price stays the same for the entire term (Guaranteed Level Premiums)	Investment returns may not be as large as with other investments
Savings component — cash value accumulation and annual dividend payments
Can borrow or cash in on the policy

Read our full Guide to Whole Life Insurance in Canada

Whole vs term life insurance: Cost comparison

The cost of term life insurance is significantly lower than whole life insurance because it provides coverage for a limited period and doesn’t build cash value.

For non-smokers aged 25-34, term life premiums can be as low as $13-$15 per month, while whole life premiums for the same age group range from $250-$275. Smokers pay higher premiums across the board, with term life costing $30-$35 for ages 25-34 and whole life costing $300-$350.

As age increases, premiums for both types rise, but whole life consistently remains more expensive due to its lifelong coverage and cash value component.

Average term and whole life insurance rates for smokers and non-smokers

Age Group	Term Life – Nonsmokers	Term Life – Smokers	Whole Life – Nonsmokers	Whole Life – Smokers
	Male / Female	Male / Female	Male / Female	Male / Female
25-34	$15 / $13	$30 / $25	$275 / $250	$350 / $300
35-44	$20 / $18	$45 / $35	$350 / $300	$475 / $400
45-54	$50 / $40	$100 / $80	$500 / $425	$700 / $575
55-64	$100 / $80	$180 / $150	$750 / $625	$1,100 / $900
65+	$200 / $150	$350 / $300	$1,200 / $1,000	$1,800 / $1,500

*Representative values based on average monthly costs of term and whole life premiums from Canada’s best life insurance companies.

How do term and whole life insurance premiums change over time?

Term life insurance premiums start low but increase after the initial term ends, as the policy renews at higher rates. In contrast, whole life insurance premiums stay the same for life, ensuring policyholders pay a fixed amount regardless of age.

Which is better, permanent or term life insurance?

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

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

Policy Type	Best for
Term life insurance	Younger individuals Covering specific financial obligations (mortgages, loans) Temporary needs (children’s education)
Whole life insurance	Estate planning Lifetime coverage regardless of health changes Building tax-advantaged cash value for future borrowing

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

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

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

Can you have both term and whole life insurance?

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

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

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

Do I need both term and whole life insurance?

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

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

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

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

Life Insurance Tip

The low cost of term coverage comes with a caveat. If you want to renew your policy when your term ends, your premiums will cost a lot more. Insurance is more expensive as you age because it’s more of a risk for insurance companies.

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

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

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

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

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

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

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

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

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

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

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

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

Frequently asked questions

Why is term life cheaper than whole life?

Term life insurance policies are generally the most affordable type of coverage when compared to permanent life insurance options like whole life. This is because term policies offer temporary coverage for a set period, without the lifelong protection provided by whole life. They also lack investment components, meaning they don’t build cash value or pay out dividends.

Is whole life versus term life insurance better for seniors?

In general, the most common type of insurance policy for Canadian seniors is whole life insurance. They give seniors life assurance that they can leave something behind for loved ones, and plus give them the benefit of cash value growth.

But, there is no hard-and-fast rule that whole life insurance is better for seniors in every case. The best policy for you really depends on your life and insurance needs.

Which companies offer term life or whole life coverage?

Most of Canada’s biggest life insurance companies offer both term and whole life. This includes many of the ones we work with, like Assumption Life, Beneva, Canada Life, Empire Life, Equitable Life, Sun Life, etc.

Check out our insurance reviews before you make a decision on a certain company. And be sure to compare the best life insurance quotes from each company right here on PolicyAdvisor.

What age to get whole life insurance?

The best age to get term or whole life insurance depends on individual financial goals, but generally, it is ideal to purchase life insurance in your 20s or 30s. The younger you are when you purchase a term or whole life policy, the lower your premiums will be. Premiums are typically based on your age and health, so securing a policy in your 20s or 30s ensures you lock in more affordable rates.

Can I cancel a whole life or term life policy early?

Yes, you can cancel both whole life and term life policies early. Here’s how it works for each type:

Whole life policies

Terminate the policy: You can cancel your whole life policy by contacting your insurer. Upon cancellation, you’ll receive the cash surrender value, which is the policy’s cash value minus any applicable charges
Cancel during the review period: There is often a review period (typically 10 days) effective from the date of the policy’s receipt. If you cancel within this window, you’ll receive the net cash value plus any accrued dividends
Reduced paid-up option: Instead of canceling, you may convert your plan to a reduced paid-up policy, which provides a lower amount of coverage without requiring further premium payments

Term life policies

Terminate the policy: You can cancel your term life coverage by contacting your insurance provider. Some insurers may require you to submit a written confirmation
Cancel during the “free look” period: Most insurers offer a free look period of 10 to 30 days after purchasing a policy. During this time, you can cancel and receive a full refund of any paid premiums
Automatic termination: If you miss a premium payment and don’t pay within the grace period (typically 30 days), your policy will lapse automatically

How does cash value work in whole life insurance?

In whole life insurance policies, cash value is a savings component that accumulates over time. Each time you pay your premium, a portion is allocated to the cash value, which grows at a guaranteed rate set by the insurer. Over time, it may increase further through earned interest and any dividends paid by the insurer.

The timing of when the cash value becomes accessible depends on the policy type and insurer. Once available, it can be withdrawn, borrowed against, or used as collateral for a loan.

You can learn more about how cash value works here.

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Does life insurance pay out for suicide?

If you or a loved one are experiencing a mental health crisis, please contact the Mental Health Support Line at 1-833-456-4566

Need insurance answers now?

Does life insurance cover suicide?

What’s a suicide clause?

A life insurance suicide clause might look like this

How does suicide affect life insurance payouts?

In case of death during the suicide clause period

In case of death after the suicide clause period

For joint policies

How does life insurance work?

What does life insurance cover?

1. Natural causes

2. Terminal or chronic illness

3. Accidental death

4. Murder

5. Suicide

6. Illegal or criminal activities

7. Deaths due to drug or alcohol use

What does life insurance not cover?

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

2. Deaths while engaging in hazardous activities

Does life insurance cover medically-assisted death?

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

Frequently asked questions

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

Does life insurance ever pay out for suicide?

What other factors could affect whether insurance companies pay out for suicide?

What are other reasons why life insurance wouldn’t pay out?

1. Suicide clause:

2. Misrepresentation:

3. Non-payment of premiums:

4. Dangerous activities:

5. Contestability period:

What is Life Insurance and How Does it Work in Canada?

What is life insurance?

How does life insurance work?

What does life insurance cover?

Life insurance terminology

What are the different types of life insurance in Canada?

Term life insurance

Whole life insurance

Limited-pay whole life insurance

Universal life insurance

Term to 100 life insurance

Annual renewable term life insurance (ART)

Is life insurance worth it?

When should I buy life insurance?

Does life insurance have cash value?

How much does life insurance cost?

What are life insurance premiums?

How much life insurance do I need?

Should I get life insurance through work?

What happens to a term life insurance when it expires?

Can I renew a term insurance policy?

What personal information do I need to share with my insurance company?

What is an attending physicians statement?

Who should you name as your life insurance beneficiaries?

Are there different types of beneficiaries?

Should you name your children as beneficiaries?

Who needs life insurance in Canada and why?

Should I add life insurance riders to my policy?

Which is the best life insurance policy?

Should I get life insurance for my children?

Do you need insurance to travel to Canada?

Frequently asked questions

What does life insurance cover?

How does a term life insurance policy work?

How does life insurance payout work?

Why life insurance?

How to use life insurance while alive in Canada?

What are the tax implications of life insurance in Canada?

Life insurance for high-risk individuals in Canada

Need insurance answers now?

Who is considered high-risk by insurance companies?

Who needs high-risk life insurance?

1. People with pre-existing health conditions

2. Individuals in high-risk professions

3. Extreme sports and adventure enthusiasts

4. Smokers and individuals with risky lifestyles