From groceries to housing expenses, your family’s monthly budget is already stretched pretty thin. Although you know how important life insurance is, you think there’s no way you can afford it. This is the main reason why you, like 50% of Canadian parents, haven’t bought it yet.

Life insurance is more affordable than you think. The cost depends on your unique profile, including your health, age, family history and lifestyle choices. If you are of average health for your age and your risk factor is low, your premiums will be, too.

Here’s more about how much life insurance costs in Canada and the key factors that affect the price of a policy.

How much does life insurance cost in Canada?

Unlike other types of insurance, where you live does not impact how much you pay for life insurance. Instead, life insurance companies determine a price after considering factors such as your age, health and policy options.

How much should your life insurance policy cost monthly?

Your life insurance rate can vary depending on the insurer, the policy type and your distinctive profile. 

As PolicyMe senior life insurance advisor Tobin Tuff told MoneyWise:

“Whenever you’re buying life insurance, you want to ask yourself, ‘How much money would my loved ones need to maintain their current lifestyle if I were no longer there?’ The amount you need is usually a lot higher than the amount provided by your employer.” 

There are two main types of life insurance policies available: whole and term. 

Whole life insurance policies provide coverage for your entire life and sometimes collect cash value through investments, but premiums are much pricier. Whole life insurance policies cost 5 to 10 times more than term.

More affordably priced term life insurance policies don’t offer an investment component and only cover you for a certain period of time. Life insurance is best used to replace your income if you pass away. It's not necessarily well designed to help you invest your money.

Chart detailing whole life versus investing for article titles How Much Does Life Insurance Cost in Canada

There are many more profitable ways to invest your money other than through a whole life insurance policy. Investment options like RRSPs and TFSAs will make more money for your loved ones after you’re gone.

Use our simple online life insurance calculator to find out what your life insurance policy would cost monthly. Instead of waiting weeks, applicants receive an instant decision.

If you apply for coverage, the final price for your policy will depend on additional information that your insurer will collect from you, such as your medical history and lifestyle. 

Below, we’ll take a look at average life insurance costs by age, gender identity, coverage amount, policy length and insurance company.

What is the average cost of life insurance in Canada?

Life insurance premiums can vary greatly depending on several factors. 

In general, the younger and healthier you are, the lower your premiums will be. But remember, what you pay for life insurance depends on your personal situation and needs.

Some of the major factors that go into life insurance premiums include your age, gender, coverage amount and policy length.

Average life insurance cost by age

Life insurance companies provide rates based on life expectancy and risk. As you age, the likelihood of your insurer having to pay out your policy increases, so your rates will also increase. That’s why it’s always more beneficial to purchase life insurance when you’re young.

Couple walking with arms around one another for article titled How Much Does Life Insurance Cost in Canada

The chart below highlights how your age influences your life insurance premiums.

Age $500,000 Manulife Term Life Insurance 20 year policy for a male
20 years old $32.75
25 years old $33.36
30 years old $33.84
35 years old $35.46
40 years old $50.08
45 years old $79.83
50 years old $134.21
55 years old $244.96

Average life insurance cost by gender identity

Your gender identity plays a small but important role, too. According to a study by Harvard Medical School, women statistically live longer than men. Because of this, women pay less for their life insurance premiums.

Usually, typical policies are based on your self-identified gender instead of your gender at birth. There’s currently no established protocol on gender for transgender applicants. 

The following table illustrates how monthly insurance premiums vary by gender.

Age/Gender $500,000 Manulife Term Life Insurance 20 year policy for a male
40 year old, female $38.00
40 year old, male $50.00

Average life insurance cost by coverage amount

The amount that would be paid to your beneficiaries is known as your policy’s face value or death benefit. The more coverage you have, the more you’ll pay in premiums.

The most common coverage amount is $500,000, but not everyone needs the “Cadillac” of insurance. 

You should have the right amount to provide for your loved ones if you pass away. However, even if funds are tight, providing your family with a small policy is better than nothing at all.

Here's how life insurance costs vary as the coverage amount increases:

Coverage Amount Manulife Term Life Insurance 20 year policy for a 35 year old male
$100,000 $13
$200,000 $13
$300,000 $25
$400,000 $32
$500,000 $35
$600,000 $42
$700,000 $48

Average life insurance cost by policy length

Term life insurance policies are typically available for a 10-, 20- or 30-year period. The shorter the policy length, the more affordable the life insurance.

When you renew at the end of your term, the cost of your annual premiums may increase

The following chart details how policy length can affect life insurance costs.

Policy Length $500,000 Manulife Term Life Insurance policy for 35 year old male
10 years $27
20 years $35
To age 65 $66

Premium cost by life insurance company 

Every life insurance company will calculate a different amount for your policy’s premiums. Monthly rates can vary and depend on a life insurance company’s expenses and historical claims experience.

The chart below compares the prices for term life insurance from five leading life insurers.

Chart detailing term life insurance price comparison for article titled How Much Does Life Insurance Cost in Canada

Other factors that impact the cost of life insurance

Besides your age, gender identity and policy details, your lifestyle and health history can also determine the cost of your insurance.

If you’re a smoker, your premiums will increase significantly, costing you double or triple a non-smoker’s rate. The same goes for if you have a dangerous occupation (such as a driver, roofer or miner) or take part in higher-risk hobbies, like skydiving or scuba diving.

This would leave your beneficiaries without the ability to make a claim and receive your death benefit.

Real-life examples: cost of life insurance

Like many other millennials, Mike and Samantha balance their student loan debt with other financial commitments, including their mortgage. 

Pregnant couple on couch for article titled How Much Does Life Insurance Cost in Canada

As they start to think about having a family, they realize the importance of taking out a life insurance policy. They want to ensure that their children will be taken care of financially if something happens to them.

Because he’s both a man and a smoker, Mike’s premiums are quoted as being over double the rate compared to Samantha’s. Even so, the couple was surprised at how affordable life insurance actually is. For a 20-year term, their monthly premiums will be less than their cell phone bill!

  • Mike’s approximate premium: $33.30*
  • Samantha’s approximate premium: $14.78*

*These premiums are based on PolicyMe rates.

They also realize that they likely won’t need the same $500,000 coverage amount upon renewal since they’ll owe less on their mortgage. This should help lower the renewal amount for their new policy term and keep it affordable for their family.

In summary: how to get a rate for life insurance

Now that you understand the key factors that affect life insurance costs, it’s time to figure out what your own premiums will cost.

With PolicyMe’s online application, you can receive a decision in just a few minutes. By removing unnecessary steps and expenses throughout the underwriting process, PolicyMe can provide affordable rates without compromising on coverage. Keep in mind that the quotes you receive are estimates only. 

FAQ: the cost of life insurance in Canada

What is the average life insurance cost per month?

Although many Canadians believe life insurance isn’t affordable, it costs an average of only $22 per month. For $500,000 of coverage over 20 years, your premiums are usually cheaper than your typical cell phone bill. For younger people, rates are especially affordable.

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

For only $13 per month, an average 35-year-old man can have a 20-year term life insurance policy with $100,000 of coverage.

Do I need to get a medical exam to get life insurance?

Some life insurance companies, like PolicyMe, offer instant approval. 

We don’t require a medical exam for most applicants. If we do request a medical exam, you will find out instantly. And the time you wait for insurance is only weeks, not months.

How much is life insurance for a single person?

An average 30-year-old man and woman will pay $18 per month and $15 per month respectively for a $250,000 20-year term life insurance policy.

Laura McKay

COO & Co-Founder

Laura brings 7 years of experience working in insurance & strategic operations as a management consultant at Oliver Wyman, after experiences at Manulife and Munich Re. In 2017, she launched a successful initiative for the World Economic Forum focused on innovation in insurance, working closely with insurers, tech pioneers, and policy-makers.

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