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

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

How does adding riders affect whole life insurance premiums?

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

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

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

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

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

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

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

Which premium payment option has the lowest monthly cost?

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

How can I reduce the cost of whole life insurance?

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

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

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

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

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

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

Quick summary: Average life insurance costs in Canada

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

Factors affecting life insurance cost in Canada

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

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

Why do men pay more for life insurance than women?

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

Life insurance costs by policy type

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

What is the cost of term life insurance in Canada?

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

Term life insurance cost in Canada

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

What is the cost of whole life insurance in Canada?

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

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

Cost of whole life insurance in Canada

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

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

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

Cost of a no-medical life insurance policy

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

Life insurance rates chart by coverage amount

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

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

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

Cost of a $100,000 life insurance policy

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

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

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

Cost of a $250,000 life insurance policy

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

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

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

Cost of a $500,000 life insurance policy

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

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

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

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

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

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

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

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

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

Life insurance costs by applicant category

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

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

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

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

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

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

How much is life insurance per month for seniors?

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

Cost of life insurance for seniors

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

How much is life insurance per month for children?

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

Cost of whole life insurance for a female child

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

Cost of whole life insurance for a male child

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

How much is life insurance per month for couples?

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

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

*Quotes based on a $500,000 joint term policy in coverage for smoker and non-smoker couples in regular health seeking coverage for a 10-year term

Life insurance costs by insurance company

The cost of term life insurance from Canada’s leading insurers typically ranges from $14 to over $230 per month for the sample policy shown below. Premium differences occur because each insurer uses its own underwriting guidelines, pricing models, and risk assessment criteria. As a result, two insurers may offer different premiums for the same applicant and coverage amount.

The table below compares illustrative monthly premiums from some of Canada’s leading insurance companies for the same applicant profile.

Life insurance monthly costs by insurer

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

How does term length affect life insurance premiums?

The cost of term life insurance ranges from about $22 to $144 per month in the example below, depending on your age and the length of the policy. For the same applicant and coverage amount, 10-year term policies are the most affordable, while 20-year and 30-year terms cost more because they provide coverage for a longer period and increase the likelihood of a claim during the term.

Cost of life insurance as per term length

*Illustrative monthly cost of a 10-year, 20-year, and 30-year term life insurance with $500,000 in coverage for a male non-smoker

Do life insurance premiums increase over time?

It depends on the type of life insurance policy. Term life insurance premiums are usually fixed for the length of the term, so your premium generally does not increase during that period. With annually renewable term insurance, premiums can increase each year. On the other hand, whole life insurance premiums are fixed for the life of the policy.

How much life insurance do I need to buy?

The right life insurance coverage depends on your financial responsibilities, income, debts, and family’s needs. Here’s how to estimate the amount:

• Income replacement: Aim for 7-10 times your annual income. For instance, if you have an annual salary of $70,000, your life insurance coverage should range between $500,000 and $700,000
• Debt & expenses: The payout should cover the mortgage, loans, funeral costs, and daily living expenses for dependents
• Future needs: Consider childcare, education, and long-term financial security for your family
• DIME formula (Debt, Income, Mortgage, Education): Use the DIME formula and add up these expenses for a tailored estimate
• Affordability: Balance coverage with budget to make sure you purchase a plan that you can afford to pay for

Do individuals with pre-existing health issues pay higher life insurance premiums?

Yes, individuals with pre-existing health conditions generally pay higher life insurance premiums because they pose a greater risk to insurers. The exact increase depends on the type and severity of the condition, how well it is managed, your age, and the insurer’s underwriting guidelines. In some cases, applicants may still qualify for standard premium rates if their condition is stable and well-managed.

Depending on your medical history, insurers typically make one of the following underwriting decisions:

• Standard premiums: If your condition is minor, stable, and well-managed, you may qualify for standard rates
• Higher (rated) premiums: If your condition increases the insurer’s risk, you may be approved with a higher premium or an additional rating applied to your policy
• Guaranteed issue or no-medical life insurance: If you are declined for traditional life insurance due to a serious medical condition, you may still qualify for guaranteed issue or no-medical life insurance. These policies don’t require a medical exam but generally come with higher premiums and lower coverage limits

Which is cheaper: term life or whole life insurance?

Term life insurance is cheaper than whole life insurance because it provides coverage for a set period, such as 10, 20, or 30 years, without building cash value. Whole life insurance provides lifelong coverage and may build cash value, so its premiums are higher. Both serve different financial needs; hence, you should consider other features when choosing the policy type. 

Is life insurance worth the cost in Canada? 

Yes, life insurance is worth the cost in Canada if you have financial dependants or have ongoing loans or any other financial obligations. The value depends on your financial situation and coverage needs. Term life insurance may provide affordable protection for temporary needs, while whole life insurance can offer lifelong coverage and additional features.

10 ways to lower your life insurance premiums

There are several ways to reduce the cost of your life insurance premiums, such as maintaining a healthy lifestyle, choosing the right policy, comparing quotes from multiple insurers, and more. Listed below are the factors that will help you lower life insurance premiums:

• Buy life insurance early: Purchasing a policy when you are younger and in good health can help you lock in lower premiums for the duration of your coverage.
• Quit smoking: Most insurers offer significantly lower premiums to applicants who have remained tobacco-free for at least 12 months
• Maintain good health: Managing your weight, blood pressure, and other health conditions can improve your eligibility for preferred rates
• Choose the right coverage amount: Buy enough coverage to meet your financial needs without paying for more insurance than necessary
• Opt for term life insurance: If you only need coverage for a specific period, term life insurance is generally much more affordable than permanent life insurance
• Consider laddering life insurance policies: Instead of purchasing one large policy, you can combine multiple term life policies with different coverage amounts and durations. This allows your coverage to decrease as your financial obligations reduce, helping lower overall premium costs.
• Choose riders carefully: Only add optional riders, such as critical illness, child, or disability riders, if they meet a specific need. Unnecessary riders can increase your premium
• Select a shorter policy term: Shorter term lengths usually cost less than longer-term policies with the same coverage amount
• Pay your premiums annually: You may reduce your overall cost when you pay annually instead of making monthly payments
• Compare quotes from multiple insurers: Compare and find the best life insurance policy for your needs

To get the most affordable life insurance quotes, reach out to our expert advisors at PolicyAdvisor. Our advisors will help you get quotes from the top life insurance providers in Canada and choose the one that best fits your needs and budget.

What are life insurance premiums?

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

What is the average cost of life insurance in Canada?

The cost of life insurance in Canada starts at around $7 per month for a healthy young adult purchasing a basic term insurance policy. The premiums can range from $7 to over $3,276 per month, depending on your age, health, coverage amount, policy type, and insurer.

What is the cheapest life insurance in Canada?

Term life insurance is generally the cheapest life insurance in Canada. Because it provides coverage for a fixed period and does not build cash value, premiums are significantly lower than those for whole life or universal life insurance.

Why are life insurance premiums different for men and women?

Life insurance premiums are generally higher for men because, on average, men have a shorter life expectancy than women. Insurers use actuarial data to estimate risk, which results in lower premiums for female applicants with similar health and lifestyle profiles.

Is it cheaper to buy life insurance when you are younger?

Yes, buying life insurance at a younger age usually results in lower premiums because younger applicants generally have fewer health risks and a longer life expectancy. Purchasing coverage early can help lock in lower rates for the duration of your policy.

Can I get life insurance without a medical exam?

Yes, many insurers offer no-medical or simplified issue life insurance that does not require a medical exam. These policies are easier and faster to obtain but usually have higher premiums and lower coverage limits than fully underwritten life insurance.

How much life insurance do I need?

The amount of life insurance you need depends on your income, financial obligations, and future goals. While it is recommended to get coverage equal to 10-15 times your annual income, the ideal amount varies based on factors such as your mortgage, outstanding debts, living expenses, your children’s future education costs, and any existing savings or life insurance coverage. The easiest way to determine the right amount is to use our life insurance calculator, which estimates your coverage needs based on your unique financial situation and helps you choose a policy that provides adequate protection for your loved ones.

What is the cost of $100,000 term life insurance?

The cost of $100,000 term life insurance for a male non-smoker ranges from  $9 to $44 per month. For females, it can range from $7 to $33 per month. You can compare quotes from multiple insurers to find a policy that fits your coverage needs and budget.

Why does life insurance cost vary by insurer?

Life insurance premiums can vary between insurers because each company uses its own underwriting guidelines and risk assessment. Two insurers may assess the same applicant differently based on factors such as age, health history, occupation, smoking status, and coverage amount. 

Can I be denied term life insurance based on age?

Yes, age can affect whether you qualify for term life insurance, as insurers typically set minimum and maximum age limits for new applicants. Older applicants may have fewer term options available, higher premiums, or may not qualify for certain policy terms. 

Canada Life is one of Canada’s leading providers of participating whole life insurance. Its current lineup includes Wealth Achiever, Balanced Achiever, and Estate Achiever, giving policyholders options designed around different priorities, from earlier cash value growth to long-term estate value. All three plans provide lifelong coverage and offer guaranteed premium payment options of Max 10, Max 20, and Pay to age 100. Canada Life also offers a unique participating plan, My Par Gift, which is designed in a way that the designated charity receives the death benefits. 

Quick review:

• PolicyAdvisor ratings: 5/5
• Best for: Those who want a choice between three participating whole life strategies, from early cash value to balanced growth or long-term estate value, plus dedicated charitable giving through My Par Gift
• Skip if: You are looking for a standalone non-participating whole life plan

Frequently asked questions

Is Canada Life’s whole life insurance worth it?

Yes, Canada Life’s whole life insurance policy may be worth considering if you want lifelong protection with cash value growth that you can access in many ways. With Canada Life, you can also choose from multiple payment options, dividend options, cash value access, and riders. 

Does Canada Life offer participating policies with dividends?

Yes. Canada Life offers participating whole life policy plans. The available participating whole life insurance policies include Wealth Achiever, Balanced Achiever, and Estate Achiever. It also offers My Par Gift, a participating life insurance product designed specifically for charitable giving. Dividends are not guaranteed.

Do I need medical underwriting for a Canada Life whole life insurance plan?

Yes, Canada Life whole life applications are subject to underwriting, which can vary depending on the applicant and the coverage requested. If your policy includes the Guaranteed Insurability Rider, you may be able to apply for additional permanent life insurance on specified option dates without providing new evidence of insurability, including health.

How does the Canada Life participating account work?

Canada Life’s participating account pools premiums from all participating policyholders and invests them in a diversified portfolio of assets. The account’s earnings are influenced by various factors, including investment returns, mortality claims, policy cancellations, and operational expenses. Canada Life may distribute a portion of those earnings as policyowner dividends, although dividends are not guaranteed.

What is the children’s term life insurance rider?

The children’s term life insurance rider is an optional add-on to Canada Life’s whole life insurance policies. It provides term life coverage for your biological, adopted, and stepchildren. 

What happens if I stop paying my premiums?

If you miss a payment on your Canada Life whole life insurance policy, you have 31 days to make it up. If the premium remains unpaid after this period, Canada Life will automatically take out a policy loan on your behalf, provided your policy has enough cash value. This loan will keep your policy active as long as there’s sufficient cash value to cover future premiums and interest charges.