Key Takeaways

Term life insurance is the best choice for most Canadians, especially those with minor children or large debts, like a mortgage.
Different providers offer varying coverage amounts, term lengths, medical exam requirements, and strength of financial backing, so it’s important to shop around.

Finding the best term life insurance in Canada

Choosing the right term life insurance policy can feel overwhelming, especially with so many options available in Canada. Do you choose your current bank? Or do you go with a dedicated insurance provider? Questions, questions, questions.

The truth is, it’s hard to define what’s “best” because life insurance depends on your needs and goals. A big part of choosing may come down to how you feel about a provider. Do you want the feeling of security of a recognized bank? Or do you prefer a more seamless, clear process from a newer provider?

In this guide, we’ll take a look through some of the more popular providers, break down what they offer for easy comparison, and show you what to look for.

"Term life insurance is a simple and affordable way to protect your family’s financial future," says Christelle Arouko, a licensed insurance advisor. "The key is finding a policy that balances affordability with the right coverage amount."

[fs-toc-omit]What is the advantage of getting term life insurance?

The big advantage of term life insurance is that it’s simple and budget-friendly. You get coverage for a set period—say 10, 20, or 30 years—at a lower cost compared to other types of life insurance.

It’s perfect for when you need solid protection, like while raising a family or paying off a mortgage. Since there’s no investment side to it, every dollar you pay goes straight to keeping your loved ones financially secure if something happens to you.

[fs-toc-omit]Is term life the best option for Canadians?

Term life insurance is a great option for many Canadians, offering affordable and straightforward coverage for a specific period, such as 10, 20, or 30 years.

This makes it ideal for covering needs like paying off a mortgage, supporting children until they are independent, or providing financial security during your working years. For the majority of Canadians, term life insurance is an effective way to get the necessary coverage without straining their budget.

However, the best option can vary depending on your personal needs and long-term goals. While term life insurance suits those seeking temporary protection, it doesn’t build cash value and can become costly if renewed later in life.

If you have more complex needs, such as long-term financial planning or providing for dependents with lifelong needs, a permanent life insurance policy might be more appropriate.

We always recommend to assess your specific situation or consult with a financial advisor to determine the best type of life insurance for you.

Best term life insurance companies in Canada

The best term life insurance providers in Canada are PolicyMe, RBC and Sun Life.

‍To create this list, we looked at each company’s rates, approval times, application process, customer reviews and quality of customer service vis-a-vis their term life insurance options.

Each company has advantages and weaknesses, so consider them carefully against your life insurance needs.

Provider	Coverage amounts	Term lengths
PolicyMe	Up to $5M	10, 15, 20, 25, 30 years
Canada Life	Up to $10M	5 to 50 years
Sun Life	Up to $10M	10, 15, 20, 30 years
Wawanesa	Varies	10, 15, 20, 25, 30 years
RBC	Up to $25M	10, 20, 30 years

PolicyMe: simple & affordable term life insurance

Now that you’ve seen how some of the top providers stack up, let’s take a closer look at what a strong term life insurance option can offer through the lens of PolicyMe. Let’s zoom in on what sets PolicyMe apart and how our approach could be a fit for your needs.

[fs-toc-h2]PolicyMe term life Insurance

PolicyMe Insurance

Company Bio: PolicyMe is an online insurance solution based in Toronto, Ontario. They’ve used technology to streamline the insurance application process and help Canadian families get personalized advice. By doing so, they've cut out inefficiencies in the process and cut down costs. PolicyMe now has almost $10B in coverage in force in Canada.

Pros:

Couples discount: Couples who apply together get a 10% discount in their first year.
Free child coverage: Every policy includes free child coverage ($10,000 per child).
Flexible coverage: Get from $100,000 to $5M in coverage.
Fast application: Applying online takes 20 minutes or less; get an instant decision.
Secure policies: Policies are backed by Canadian Premier and a global reinsurance company.
Better rates: Fully-underwritten term life insurance for more competitive pricing.
Expert support: Licensed Canadian advisors are available Monday-Friday via phone or email.
Policy flexibility: Extend or upgrade your policy within the first five years.
Additional coverage: Option to add critical illness insurance at the same time.

Cons:

Online-only service: No brick-and-mortar locations.
Limited rider options: No additional riders available, except for free child coverage.

Customer review

“The process was quick, support was top notch and the price was competitive.” – Verified customer on Reviews.io.

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‍How to choose the best term life insurance policy

Your family is as unique as your financial goals. So don’t compromise on life insurance by going with a limited option that doesn’t feel quite right.

Take your time, shop around, speak to advisors, get quotes. You’ll get a good feeling from one company over the others. Once you have the knowledge, trust your intuition. You wouldn’t be here reading this if you didn’t have good sense.

1. Coverage amount

Did you know the average life insurance coverage amount in Canada in 2023 was $483,000? But how do people like yourself choose the amount of coverage they need? The good news is it’s not a mysterious random number. Coverage should be based on what your family will need to maintain their lifestyle and achieve all the financial goals you’ve planned if you were to pass.

Calculating this is easier than you might think:

Use your annual income as a baseline. If your family depends on your income, then they will still need this amount every year to maintain their lifestyle and the goals you’ve planned for
Think about how many years away your financial goals are from being achieved. How many years are left on your mortgage? How long until the kids leave home? Your coverage should make sure that your family can still achieve these goals.
Now combine your annual income with how many years away your financial goals are from being achieved. This is the life insurance amount you need during the years your family is financially dependent on you and while you have a lot of financial obligations (like a mortgage).
Finally, consider any other debts that may impact your family if you were to pass before the debts are paid off.

2. Term length

You may be thinking: don’t I always need life insurance?

It’s a good question. But consider this: your financial stability usually increases as you get older.

This is because you pay off your financial obligations over time, such as your debts and mortgage. After you’ve done that, you can focus more and more on building your wealth through savings instead of paying monthly premiums for permanent life insurance.

Think about how short term or long term your financial goals are:

Short-term (10-15 years) may be best if you:
- Are part way through paying your mortgage
- Have kids that are aged between 10 - 15, so you’ll be covered until they’re financially independent
- Have smaller amounts of debt that you plan to have paid in a shorter timeframe
Medium-term (20-30 years) may be best if you:
- Have just started a family (have kids aged 5 or below)
- Recently purchased a mortgage. Mortgages are usually 30-year terms, which is why buying a home is usually when people start looking for life insurance
Long-term (30+ years). Purchasing a term policy longer than 30 years might not be the right fit.
- You’ll likely have fewer financial obligations as you age, so you’re paying premiums when your family might not need the coverage
- It may be a better option to renew your current policy than opt for a longer one
- Check that your provider offers term renewals

3. Premium costs

Every term life insurance policy comes with monthly premium payments.

So think about what you’re able and willing to budget every month to pay those premiums. If you stop paying premiums, your policy may be cancelled. So make sure it’s an amount you can comfortably afford.

You can compare the average costs of monthly premiums in our guide here, but think about these things:

Know that term life insurance is 5-15x cheaper than whole life insurance, making it suitable for most Canadian families.
Plan around your existing budget. If you’re already paying for diapers and daycare, you don’t want premiums that are so high they’ll swamp your budget.

The younger you are, the more affordable your premiums will be. Like most financial steps forward, the younger you start, the better off you’ll be.

"Most people only need term life insurance, not permanent coverage," explains Arouko. "It’s cost-effective and provides essential financial protection during key earning years."

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Next steps: Best term life insurance in Canada

Decide how much coverage you need to replace your income and for how long. Use our life insurance calculator if you're not sure. Our calculator will even tell you if you don't need term life insurance at all!
Decide if you value optional riders or conversion to a permanent policy.
Shop around for the best rate. Then check whether these policies have the term lengths, coverage amounts and optional features you want.
Apply and get a decision. If you're denied, you may want to look at no medical options.
Read your policy closely before signing.
Sign your policy and add your payment information.