Term life insurance is right up your alley if you’re just getting started with #adulting — like getting your finances in order, learning how taxes work, and thinking about whether you should start investing.

Life insurance is a great way to build a better financial future for your family. And term life insurance is the most affordable and easy option for this kind of security.

This article is your handy guide to the basics of life insurance. We explain what it is and how it works. And, we answer your biggest questions, like how much does term life insurance really cost, what happens when the term ends, whether you can get your money back, and more.

Many procrastinate and put off talking about obtaining an individual disability insurance policy, but it’s something one should always keep in mind. If you are reading this, you are likely worried about the insurance policies you currently have in place and whether you’re in the best position possible for coverage. Your ability to earn an income isn’t a guarantee, as one accident could prevent you from paying your mortgage or other expenses.

With that in mind, it’s important to realize that just because you have term life insurance, it doesn’t mean that your life insurance coverage is going to cover everything. This rings especially true if you and your dependents rely on your ability to earn a paycheque. When you’re put in a position that prevents you from earning your regular income due to disability, tough times are likely to ensue.

What is life insurance?

Life insurance is an agreement between you and a life insurance provider, where if you die, they will pay a lump sum, tax-free benefit to someone you choose – also known as your beneficiary. In exchange, you agree to pay your insurance provider a monthly or annual premium: a small amount of money over the length of your policy

This doesn’t cover you if you’re dealing with long-term disability, as the policyholder has to be deceased before the death benefit can be paid (hence the name). With that said, some life insurance companies offer optional riders. These riders can be added to your regular life insurance coverage at the time of application and provide options and coverage for the future, should you find yourself dealing with disability or serious illness.

What is disability insurance?

Individually owned disability insurance is specifically designed to provide income protection to those who have lost income due to an injury or illness. This is different from a life insurance policy, as life insurance policies are focused on helping the estate or beneficiaries after the policyholder is deceased. There are certain disability riders you can add to term or whole life insurance at the time of application to give you more protection should you become disabled. But, they do not offer the breadth and customization of individually owned disability insurance.

The insured must be deceased for a life insurance policy to pay out; disability insurance policies only make payments if the if the insured remains alive, but has lost their income due to a disability.

To find out more about the different kinds of disability coverage, how your occupation relates to the kinds of coverage you can get, short-term disability insurance, long-term disability insurance, Canada Pension Plan (CPP), and income replacement, read our guide to disability insurance.

Does term life insurance cover disabilities?

No, a life insurance policy does not cover disabilities. This is true whether it is a term life insurance policy or a whole life insurance policy. But, as mentioned, there are different ways your life insurance policy can protect you through optional riders.

Total Disability Waiver of Premium Rider

Under this rider, life insurance premiums are waived if the life insured suffers a permanent total disability. Total Disability Waiver of premium covers disabilities due to accidents as also those suffered due to illnesses. To claim under this rider, the life insured must:

• not be able to perform essential duties of their occupation,
• not be engaged in any other occupation, and
• be receiving medical care for the condition that has caused total disability.

Generally, disability waiver riders only pay out after the individual has been totally disabled for at least 4 or 6 consecutive months. The premiums can be waived retroactively, including for the initial 4 or 6-month waiting period. The rider is valid until a certain age of the person to be insured, most often up to the age of 60 or 65.

Disability Income Rider

A Disability Income rider provides monthly payments to the life insured in the event they become disabled and unable to work. The policyholder will need to choose the time period for which the payments are to be made and the monthly payment (which is usually capped). This rider typically has a 30 or 90 day waiting period, with retrospective payments that start after the waiting period is over.

Mortgage Disability or Credit Disability Insurance Rider

A Mortgage Disability rider covers all or part of the life insured’s line of credit or monthly mortgage payments in the event of their temporary or permanent disability. The payments are made for a specified period of time such as 2 years from disability, 5 years from disability, or up to the age of 65. Credit riders typically have a waiting period of 90 days, although can be retroactive to 31 days in the event of disability from an accident. A proof of the outstanding loan is usually required at the time of the claim.

What should I choose between disability vs life insurance?

Life insurance is designed to provide financial protection against death. It is available to both individuals and businesses. Life insurance companies offer two types of insurance: term life insurance and whole life insurance. Term life insurance offers protection for a limited amount of time and is inexpensive compared to whole life. Disability insurance offers financial protection against injury and thus your ability to earn income. Comparing disability insurance versus life insurance is not quite apples-to-apples, both are strong protection products with very different use cases and shield you or your loved ones from financial hardship.

Keep yourself covered with disability insurance

Disability insurance should be considered by anyone in their prime income earning years. As you make financial decisions based on the assumption that you’ll be receiving a regular paycheque, it’s important to contemplate what might happen if an injury or illness suddenly prevents you from earning your income. The insurance experts at PolicyAdvisor have experience helping Canadians understand their current disability benefits; and – if there are gaps in coverage, they can assist in obtaining additional disability insurances and coverage. Reach out below if you have any questions.

Wondering about the cost of life insurance in your 40s? Like most Canadians your age, changes in lifestyle might have you thinking about what your family’s financial future will look like. If you are in your 40s and contemplating life insurance, or looking to update your existing policies, there is no time like the present.

The younger you buy, the cheaper it is—so there’s no better time than now!

Read on to find out the monthly cost for life insurance in your 40s, and why you should either buy your first policy or upgrade your existing policy to match your lifestyle.

What is the average cost  for life insurance costs for a 40-year-old

Term life insurance costs about $50 per month for $500,000 in coverage for the average male, non-smoking, 40-year-old.

As we’ve explained before, insurance premiums depend on various risk factors such as your age, gender, smoking status, lifestyle, and overall health. These factors are taken into account to determine your life expectancy and the chances the life insurance company will have to pay out your death benefit. If you partake in high-risk activities, your life expectancy statistically decreases and the cost of life insurance is adjusted accordingly. For example, smoking more than doubles (and almost triples) your life insurance rates in your early forties, and keeps that trend going by age 49.

That being said, we’ve crunched the numbers from over different Canadian life insurance companies to give you the average cost of life insurance in your 40s. See the charts below that have term life insurance quotes by age for a 20-year term life insurance policy, divided by gender and smoking status.

Life Insurance Premiums – Male, 20-Year Term

*Representative values, based on regular health

The story is similar for women, initial rates are lower than men’s at this age, and smoking continues to have a meaningful impact on premiums. See the chart below that has quotes for 40-year-old women, both smoking and non-smoking, for 20-year term life policies.

Life Insurance Premiums – Female, 20-Year Term

*Representative values, based on regular health

These average life insurance rates will still vary depending on personal factors like your health and medical exam results, smoking status, location, and more. You may also feel you need a higher death benefit or a longer year term depending on your financial situation, life insurance coverage needs, and all the other life stuff that accompanies your forties.

Looking for a more exact monthly rate? Get a quote in seconds from some of the best life insurance companies in Canada. Get the lowest rates on the market by shopping over 30 insurance providers in seconds! Fill out the quote form below!

Yes, you should get life insurance in your 40s. Buying life insurance in your 40s means financial protection for your family at low rates because your health history is good. You are still relatively young in middle age and can secure a good monthly premium.

There are some clear signs of whether you need life insurance in your forties:

• You and your partner plan on spending the rest of your life together
• You have children of any age
• You have a mortgage, or plan on buying or upgrading your home soon
• You have other forms of debt such as credit card debt or a line of credit
• You are the main earner for your family, with dependents like your children, partner, or parents relying on your annual income
• You are continuing to accumulate assets that will someday be transferred to your beneficiaries
• You want to make sure your family can cover your final expenses, like funeral costs

You may have coverage through a group plan at your work, but at this age career changes and promotions are more and more likely – you could find yourself with a gap in coverage or no coverage at all depending on that next role. Additionally, with a work policy, the type of coverage and policy options are limited. Find out why you shouldn’t just rely on your group life insurance plan.

Not to mention, as you age, health conditions start to creep up, and having a pre-existing condition while you’re applying for coverage can make your monthly cost increase.

You may already have life insurance you purchased when you were younger, but the plan, benefits, and options may no longe work with your current lifestyle. As you take the escalator up in your career and glide towards your peak earning potential, your growing nest egg will need more protection. Be it marriage, children, mortgages, or pets, your financial and protection needs can change drastically in 5 to 10 years. Your forties may, therefore, be a good time to revisit your existing coverage.

In most of our articles, when we mention term life insurance, we are referring to level term life insurance. What this means is the premium rate is locked in for the length of your coverage term. For example, let’s say you applied and were approved for a 20-year term life insurance policy, with a monthly premium of $30. That $30 is what you pay every month for 20 years (or 240 months). 

Some applicants shop and compare for quotes to ensure they can lock in the lowest monthly premium for the longest term possible given their age, health, and smoking status. This ensures a stable fixed cost and the peace-of-mind knowing they are covered for their desired length of time: Typically, 10, 20, 30 years or to age 65 or 100, depending on their provider.

However, there is another term insurance which is not mentioned quite as much, that works a little differently and offers insurance seekers added flexibility and options with their coverage. Annual renewable term life insurance, while not the most popular or well-known product, has some features that set it apart from level term insurance and make it a useful option for specific financial situations.

What is Annual Renewable Term life insurance?

Annual Renewable Term (ART) life insurance is a short term life insurance policy which locks in your premiums for one year and can be optionally renewed at the end of each year. 

The insurance company guarantees to renew the policy yearly for a set number of years. 

The premium rate is guaranteed but not level: it increases every year. While, yes, the price increases, you are still guaranteed your insurability every year you renew your term. The premium rates start low at the beginning of the policy but increases every year as the age increases, given the rise in mortality risk of the insured person.

Annual renewable term life insurance caters to individuals seeking temporary life insurance coverage at a low cost.

Learn more about renewing life insurance.

How does Annual Renewable Term life insurance work?

Just like any other form of life insurance, the annual renewable term life insurance offers financial protection to your dependents, in the event of your passing away, during the term of the policy.

To obtain ART, you have to first establish your insurability with a medical questionnaire or further medical underwriting through a medical exam and/or blood work.

Once your insurability is established, you choose your death benefit amount and find out what your monthly (or yearly if you choose) premium is. You now have life insurance for the year, and can renew each year until you feel you no longer need the coverage or want to look into other options such as term, whole, or universal life insurance.

The first year’s premiums are typically much lower than what one would pay in a longer term life insurance policy, but keep in mind they do increase every year. While the increase may appear minimal in the early years of the coverage, they will change substantially once you hit higher ages.

Also keep in mind that in most cases annual renewable term life insurance is not a long-term solution (more on this below). If you continue to renew your coverage beyond the initial first few years, you may quickly approach the point where a 10 or 20 year term life insurance policy would have a lower premium than what you currently pay. Unfortunately, you’ll have no time machine to go back and choose the least-expensive option at this point.

How much does Annual Renewable Term life insurance cost?

Below are the annual premiums a healthy, non-smoker at age 40 would qualify for with both ART coverage and 10-year term life insurance for $100,000. In this case, the applicant would save hundreds of dollars over the 10 year period by locking in a rate for pure term life insurance; there are no cost savings here through ART coverage.

Premiums for $100,000 Coverage, Non-Smoker, Good Health, 10-Year Term, Age 40-49

This example for the same circumstances at age 50 are a little different. While there is slight savings in the early years with ART, the annual renewable premiums are substantially higher in the later years. After 10 years, one who chose term life insurance would save about $800 (male: $833, female: $793).

Premiums for $100,000 Coverage, Non-Smoker, Good Health, 10-Year Term, Age 50-59

The savings are even more pronounced in one’s sixties. Below are the premiums for the same $100,000 policy for a 60-year-old non-smoker. A male applicant could save over $3,300, and a female applicant would save over $2,500, at the end of the term as opposed to continually renewing their Annual Renewable Term coverage.

Premiums for $100,000 Coverage, Non-Smoker, Good Health, 10-Year Term, Age 60-69

Why would someone choose Annual Renewable Term life insurance?

There are several situations where an annual renewable term life insurance policy makes sense. 

Short term debt obligations: Those carrying a temporary debt can find annual renewable term policies useful. If you are carrying a mortgage debt or car loan, but know you will be selling that asset to pay off the debt in the near future, an annual renewable policy can be a cost effective way to protect yourself in this period.

For those that rely solely on workplace benefits for their life insurance coverage needs, ART policies can offer a temporary solution when one is between jobs or find themselves temporarily unemployed.

Another ideal use case for ART coverage is for those who need insurance immediately, but intend to improve their health to the point where it would lower their premium for another form of insurance.

Some other uses for ART coverage include:

• Business owners looking to cover a short-term loan
• New parents making sure they are covered while they weigh all of their insurance options.
• Smokers who can take the time afforded to them through ART coverage to quit smoking permanently and dramatically lower their future insurance premiums.

What are the differences between ART and term life insurance?

Despite both being temporary forms of life insurance, annual renewable term life insurance does have some key differences with traditional term life insurance.

How do you buy annual renewable term life insurance?

Not all Canadian life insurance providers offer ART policies. Companies like Empire Life have options for annual renewable term life insurance with the additional option to convert that coverage to a 20-year term life insurance policy, should you decide that is the right option for you down the road.

Regardless of whether you choose a term life policy or think an annual renewable term is what your coverage needs call for, our licensed brokers have decades of experience helping Canadian insurance seekers find the right coverage at the right price for their unique coverage needs. 

There are many factors one must consider when contemplating who should get no-medical life insurance. Time commitment, health issues, iatrophobia (the fear of doctors) – the list goes on. Before you start your search for no-medical life insurance, find out if it’s the right fit for your needs at this time.

Definition of no-medical life insurance

No-medical life insurance is just that. Life insurance issued to an applicant without the need for medical underwriting; a process that typically entails a medical exam by a paramedical service employed by the insurance company you’ve chosen to work with. The medical exam typically includes a blood test, a urine test, and a check of your vitals (blood pressure, and height and weight) in addition to a medical questionnaire. On the other hand, no-medical exam policies exclude the body fluid sample collection and rely solely on the questionnaire.

Digging deeper, no-medical life insurance comes in three different varieties: accelerated issue, simplified issue, and guaranteed issue. Each policy type requires a different level of scrutiny into your health and medical history, and their premiums reflect this. Typically, accelerated issue life insurance will have the lowest premiums due to its more in-depth, dynamic medical questionnaire, while guaranteed issue life insurance has the highest premiums as it asks for virtually no-medical history from its applicants.

How do I know if I should get no-medical life insurance?

Whether for one of the reasons stated above, or another concern you have when it comes to medical underwriting, you have many factors to consider whether you want to go forward with no-medical life insurance. As we mentioned, no-medical life insurance policies are priced differently than those that are medically underwritten. And by different, we mean more expensive.

Thus, keep that in mind when contemplating the following scenarios. You can save a substantial amount of money by going through medical underwriting for term life insurance if you have that option. Before proceeding with any life insurance policy, speak with your broker. Licensed experts – like ours at PolicyAdvisor – are specially trained to help you navigate insurance questions like these. We have years of experience helping Canadians pick the right life insurance for their needs and their budgets, all while saving them time completing their applications digitally.

Should I get no-medical life insurance if I have underlying health conditions?

no-medical life insurance is certainly an option for those with health concerns. If you’ve survived a recent critical illness (like cancer, heart disease, etc), or suffer from a chronic illness, your number of traditional insurance options may be slim Not only that, but coverage could be denied once you apply or prohibitively expensive once you are provided with the final price after a medical exam.

In some of these cases, your best option may be no-medical life insurance. However, speak with a licensed broker. They will have the best idea of whether no-medical life insurance or a traditional option is best for you. Keep in mind that CLHIA statistics show only a small number of life insurance applications are denied each year.

Read More: Can I Get Life Insurance With Pre-existing Health Conditions?

Should I get no-medical insurance if I have diabetes?

The above answer is also sound advice for diabetics applying for life insurance or contemplating no-medical life insurance. While, as a diabetic, you may have assumed you won’t qualify for traditionally underwritten life insurance, that’s simply not the case. 

Diabetics with demonstrably consistent, tight control of their blood sugar, and in general good health can qualify for the same insurance pricing as anyone else applying for underwritten life insurance.

However, perfect control is not a reality for many of the millions of Canadians living with diabetes. Even a hemoglobin A1C above 7 can result in an increased rating from an insurance company. If your diabetes control is at a point where it results in an incredibly high insurance rating or outright decline of an application, then you may consider no-medical life insurance.

Should I get no-medical life insurance if my previous application was denied?

Having your life insurance application denied is not ideal, but it does not mean you have no choice when it comes to protecting your income for your family or beneficiaries. An application denial is a scenario where you may instantly choose to navigate the different no-medical life insurance policies – like simplified and guaranteed issue – to ensure you get coverage. Before you do so, speak with your broker and find out why your insurance was denied. You may have the chance to reassess your application, reapply with a different insurance company, or have it insured with exclusions for the specific issue that triggered its denial. 

Either way, having an experienced broker by your side will help you find the right policy for you on your new search or modify your previous application so that it works for your situation.

Should I get no-medical life insurance if I am healthy and want to save time?

The short answer: yes. 

The long answer? There are many ways to save time when comparing and buying life insurance. First and foremost, a digital life insurance broker can help you through the insurance buying process. They can provide you with quotes in minutes and guide you towards the best choices that can save you money; all in a fraction of the time a traditional mortgage broker would take to get you covered.

What’s even better is – thanks to their years of experience – our brokers can guide you to accelerated issue life insurance options that don’t require face-to-face medical exams, yet offer comparable pricing to other medically underwritten insurance policies. Companies like Assumption Life, Canada Protection Plan, Desjardins, Empire Life, Manulife, Industrial Alliance (iA), RBC and others offer a substantial amount of term life coverage to those in good health without the need for a medical exam. Depending on your age, some of these companies can offer coverage of as much as $5 million dollars to healthy applicants without requiring a medical exam.

While there is nothing better than instant – our licensed brokers can do the time-consuming leg-work involved in finding you the best policy while avoiding the higher premiums of some no-medical options. no-medical life insurance is not the sole choice if you want to save time AND money.

Should I get no-medical life insurance if I don’t like the doctor’s office?

You certainly can, but there are other options if you want to get life insurance without entering your doctor’s crowded waiting room. All insurance companies offer a paramedical appointment to collect your health information. A nurse can visit you at home or your place of work and collect bloodwork, blood pressure, and the other information required by underwriters. 

But, as alluded to previously, there are some providers that offer accelerated issue term life insurance policies. Depending on your health and how you answer the initial medical questionnaire, you may qualify for coverage without ever having to do a medical.

I’m not sure if I need no-medical life insurance. Who can I talk to?

We thought you’d never ask! PolicyAdvisor’s mission is to help Canadians save time and money as they seek out life insurance coverage. We work with 20 of Canada’s biggest and best insurance companies. Our experience with these providers grants us the ability to find the right, custom coverage for your needs. And that means saving you time and recommending no-medical insurance that fits your budget and needs when appropriate. Reach out and we’ll help you start comparing life insurance quotes online. In the mean time, check out our life insurance calculator so you have an idea of how much coverage you may need.

1. What is non-medical life insurance?

Non-medical life insurance or life insurance without a medical exam refers to the fastest-growing category of life insurance products in Canada. Non-medical life insurance policies do not require a medical exam, blood test, or an assessment of your vitals (blood pressure, height and weight etc). Without the requirement for such tests, life insurance coverage can be obtained much faster – sometimes even instantaneously. No wonder it’s so popular.

2. What are the benefits of life insurance coverage without a medical exam?

Life insurance without a medical exam has historically been made available to those individuals that have moderate to severe health issues. These policies are usually more accommodating in their underwriting requirements and therefore cater to harder to insure individuals or those that have been declined health coverage. Increasingly, such coverage is also available through accelerated underwriting to healthy individuals that may want to set up coverage quickly and avoid the pain points of traditional underwriting (or just the major pain point associated with syringes!).

In effect, non-medical coverage offers several benefits such as:

• Easier underwriting process
• Faster to complete the process
• More accommodating for those with prior health considerations or previously declined applications
• Avoid dealing with blood work or needles
• No face to face interaction necessary

3. Is there a waiting period for non-medical life insurance claims? Does my coverage start right away?

The waiting period for a life insurance policy refers to the length of time (usually up to 2 years) when claims may not be paid by insurance companies. Most non-medical options allow for coverage to be available instantly after approval, without any waiting period.

There are some products in the market where the coverage may be deferred. Such products are typically offered to individuals with severe health considerations or those currently undergoing treatment.

4. Which companies offer life insurance coverage without a medical exam?

Most Canadian life insurers offer a substantial amount of life insurance coverage without requiring a medical test. At PolicyAdvisor, we work with the best life insurance companies in Canada and have access to both their standard (medically underwritten) products and non-medical products.

Many of the biggest life insurance companies in Canada such as Manulife, Canada Life, Desjardins, Industrial Alliance, RBC Life Insurance, BMO Life Insurance and others are now able to offer significant life insurance coverage without requiring a blood test. In some cases, for healthy applicants, coverage as much as $5 million can be offered without medicals (also known as without fluids) using these companies’ accelerated underwriting processes.

There are also leading providers, such as Canada Protection Plan, Assumption Life, and Industrial Alliance (iA) that specialize in offering simplified life insurance products, that are available without a medical exam. This type of simplified coverage is best suited to individuals with moderate to severe health issues. In such cases coverage is limited to a maximum of $500,000.

5. Is non-medical insurance expensive?

If you are in good health, then life insurance coverage without a medical exam offers comparable premiums to coverage obtained after bloodwork and vitals are taken.

If however you have some prior health considerations, then the premiums may be higher to compensate for the elevated risk the insurance company is taking on.

6. Can I get joint coverage with my spouse without a medical?

Non-medical term insurance is generally issued on an individual basis. However if you and your spouse are in good health and qualify for accelerated underwriting, then you will be able to get joint coverage without medicals. Our advisors can easily assist you when reviewing your options for joint coverage.

7. Should I get non-medical insurance if I am healthy?

If you want your coverage approved and in place quickly then we recommend you take a non-medical policy if you are eligible. Without the time commitments of in-person blood work and tests there is no downside or price difference for non-medical coverage.

Some of the insurance providers we work with offer more favorable rates for customers who are in good health. For example, Canada Protection Plan has products such as Express Elite that are specifically designed for applicants in good health, who want quick coverage.

8. Are non-medical policies safe? Will my non-medical life insurance pay out a claim?

Yes! Of course, they are safe and will pay out a claim. The claims process for non-medical life insurance works exactly as it would for any other type of life insurance. The process for applying is easier and faster than regular medically underwritten issuance. However, there is no difference in the claims process between life insurance with a medical and without a medical.

9. I have Diabetes. Can I qualify for insurance without medicals?

There are several options for life insurance coverage for diabetes. The availability of these options depends on the age of the applicant, how long they have had diabetes, the degree of control, and the presence of any related complications if any. Non-medical policies are usually more accommodative for those with prior health conditions, including diabetics. Get in touch with us and we will be able to go over the details of your diabetes history and ensure you get a plan that’s right for you.

10. Can I get life insurance without a medical if I have been treated for cancer?

There are several on-medical life insurance options for those that have successfully overcome cancer. The coverage options depend on your age, type of cancer, the number of years since your treatment was completed, and a few other factors. At PolicyAdvisor, our advisors are able to work with you to find a suitable non-medical insurance product, personalized for your needs.

Read more about life insurance after cancer. 

11. Can I get non medical life insurance if I have heart disease and have had angioplasty?

You may be able to qualify for certain types of non medical life insurance depending on the severity of the heart condition and the number of years since the heart treatment or angioplasty was completed. Generally speaking, if the time since your angioplasty was completed is more than 3 years, you should qualify for life insurance coverage.

Read more about getting life insurance with a heart condition. 

12.  Can I increase my coverage later?

Most insurance companies will require you to complete a new application. This will include a new questionnaire. If there is no change in your health or lifestyle situation, then you can always apply for additional coverage, under a new policy.

13. Can I get insurance without a medical if I am on a work permit?

Yes, you can! Some insurers provide life insurance coverage for individuals on a temporary work permit or a student visa, albeit for lower coverage amounts. You do not have to be a Canadian citizen or permanent resident to apply for coverage without a medical exam.

14. Can I get non-medical insurance if I’m recovering from a chronic illness?

If you have a chronic illness or are recovering from one, there may be options available for your life insurance needs. Guaranteed life insurance is available for those currently receiving medical treatment, although these products usually have a waiting or deferral period. For example, if you have recently been diagnosed with a mental health disorder such as anxiety, depression, or bipolar, your insurance provider may require a two-year deferral period. 

Our experienced life insurance advisors are happy to assist you. Schedule a call and we will be ready to assist.

15. What is the application process for non-medical life insurance?

As Canada’s best life insurance advisor, we are making the life insurance purchase process radically simple and easy. Our in-house advisors will help you complete a digital application form that will be electronically submitted to the insurance company. The form will ask a few medical and non-medical questions. Once the application is submitted, it takes 1 to 2 weeks for approval, although in some cases coverage can be approved instantly. Once the policy is approved, you may also have the option to receive the policy electronically.

When couples start researching and planning their life insurance choices, a common question that arises is whether to opt for Single versus Joint life insurance. Once a couple determines they plan on spending a significant amount of time together – if not the rest of their lives – they typically share some financial responsibilities. 

Term life insurance is a great choice for couples to ensure all their temporary financial obligations are met in such dire circumstances, but there are choices when it comes to joint coverage. 

Let’s look at what these are, their positives and negatives and finally, which one is better.

What is Single Life Insurance?

Single life insurance is simply life insurance that covers only one individual. A single life insurance policy pays out the chosen lump sum benefit if the insured individual passes away during the ‘term’ or length of the policy. It is not tied in any way to a person’s marital status. When you read about life insurance, it refers to individual or single life insurance, unless otherwise specified.

In the context of a couple seeking life insurance:

• Both the partners can apply for and obtain their own single or individual life insurance
• The individual coverages can be customized to their respective needs. In other words, the partners can have their respective coverage amounts, coverage lengths, and even have respective beneficiaries for their policies, if they may so desire.
• If one of them passes away, the beneficiary will receive the proceeds of life insurance. The surviving spouse will continue to have coverage.

What is Joint Life Insurance?

A joint life insurance policy covers two or more lives. It is usually purchased by couples who want to cover themselves jointly under one policy.

It may also be purchased in a business context. By insuring the lives of two or more business partners, the death benefit can be used to settle any business liabilities upon the passing away of a key stakeholder. While it sounds simple, the exact way joint life insurance works depends on the type of insurance you choose: Joint first-to-die or Joint last-to-die.

What are the different types of Joint Life Insurance?

There are two types; joint first-to-die and joint last-to-die.

Joint first-to-die life insurance

Joint first-to-die is a type of life insurance where the full insurance coverage amount is payable upon the death of the first of the two or more individuals insured under the policy. 

In the case of a joint first-to-die policy covering couples; when either one of the insured individuals passes away, the beneficiary, who in most cases is the surviving partner, receives the death benefit. 

Similar to traditional term life insurance, the surviving partner can use the amount for whatever pressing financial needs they may have – be it mortgage protection, paying off other debts, or providing for the family by replacing lost income. Upon the payment of the claim, the policy generally expires and the surviving partner may no longer have insurance coverage, unless requested.

A joint first-to-die policy is best suited for those with a significant financial obligation that would fall on the surviving partner such as an outstanding mortgage balance or in cases where the surviving spouse depends substantially on the income of their spouse for their ongoing living needs. In such cases, the surviving spouse can use the death benefit to clear off the immediate financial liability or to take care of living expenses.

Joint first-to-die policies can also offer some unique benefits:

Insurability privilege: Within a limited period following the death of the first insured, the surviving insured can request continued life insurance coverage from the insurance company without undergoing new medical underwriting. However, such coverage is more expensive as it is offered as permanent life insurance and the premium is recalculated based on the current age of the surviving insured. Most companies will specify a maximum age for coverage eligibility of the second insured. 

Double payout on simultaneous deaths: Many companies offer a double benefit option on joint first-to-die policies, whereby an additional coverage amount will become payable to the beneficiary if both the insured die together or within a short time (45 or 90 days) of each other. 

Joint last-to-die

Joint last-to-die life insurance pays out once both insured individuals pass away. The deaths can happen simultaneously or years apart, but no payment is made until both the insured have died.

Let’s assume a couple takes out a 20-year joint last-to-die policy. There is no payout if only one insured individual passes away in year 10. Instead, the surviving partner needs to continue paying premiums for the rest of the term. Once the surviving partner also passes away, their chosen beneficiary receives the death benefit , provided it is within the policy term length.

A joint last-to-die policy is better suited for when there are no significant financial obligations on the surviving spouse. Instead,  the coverage is used to provide for final expenses or leave a legacy for children or other dependents, after both partners have passed away. Most couples that choose joint last-to-die policies name their children as beneficiaries to help ensure their future financial well-being.

Read more about how different types of life insurance work in Canada.

Positives of Joint Life Insurance

A joint life insurance pays out a claim regardless of which of the insured passes away.

Taking on one joint policy is generally less expensive than taking out two individual life insurance policies; this is great if you’re trying to tighten your household budget. However, keep this in mind: if an individual or both parties applying for joint coverage are young and in good health, then they could get two individual life insurance policies while only paying just a little bit more. 

Negatives of Joint Life Insurance

Joint life coverage allows only limited personalization. The amount and length of coverage has to be the same for each of the insured. 

Furthermore, a joint life insurance policy only pays out once. While obtaining two individual policies instead increases the cost, it means double the coverage as two independent policies each pay out on their own. 

Again let’s use our example of a 20-year term life insurance policy. With individual policies, if one member of the couple passes away in year 10, their policy pays out but the remaining partner’s policy is still active.

While we all hope our relationships last forever – that unfortunately isn’t always the case. If one finds themselves in a situation where they are no longer in a relationship with the partner with which they applied for a joint life insurance policy, it may prove difficult to split the joint policy into two individual ones with the same coverage. Instead, one may have to apply for life insurance again, and risk not qualifying at the same rating as before.  

Joint first-to-die coverage has another similar problem – if the surviving partner needs to find new coverage once the initial policy has paid out, it will be difficult or more expensive for them to find it later in life.

Read more about what affects the cost of life insurance here.

Which is better: Single or Joint First-to-Die Life Insurance for couples?

Why would you want joint life insurance?

Joint life insurance can be better suited for couples if:

• They want to align their premium costs to a limited budget
• They have one discrete need (such as a mortgage debt) and there would be no residual need for covering the surviving partner once a claim is paid.

Why would you want individual life insurance?

Individual life insurance can be better suited for a couple if:

• They have multiple needs such as providing protection for young children, or ongoing lifestyle expenses for the family. Individual insurance allows coverage to continue for surviving spouses, even if one of the spouses passes away and a claim is paid.
• They want coverage that is customized for each of the spouses such as different amounts or terms of coverage.
• They are able to pay the slightly higher premiums than joint coverage.

Can you get joint life insurance if you are not married?

Yes you can. As long as you have reasonable interest (also referred to as insurable interest) in the longer life of the other insured, you are able to get joint life insurance coverage. This insurable interest may be due to a personal relationship (in the case of spouses or common law partners) or due to common business interests like we mentioned above. Common-law couples are therefore eligible to apply for joint life insurance. 

What happens to a joint life insurance policy after divorce?

A divorce can get further complicated with a joint life policy. A couple can certainly choose to retain the original joint life insurance coverage, post the divorce, if they so intend to. But if they want their coverage to also go separate ways, then they have no other option but to cancel the joint policy.

Most joint policies will offer a limited period insurability privilege whereby upon divorce or dissolution of the union, any of the insured under the original joint policy can request for individual life insurance benefit, without undergoing new medical underwriting. Such coverage cannot exceed their pro rata share of the previous joint benefit. The premium is however always more expensive since it is based on the age of the insured at the time of the request. 

There is much more flexibility with individual coverage in the event of a divorce. Two respective individual coverages can continue to be independently retained. Although on most occasions, the individual owners may want to change beneficiaries if they had named each other as the beneficiary prior to the divorce.

Read more about life insurance and divorce.

Ultimately, while joint life insurance is slightly less expensive than taking out two individual single policies, it is not as flexible as individual term life insurance.

If you’re able, we would urge you to look at an individual or single life insurance policy for yourself and your partner when contemplating the best life insurance company for your needs.

The information above is intended for informational purposes only and is based on PolicyAdvisor’s own views, which are subject to change without notice. This content is not intended and should not be construed to constitute financial or legal advice. PolicyAdvisor accepts no responsibility for the outcome of people choosing to act on the information contained on this website. PolicyAdvisor makes every effort to include updated, accurate information. The above content may not include all terms, conditions, limitations, exclusions, termination, and other provisions of the policies described, some of which may be material to the policy selection. Please refer to the actual policy documents for complete details. In case of any discrepancy, the language in the actual policy documents will prevail.  All rights reserved.

If something in this article needs to be corrected, updated, or removed, let us know. Email editorial@policyadvisor.com.

Have you recently purchased a home or refinanced your mortgage? If so, you have probably opened your mailbox or email inbox to find several offers for mortgage insurance. Many people confuse mortgage insurance with other products, like mortgage default insurance. Before you make a choice, look at mortgage insurance vs life insurance for your protection needs.

There are a lot of good reasons to purchase life insurance in the first place, as anyone with young children or other dependents knows. Life insurance protects your family and loved ones if anything unexpected happens to you. But it’s not the first thing on new homeowners’ minds when thinking about protecting their new purchase.

What is mortgage default insurance?

Mortgage default insurance is a mandatory insurance policy required when the down payment for your newly purchased home is above 5% but less than 20% of the value of your home. This insurance is offered to protect the lender or financial institution, in case you as the borrower are unable to make the mortgage payments for any reason. In Canada, mortgage default insurance is currently offered by two entities: Genworth and Canada Mortgage and Housing Corporation (CMHC).

On the other hand, mortgage insurance is a product that you elect to purchase for a very specific reason. What is that you ask?

What is mortgage insurance?

Mortgage insurance is an insurance policy, generally offered by your lender, that pays off the mortgage should the borrower die, while the principal on the loan is still outstanding. A mortgage insurance policy (sometimes referred to as a mortgage life insurance policy) requires a fixed cost premium payment by the borrower to cover a reducing mortgage debt for the benefit of your lender until the mortgage balance is paid. With mortgage insurance, the lender is covered. However, it doesn’t fully protect you or your needs. Our experience as insurance professionals shows there are other products that do a much better job of protecting your mortgage.

Read our full review of the Best Mortgage Insurance Companies in Canada. 

Are there alternatives to mortgage insurance?

YES! As mentioned, mortgage life insurance entails a fixed cost payment that covers a diminishing mortgage debt for your financial institution until the mortgage is paid. The alternative to mortgage life insurance is mortgage protection through term life insurance. It can better protect your investment and the life you’re building for your loved ones.

What is mortgage protection insurance?

Mortgage protection insurance is an insurance policy offered by insurance companies that protects the borrower through a term life insurance product. It offers a lot more flexibility than traditional mortgage insurance. Term life insurance can be tailored in a way to make certain that families can pay off the mortgage balance and also provide coverage for many other needs, in case an income earner passes away. Typically, you can choose between a range of terms such as 10-, 15-, 20-, or 30-year term to closely match the length of time you have left to pay off the mortgage.

How much mortgage protection do I need?

You would generally buy at least enough mortgage protection coverage to pay the balance of your mortgage, which may be at least $160,000 (StatsCan) Mortgage protection through life insurance can make sure that a surviving spouse and children will be able to keep the family home, even if the homeowner dies unexpectedly.

Through term life insurance you have the option to consider a policy with a death benefit larger than your mortgage to cover other such obligations as your child’s education, other debts, and living expenses for survivors. Our insurance calculator can help you determine the amount of life insurance you need.

Want to learn even more about mortgage insurance vs life insurance? Read our Honest Guide To Mortgage Insurance or schedule a call with one of our licensed brokers to discuss your specific protection needs. Even better: get a free instant quote for mortgage protection with our online tool – you only have to answer a few basic questions to get a clear picture of how much it may cost to protect your mortgage.