Guide to Best Life Insurance for Seniors in Canada
See affordable life insurance quotes from PolicyMe and other top companies.
The best life insurance for seniors in Canada is:
- Term life insurance policies if you want flexible coverage.
- Whole life insurance policies if you have complex estate planning needs.
- No medical or guaranteed life insurance policies as a last resort if you’ve been denied coverage by traditional life insurance providers.
What is senior life insurance?
Senior life insurance isn't a separate type of life insurance. It refers to the policies seniors are eligible for. Though you're not a senior at 50, insurance providers and most life insurance companies often group people over 50 in the "seniors" category.
That's because there's a large jump in premiums at this age due to becoming higher risk as you age and potentially develop health issues. Securing life insurance from reputable life insurance companies is crucial for ensuring financial security and peace of mind.
Not sure if life insurance is worth it for seniors? Here’s when you might need it.
- Final expenses: Money to cover medical and burial costs, as well as other expenses required to settle your estate
- Income replacement: Funds for a spouse or dependent who relies on your salary, pension or annuity for daily expenses.
- Special needs child: Money to start a trust for a dependent who will need financial support for their lifetime.
- Debts: Money to pay off significant debts such as a mortgage or loan.
- Estate taxes: Funds to cover any possible estate taxes liability for your heirs.
- Inheritance: A tax-free financial death benefit to your beneficiaries after you pass
- Liquidity: A cash payout for an estate with non-cash assets, such as real estate or locked-in investments.
- Charitable bequest: A one-time donation to support a non-profit that’s near and dear to your heart.
Best life insurance policies for seniors in Canada
The best type of life insurance policy for seniors will depend on coverage priorities. It's best to apply for a fully risk-assessed policy first, even if you're worried you'll be denied coverage. You might still be able to get a reasonable policy at a decent price.
"Apply for a fully underwritten term policy first. Then try simplified issue life insurance.If these options don't work, look into guaranteed issue life insurance as a Plan B."
— Erik Heidebrecht, Licensed Life Insurance Advisor
Term life insurance for seniors: best for flexible coverage
Term life insurance provides coverage over a set period of time based on your specific needs. You can choose how long you want your term insurance policy to last, but the most popular term length to get is 15 years.
Term life insurance policies are usually the cheapest life insurance options for seniors with competitive pricing. But there may be some age restrictions around the term you can qualify for.
You're looking for a more affordable life insurance option. If you're approaching or currently retirement age and you have a limited budget, term life insurance can provide your family with financial protection at a lower cost.
PolicyMe has some of the most affordable term life insurance premiums in Canada and they also prioritizes customer satisfaction. Afraid you won't be approved? A customer recently told us in this review: "I never thought I would ever get insurance at my age, but this company made it amazingly easy and affordable."
Whole life insurance for seniors: best for complex estate planning
Whole life insurance also known as a permanent life insurance provides coverage for your whole life; as long as you continue paying the premiums, the whole life insurance policy will remain active.
A percentage of these payments are set aside in a savings or investment portion, so these plans can have a cash value component or a guaranteed cash value. But whole life insurance for seniors can be expensive and restrictive — there are a lot of rules when it comes to accessing the cash value portion.
You want to take care of your end-of-life expenses because there’s no risk that you’ll outlive your coverage. There’s a guaranteed payout, so it’s also suitable for permanent financial obligations, like providing for a disabled child after you’re gone.
You want to take care of your end-of-life expenses because there’s no risk that you’ll outlive your coverage. There’s a guaranteed payout, so it’s also suitable for permanent financial obligations, like providing for a disabled child after you’re gone.
No medical life insurance for seniors: best used as a “Plan B”
No medical life insurance, also known as simplified issue life insurance provides coverage without a medical examination or many health questions. You may be asked a few short medical questions about your health, but that’s about the extent of it.
However, you’ll pay for this convenience – life insurance costs are much higher and premiums for no medical life insurance for seniors in Canada can be very high.
By not knowing the extent of your medical history, life insurance companies are taking on the risk of covering you. For them it's like a risk so to minimize it, they provide you coverage but at a higher monthly rate compared to other policies out there.
You’ve been denied by traditional life insurance providers and need coverage for your situation. Think of these types of policies as a “Plan B."
Guaranteed issue life insurance for seniors: best used as a last resort
Guaranteed issue life insurance (also called "guaranteed acceptance life insurance") is a type of no medical policy that provides coverage to almost everyone, regardless of age, health or medical history.
But because approval is guaranteed, life insurance cost is very high and premiums for guaranteed life insurance coverage for seniors are the most expensive and provide the least amount of coverage.
You've been denied both by traditional insurers and other no medical options. Guaranteed issue policies offer small payouts and have a waiting period of at least two years. If you pass before the waiting period is up, a payout won't be issued, but the premiums paid will be returned to your estate.
See also: funeral insurance (also called final expense insurance) which is a type of coverage dedicated to only covering funeral costs.
Simplified issue vs. guaranteed issue vs. term life insurance, explained
Best life insurance companies for seniors in Canada
Have a better idea about what type of life insurance coverage you need, but still not sure where to start looking? Here are a few of the best life insurance companies based on the type of policy you’re looking for.
Worried you won't be approved for term life insurance policies now that you’re over 60? Or that you'll need to pay a hefty price? You don’t have to be. PolicyMe offers some of the best life insurance prices in Canada to give you a peace of mind.
How to get the best life insurance for seniors
To get the best life insurance as a senior, you’ll need to do some research and compare policy options. Here are some things to consider:
1. The cost of a life insurance policy in Canada
Finding the right balance between your coverage needs and the cost of your monthly premiums. Your policy term, amount of coverage and other features, like convertibility or guaranteed issue, will all impact life insurance cost.
2. The amount of life insurance coverage you need
Generally, your need for life insurance decreases as you get older. If everything has gone according to plan, you’ve paid off your biggest debts while your assets have had a chance to grow. But if you’re likely to leave behind debts or have family members or loved ones dependent on your income for their daily expenses, then it’s necessary to have a life insurance policy in place for their protection and providing them with financial security.
3. The life insurance provider’s background
Find a reliable life insurance company that can get you approved and covered. For example, PolicyMe is backed by Securian Canada, an insurer that covers over 3 million Canadians and has been in operation for more than 65 years, so you can rest assured that you’re getting trustworthy protection and providing you with customer satisfaction.
What determines the rates for Canadian life insurance for seniors?
Life insurance rates for seniors are determined by your age, coverage amount, smoking status and health status. These are the key characteristics that factor into the cost of your monthly premium. Hint: they’re the same factors that determine life insurance rates when you’re younger, too.
1. Age
You become higher risk the older you get. So you might have to shell out more for a life insurance policy if you buy it when you’re 60 instead of when you’re 40.
2. Gender
Women have a longer life expectancy than men, according to Harvard Medical School. That means men will find themselves paying higher rates for the same policy.
3. Coverage amount
Having a higher coverage amount means that your insurer will have to give your beneficiary more money also known as a death benefit if you pass.
4. Smoking status
Being a smoker automatically makes you riskier to insure in the eyes of your insurance company. Be prepared to pay higher premiums if you’re looking for smoker life insurance.
5. Health
If you have pre-existing medical conditions or illnesses, such as diabetes, high blood pressure, cancer, or heart disease, you’re riskier to insure. As a result, your insurance company will charge you more for coverage and may even deny your application.
What is the maximum age for life insurance coverage in Canada?
The maximum age for someone to buy life insurance in Canada will mostly depend on the life insurance provider and the type of policy you're looking at.
Generally, most insurers set the maximum issue age somewhere between 70 and 85 years old (quite a big range!). It will take a bit of research to find a company and a policy that's the right fit for you. Take note that some companies will use the term "maximum issue age" to define the oldest age they'll provide coverage for.
Another option is to sync up with a life insurance advisor; they can help you assess your insurance needs and make recommendations from there.
Bottom line: Canadian seniors have options for life insurance
If you’re a senior looking for life insurance, there’s no need to worry. There’s usually a way to get insured and protect your family and loved ones at a reasonable cost. Seniors can best use life insurance coverage for:
- Outstanding debts or financial obligations that your family members will need to pay off when you pass away
- Covering your end-of-life expenses, including medical and funeral costs
- Living expenses for loved ones who are dependent on your income
- Managing financial assets that you’d like to leave behind as an inheritance.
FAQ: best life insurance for seniors
Our mission is to empower Canadians to make informed financial decisions. To achieve this, we have an expert editorial team that includes licensed insurance advisors and financial planners. We prioritize the best interests of Canadian families and won't endorse any product, company or financial strategy that we believe isn't suitable. Our educational guides are crafted by in-house experts, like licensed life insurance advisors. Before publication, we subject our research and advice to scrutiny and comprehensive revisions for accuracy and completeness.
Our mission is to empower Canadians to make informed financial decisions. To achieve this, we have an expert editorial team that includes licensed insurance advisors and financial planners. We prioritize the best interests of Canadian families and won't endorse any product, company or financial strategy that we believe isn't suitable. Our educational guides are crafted by in-house experts, like licensed life insurance advisors. Before publication, we subject our research and advice to scrutiny and comprehensive revisions for accuracy and completeness.