Key takeaways
The average cost of life insurance per month in Canada ranges between $15 to $100. Life insurance is probably more affordable than you think, but rates do depend on several factors, which we'll explore below.
Here’s a breakdown of what you could expect to pay for life insurance, depending on your situation. We’re pulling industry data from Winquote, to compare rates from 33 different life insurance companies.
*Starting prices based on a policy for $500,000 coverage for a 40 year-old. **Average prices based on a 20 year term policy for $250,000 coverage. ***Starting prices based on a 20 year term policy for $250,000 coverage for a 65 year-old.
This chart compares some of the most competitive rates for term life insurance in Canada:
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The cost of life insurance depends on factors that are out of your control, like your age and gender.
It also may depend on factors that are in your control, like your health, lifestyle and coverage amount. Sorry, no one-size-fits all answer here! Though our video may give you some quick tips:
Life insurance companies calculate your premiums based on how likely you are to pass away while the policy is active.
Canadian insurers will initially give you a life insurance quote based on your age, gender and smoking status.
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But, your rate may change based on additional information in your application, like your family's medical history.
Here’s how insurers will determine your price:
These factors can be broken into two categories: personal factors and policy factors. Let's look at the personal factors first.
Personal factors play a large role in affecting the cost of life insurance. The life insurance quote starts at the age, gender and smoking status of the person.
A 25-year old man getting a 20-year, $500,000 policy would pay an average $384 a year. If they waited until they were 55 years old to purchase life insurance, their premiums would cost $2,749 a year.
Life insurance costs typically increase every year you age, rising substantially once you reach your late 40s.
Buying life insurance while you’re young can help guarantee a lower rate. Once you purchase a term life insurance policy, you’re locked into that rate for the entire length of the term.
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A 40 year-old woman applying for a 20 year term policy for $500,000 would pay $33.52 on average, while a 40 year-old man applying for the same policy could expect to pay $45.22.
Your gender plays a role in determining how much you pay for your life insurance policy, because men have a shorter life expectancy than women, according to a Harvard Medical School study.
Your age and gender are often the first things an insurer will look at when pricing your policy, though other factors — like your health — may have a bigger effect.
But keep in mind that other factors, like your medical history, will influence how high your premiums are.
Smokers pay twice or three times as much for life insurance products. Why? Smoking is tied to long-term medical issues including cancer, making smokers more expensive to insure.
The average cost for life insurance as a smoker for a 35-year-old non-smoking man starts at $31.32 per month for a 20-term, $500,000 life insurance policy. If that same man was a smoker, his premiums would start at $80.10 per month for the same policy, a 255% increase.
You will need to be nicotine-free for at least one year to qualify as a non-smoker.
And while it may be tempting, don’t lie about your health status (or lifestyle) on your insurance application. Not only is it considered insurance fraud, you may lose your coverage, leaving your family without financial security.
As you might guess, the healthier you are, the lower your life insurance rates will be.
To demonstrate this, we’re pulling from industry data on people with diabetes. A 35 year-old female with diabetes applying for term life can expect to pay upwards of $19.40 per month for 20-year term coverage of $500,000. A 35 year-old male can expect to premiums to start at $26.64.
Some insurers require applicants to undergo a medical exam and provide their medical history, though you may not have to.
Health conditions that may impact your life insurance premiums are:
While there are some health issues that can be improved through lifestyle changes, others you can’t control that will unfortunately affect your rates.
If you have been denied coverage or have a pre-existing condition, you can apply for no medical life insurance, which approves you instantly without a medical exam. But these policies are much more expensive, costing sometimes three times as much as a term life insurance policy.
Getting coverage as soon as possible if you have a pre-existing condition will help you lock in the lowest rate because prices only increase the older you get.
You may pay more for life insurance if you like to live life on the edge. High risk hobbies, like skydiving, scuba diving, or motorcycle racing increase the risk factor of covering you.
And insurers might review your criminal history and motor vehicle report to assess how risky you are to insure.
Driving violations or criminal convictions can affect your rate or lead to denial. Each insurer has its own rules but generally, the more violations, the higher your rates.
Your premiums are calculated using standard industry ratings, ranging from A to J or 1 to 10, with 1 being the lowest (and most ideal). These ratings are used to calculate how much someone will pay on top of the base rate.
Risky jobs can have serious real-world consequences. 924 workers passed away in work-related incidents in 2020 and 1,071 workers passed away at work in 2021, as reported by Association of Workers’ Compensation Boards of Canada.
Dangerous jobs, as classified by life insurance companies, will include jobs like:
Different life insurers may have different definitions of what constitutes a dangerous job, so shop around to get the best rate.
Now that you know some of the personal factors that can affect your rates, let’s break down some of the policy factors.
There are two main types of life insurance policies you can buy in Canada: term life insurance and whole life insurance.
Term life insurance:
A 35 year-old woman can expect to pay $23 per month. A man can expect to pay $31 per month for a 20 year-term policy for $500,000 in coverage
Lasts a set amount of time (like 10 or 20 years)
Pays out a “death benefit” if the policyholder dies during that term
More affordable than permanent life insurance
Protection during a period of temporary need, like while you’re paying off your mortgage
Whole life insurance:
A 35 year-old woman and man can expect to pay $243 and $296 per month respectively for whole term insurance.
Permanent coverage, as long as you keep paying your premiums
Policies can cost five to 10 times more than term
Can include some benefits term policies don’t have, like a cash value investment component
Let’s look at an example of the cost difference between these two types of life insurance:
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The more coverage you have, the higher your rates will be. Your policy’s coverage is the amount that’s paid to your beneficiaries, also known as the death benefit.
Coverage amounts may not raise your rates as much as you think. And for some, higher death benefit may be worth the added costs. For example for someone aged 35:
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The shorter the policy length, the more affordable the life insurance.
For example, for a 35-year-old man with $500,000 in coverage, rates would start at $22.50 for a 10-year term life insurance policy, and $31.32 for a 20-year policy.
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Most term options (like at PolicyMe) are level policies, meaning the premiums stay the same the entire term. This makes budgeting and planning easier.
Make sure you read your policy closely before signing! Other types of term life insurance have premiums that go up in increments, including one-year renewable policy or a five-year renewable policy.
A 35-year-old man and woman can expect rates to start at $22.50 per month for a joint policy. If you're looking for life insurance with your partner, you have two options: individual or joint life insurance.
Joint life insurance is a single policy that covers two people under one premium. These policies are often cheaper than buying two separate permanent policies.
Individual couples life insurance allows you and your partner to pick different policy lengths and coverage amounts. While this strategy tends to be more expensive than purchasing a single joint life insurance policy, it provides flexibility.
PolicyMe offers the best of both worlds: Couples can buy their own separate policies and get a discount in their first year when they apply together.
A 65 year-old man and woman can expect to premiums to start at $81.17 and $59.94 respectively for a 10 year term policy with $100,000 coverage.
Senior life insurance is often used for funeral expenses, paying off any outstanding debts, and helping your beneficiaries once you have passed.
Senior life insurance is often used for funeral expenses, paying off any outstanding debts, and helping your beneficiaries once you have passed. And it’s still very much possible to get good coverage once you’re older.
PolicyMe offers senior term life insurance, available only after you turn 65. We offer 10 or 15 year policies for those aged 70, and 10-year policies for those aged 75. Whether you need to start new coverage or renew your previous term life insurance, it is never too late to get the coverage you need.
A child rider benefit can be tacked on to an average 20-term term policy for costs starting at $9.
However, a whole life policy for a 5 year-old child can start at $67.14 per month. Which is a high monthly price.
Some families may purchase life insurance for their children to lock in lower rates, using the policy as an investment vehicle for their child’s future.
Child life insurance is generally a whole life insurance policy, lasting their entire life. Coverage amounts tend to be lower, which means the average premiums tend to be lower.
Most Canadian families don’t need child coverage past age 18. Kids rarely have their own dependents, so it doesn’t make financial sense for them to have a “traditional” life insurance policy.
Most parents might be better off using their money to benefit their child elsewhere. While most people don’t need it, PolicyMe offers free child coverage – at no extra cost – to every policy.
This means that if a policyholder's child passes away, the parent(s) will gets $10,000 to help with any associated financial burdens (e.g. time off, funeral expenses, etc.).
Whether you’re shopping for life insurance or already have a policy, there are eight key ways to crunch the numbers and save on your coverage.
1. Buy early: The younger you are, the lower your premiums will typically be. It’s best to lock in a lower price as soon as possible, as rates increase each year.
2. Shop around: “Get quotes from multiple insurers to compare prices and find the best deal,” Hobbs recommends.
Each insurance company has their own underwriting model for how they price applicants, and prices may also differ depending on the amount of overhead costs the insurer has.
If you have a policy already, review your existing contract if you have a policy already to see if you're paying for additional features and coverage riders.
3. Consider a term policy: This is one of the easiest ways to save money — permanent policies are much more expensive and you’re better off investing that extra money someplace else.
4. Bundle your policy: Some insurers allow you to bundle your life insurance policy with other types of insurance, such as home or auto insurance, for a discount.
5. Look for discounts: Some life insurance companies offer discounts if you apply together with your partner. PolicyMe offers 10% off your first year of premiums if you apply together. Others may offer a discount if you pay your premium annually instead of monthly.
6. Maintain a healthy lifestyle: Maintaining a healthy weight, stopping smoking, avoiding high-risk hobbies and managing your medical conditions can lower your rate.
If you already have a policy and recently made a positive lifestyle choice, contact your insurer to see if you could get a lower rate.
7. Don’t skip the medical exam: Blood tests are never fun, but if you’re in good health, it’s smart to stay away from pricey no medical policies.
8. Adjust your coverage: You don't need to buy more coverage than you need — you can always adjust the death benefit or term length of your policy.
Term life insurance costs an average $34 per month in Canada for a 30 year-old. This type of life insurance is generally simpler and more affordable than permanent life insurance.
A $250,000 20-year term life insurance policy would cost a 35-year-old man $19 a month, and a 35-year old woman $15 per month.
Permanent life insurance in Canada costs anywhere from a minimum of $243 to $600 per month, though that amount varies greatly depending on your age, gender, health, and other factors.
A 35-year-old healthy man can expect to pay around $314 per month for a permanent life insurance policy in Canada. A 35-year-old woman would expect to pay around $261 for a permanent life policy.
Average life insurance costs in Canada increase each year you get older. Buying life insurance while you’re young can help guarantee a lower rate.
The average $500,000, 20-year term life insurance rate for a 30-year old man is $29.70 per month. If you waited until you were 55 years old to purchase life insurance, your premiums would cost $214.20 per month. And as a rule of thumb: your life insurance needs are much greater when you’re younger and have financial obligations like paying off the mortgage or raising kids.
Inflation doesn’t have an impact on the cost of life insurance if you already have a policy, because you’re already locked into the premium price you’re paying. You may experience a higher rates if you’re shopping for a new policy or renewing your policy.
Inflation drives up prices, making things more expensive over time. It also impacts interest rates, which means higher returns on investments like bonds, savings accounts, and some insurance policies, like permanent policies. This means your cash value may go up, but the purchasing power of your death benefit may be lower.
Our sources:
Hobbs, S., Director of Policy at Canadian Life and Health Insurance Association. Interview conducted by Hanna Horvath. January 2023.
Industry classifications. (n.d.). https://www.statcan.gc.ca/en/concepts/industry. Accessed February 2023.
Keefe, A., MSc, Tucker, S., PhD. (2022, April 28). 2022 Report on Work Fatality and Injury Rates in Canada. University of Regina. https://www.uregina.ca/business/faculty-staff/faculty/file_download/2022-Report-on-Workplace-Fatalities-and-Injuries-April-28-FINAL.pdf. Accessed February 2023.
Shmerling, R. H., MD. (2020, June 22). Why men often die earlier than women. Harvard Health. https://www.health.harvard.edu/blog/why-men-often-die-earlier-than-women-201602199137. Accessed February 2023.
Why do women live longer than men? (2018, August 14). Our World in Data. https://ourworldindata.org/why-do-women-live-longer-than-men. Accessed February 2023.
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