How Much Is Life Insurance in Canada? (Average Rates)
How do life insurance companies calculate premiums?
The cost of life insurance in Canada partly depends on factors that are out of your control, like your age and gender. And it also may depend on factors that are in your control, like your health, lifestyle and coverage amount. Here's exactly what insurers consider when calculating your life insurance premiums:
How much life insurance costs in Canada: by age, gender, health
The cost of life insurance in Canada can range anywhere from $15-$300+. The range is so wide here because the cost will highly depend on your personal factors and the type of policy you choose.
The average cost of life insurance in Canada can range widely depending on your health, policy type and your premium amount. — Erik Heidebrecht, Life Insurance Advisor.
We’ve broken down sample rates by age and gender to give you a realistic idea of what you’ll pay. Understanding how age, gender and health impact your premiums can help you spot a fair rate — or an overpriced one. These are rates for a non-smoker, $500K in coverage for a 20-term policy:
Life insurance premiums by gender
Here are some sample rates to give you an idea of life insurance cost by gender. We've pulled monthly rates for term life insurance for a non-smoker, $500K in coverage for a 20-term policy:
- $33.27 for a 40-year-old woman
- $44.96 for a 40-year-old man
Your gender plays a role in determining how much life insurance costs, because men have a shorter life expectancy than women, says Harvard Medical School.
Life insurance premiums for smokers
Smokers pay much more for life insurance coverage because smoking is tied to serious medical issues like cancer, making smokers more expensive to insure. Below are premiums for a $500K in coverage for a 20 year term policy, cigarettes used within 12 months.
Take note: you'll need to be nicotine-free for at least one year to qualify as a non-smoker. And it may be tempting but don't lie about your health status (or lifestyle) on your application. Not only is it considered fraud, but you may also lose your coverage, leaving your family without a financial safety net.
Most insurers classify marijuana users differently than tobacco users. Generally, marijuana users can buy policies that match their needs without paying smoker rates.
How health affects the cost of life insurance
The healthier you are, the lower your life insurance prices will be. That said, how much your price goes up really depends on your individual health condition.
For example, someone with type two diabetes would likely be declined for coverage if they're under 40 years old. Over 40 years old, you'd pay around 150% of the base price, depending on how well your diabetes is being managed. Here are starting premiums for a non-smoker, $500K in coverage for a 20 year term policy:
Some insurers require applicants to undergo a medical exam and provide your medical history and your family medical history, though you may not have to. Health conditions that may impact your life insurance costs are:
- High blood pressure
- High cholesterol
- Obesity
- Heart disease
- Cancer
- HIV
If you have been denied coverage or have a pre-existing condition, you can apply for no medical life insurance products, some of which approve you instantly without a medical exam. But these policies are much more expensive, sometimes three times as much as a term policy.
Buy life insurance as soon as possible if you have a pre-existing condition or a family history of medical issues as this will help you lock in the lowest rate. Prices only increase the older you get!
How high-risk activities affect the cost of life insurance
You may pay more for life insurance if you like to live life on the edge. Risky choices like high-risk hobbies (skydiving or scuba diving) increase the risk factor of covering you.
On top of this, insurers may review criminal history and motor vehicle reports to see how risky you are to insure. Driving violations or criminal convictions can affect your monthly price or get your application denied, but each insurer has its own rules.
Here's where the math gets complicated. Your life insurance premiums are calculated with standard industry ratings, from A to J or 1 to 10, with 1 being the most ideal and 10 being the riskiest. Let's say you engage in a few high-risk hobbies and your life insurance company places you in the "C" rating class. You'd pay about 75% more for life insurance.
Average cost of life insurance by coverage amount
The more life insurance coverage you get (i.e. the higher the death benefit is that your beneficiaries would get), the higher your premiums will be. These premiums are for a 20 year term policy for a 35 year old male, non-smoker:
Average cost for life insurance by policy type
The monthly cost of life insurance differs based on the type of coverage you choose, for example here are term life insurance rates versus whole life insurance rates:
Average cost of life insurance by policy length
Here are some monthly rates for the cost of a term life insurance policy for a non-smoker, $500K in coverage for a 35 year old non-smoking man, by policy length:
- 10-year term: $22.48
- 20-year term: $31.29
- 30-year term: $54.72
The shorter the policy length, the more affordable the life insurance policy. And most term options (like PolicyMe) are "level", meaning the premiums stay the same the entire term. Read your policy before signing! Other types of term policies have premiums that go up incrementally, like a one-year renewable or a five-year renewable policy.
Average cost of life insurance for couples
Joint life insurance is a single policy that covers two people under one premium. These policies are often cheaper than buying two separate permanent insurance policies.
Another option for couples is individual policies which let couples to pick their own lengths and coverage amounts. While this can sometimes be pricier than buying one joint life insurance policy, it's much more flexible. PolicyMe offers the best of both worlds: couples can buy their own policies and get a discount in their first year when they apply together.
Average cost of life insurance for seniors
Senior life insurance is often used for funeral expenses, estate planning and supporting your beneficiaries once you have passed. And it's still very much possible to get good coverage once you're older. However, the fact of the matter is that life insurance rates go up as you age. However, because you may have less debt or financial obligations, you can purchase a policy with lower amounts of coverage to offset costs.
As an example, here are PolicyMe term life insurance rates for $100,000 in coverage over a 10-year term:
- Rate for a 65-year-old woman: $60.69
- Rate for a 65-year-old man: $81.02
How much life insurance can I get for $50?
Many people go into the process of shopping for life insurance with a budget in mind. To get you started, we’ve pulled your options for 20-year term policies for a premium rate of around $50 per month or less from PolicyMe. The majority of our term life insurance policies are for a 20-year term (40%).
8 ways to save money on your life insurance premiums
1. Buy early: It's best to purchase life insurance when you're younger and lock in a lower price, as rates increase each year.
2. Shop around: Get quotes from various life insurance companies to compare and find the best deal.
3. Consider a term life insurance policy: One of the easiest ways to save money — permanent insurance policies last your entire life but are much more costly.
4. Bundle your policy: Some insurers allow you to bundle your life insurance policy with other types of insurance, like home or car insurance, for a discount.
5. Look for discounts: Some companies offer discounts if you apply as a couple. PolicyMe offers 10% off the monthly cost of life insurance in the first year if you apply together.
6. Maintain a healthy lifestyle: Stay in good health by managing your weight, quitting smoking and avoiding high-risk hobbies.
7. Don't skip the medical exam: If you don't have pre-existing medical conditions, stay away from pricey no medical policies. You may not even have to do a medical exam with traditional policies.
8. Adjust your coverage: You don't need to purchase more life insurance coverage than you need — you can always adjust the death benefit or length of your policy.
Video summary: How does life insurance cost in Canada?
FAQ: Life insurance cost Canada
Next steps: ready to start looking for life insurance?
The prices listed in this article have been researched and fact-checked with both internal and external sources. Prices are based on publicly available rates.
*Starting prices based on $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.
Additional sources:
1. WinQuote Canadian Products. WinQuote by Equisoft. https://www.winquote.net/
2. Hobbs, S., Director of Policy at Canadian Life and health insurance Association. Interview conducted by Hanna Horvath.
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.