Best Life Insurance for Millennials in Canada

If you're a millennial, you're probably at the point in your life where you're digging yourself out of student loan debt, splurging on a down payment for a home, or dropping some serious cash on gear for the baby you're expecting.

Even though your bills are piling up, it's also the time in your life when you might need to think about buying life insurance. 

However, adding another monthly payment may be the last thing you want to do. And you might be hoping that because you're so young, you can afford to delay buying life insurance for a while. 

But the truth is that buying life insurance for millennials isn't just the "adult" thing to do - it's the responsible thing to do.

But why? And what should you look for if you're a millennial searching for life insurance? Here's how to find the best life insurance in Canada for millennials.

Why is Life Insurance for Millennials Important?

Why do you need life insurance now?

Firs things first - life insurance is designed to protect the people who depend on you financially. If you don't have dependents or debt that would fall on somebody else's shoulders if something were to happen to you, you don't need life insurance right now.

But if you do have people who depend on you financially or would need financial help to cover your debts after you die, life insurance is the best way to protect them. 

When you buy a life insurance policy, you pay your insurance company monthly premiums. If you die while holding your policy, your insurer will give your beneficiary a death benefit - a tax-free lump sum payment that your beneficiary can use in any way they'd like. 

Your death benefit will equal the coverage amount you select when you buy your policy. You can ensure that your death benefit will give your beneficiary enough money to pay for the expenses that you're no longer around to cover. This might include funds for mortgage payments, school tuition, and basic living expenses. 

Keep in mind that although you might have some life insurance coverage through your employer, it usually isn't enough to protect your loved ones fully. So instead of hoping that you won't end up needing coverage or that you'll be able to rely on your workplace coverage, buy a separate policy that gives you the coverage you need. You'll sleep better at night knowing that your family is protected.

If science has it right, this could end up adding years to your life!

Types of Life Insurance for Millennials

There are two main types of life insurance that you can buy: term life insurance and permanent life insurance.

Term life insurance gives you coverage for a fixed number of years (usually, 10, 20, or 30). If you die during your policy term, your beneficiary will receive your death benefit. But if you die after your policy expires, your beneficiary won't get anything.

In comparison, permanent life insurance covers you for the rest of your life. This means that your beneficiary will get your death benefit no matter when you end up dying.

You might think that if you're going to pay for life insurance, you should pay to protect your family for the rest of your life by choosing permanent life insurance, right? In reality, most people need coverage only during the years when they have dependents or debt that could affect their family financially (e.g., a mortgage or young kids). That's why buying term insurance is usually the best bet for most Canadians.

When you buy permanent life insurance, you'll be paying for that coverage for the rest of your life (whether you actually need it or not). You'll also pay much higher premiums each month than what you'd pay for term insurance.

Why? It's more expensive for insurers when they know they'll have to pay out death benefits eventually. They compensate by charging much more for coverage.

How to Find the Best Life Insurance for Millennials

Are you ready to buy a policy? Here's what to look for to find the best life insurance for millennials:

  • Financial strength: A life insurance policy will benefit your family only if your insurer is still standing when you die and it's time to pay out your death benefit. That's why it's important to choose an insurer that's in excellent financial shape. The good news is that the Canadian insurance industry is very tightly regulated. And as a result, most Canadian insurance companies are in tip-top financial shape. 
  • Rates based on health status: Some insurers offer more competitive rates for certain pre-existing conditions (e.g., diabetes). Shop around if you have a pre-existing condition to see who can give you the best rate
  • Electronic application and document delivery: Don't want to wait long for approval? Choose an insurer that accepts electronic applications and delivers policy documents electronically. This way, you won't be at the mercy of snail mail and paper application processing.
  • Price: If all else is equal, choose the insurer who gives you the best price. When you buy a car, a lower price might mean that you're paying for fewer features or lower quality. But in insurance, a lower price usually just means that a company is offering a more competitive rate to win you over as a customer.

How Much Does Life Insurance for Millennials Cost?

Now for arguably one of the biggest questions you may have - how much is all of this going to cost?

Let's look at some sample life insurance rates for millennials from the best life insurance providers in Canada, assuming they are applying for a 20-year plan valued at $250,000.

Female Monthly Premium Male Monthly Premium
The Canada Life Assurance Company$13.50/month$17.10/month
Wawanesa Life Insurance Company$14.85/month$18.23/month
The Empire Life Insurance Company$14.40/month$18.68/month
SSQ Insurance Company INC$15.08/month$19.13/month
RBC Life Insurance$15.44/month$19.62/month
Industrial - Alliance Life Insurance$15.53/month$19.80/month
BMO Life Assurance Company$17.55/month$20.03/month
Sun Life Assurance Company of Canada$18.00/month$22.28/month

Based on the average millennial age of 30 years old

You can cover you and your loved ones for the same price as one less takeout meal a month!

So as you can see, life insurance is generally more affordable than most people think. If you start shopping around now, buying life insurance as a millennial doesn't have to break the bank.

It will be a small purchase with a big impact on your peace of mind.

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