Life insurance is something that most people buy in adulthood. In fact, 70% of Canadians own some form of life insurance.

It certainly isn’t fun to think about the possibility that you could die early in life. But for most people, the idea of leaving their family with no financial support if they were to pass away is worse. In fact, it’s pretty unbearable. Of course, life insurance doesn’t make the grief go away. But it can help families get back on their feet financially if something were to happen to the primary breadwinner.

If you’ve ever looked into life insurance before, you probably know that it’s pretty easy to get life insurance quotes. What’s downright confusing? Trying to compare the quotes and understand what each one offers.

The good news is that’s exactly what we’re going to walk you through in this article. Keep reading below to learn all about getting and comparing life insurance quotes.  

What is life insurance: The basics

To put it simply, life insurance is an agreement with an insurance company. You pay a monthly fee and in return, your insurance company agrees to pay out a lump sum of cash to your family if you pass away during the time that your insurance policy is active.

For most people, this monthly premium is about $30–50/month.

Who needs life insurance?

Life insurance is for anyone who has a spouse, partner, or children who rely on them financially. This means that if your monthly income helps support your family’s expenses (anything from groceries to debt payments to monthly retirement savings contributions, etc.), you’re probably someone who needs life insurance.

In short, if you want to leave your loved ones with financial stability, you should buy life insurance. On the other hand, if you’re retired or don’t have any financial dependents, a life insurance policy probably won’t benefit you (and you won’t have to pay monthly premiums—lucky you!).

Unfortunately, many people are skeptical about life insurance or confused about how to get it. We’re going to let you in on a secret, though: life insurance is easier to understand than your broker may have led you to believe. We promise!

What impacts the price of life insurance?

There are many factors that influence the cost of life insurance. That’s why it’s smart to find the best rate for the amount of life insurance you want to buy.

Here are the main factors that will impact your price:

  • Age
  • Gender
  • Smoking status
  • Personal health
  • Driving history
  • Risky hobbies

Let’s talk about each of these individually.

Your age – It’s more likely that a 60-year-old will pass away in the next 20 years than a 20-year-old will. That’s why for a 20-year policy, the 60-year-old will end up paying quite a bit more than the 20-year-old. Sorry, folks. There’s no senior’s discount here. 

Gender – Believe it or not, this will impact your price. Women are more likely to outlive men. (In fact, their average life expectancy is about 3 years longer.) This means women will get slightly lower prices. 

Smoking status – Smoking can harm your health and increase your risk of an early death in many ways. And you can bet that insurance companies know this. That’s why smokers are considered to be about 2x as risky for a life insurance company than nonsmokers and will, therefore, get double the rates compared to their nonsmoking counterparts. The good news is that if you ever stop smoking, insurers will reward you for that! Smokers can always get their rates lowered after the fact (as long as they stop smoking for 12 months straight). So if you were looking for another reason to quit, this is it!

Personal health – When you apply for life insurance, insurers scrutinize your health. If you’ve recently had a heart attack or stroke or have had a severe illness in the last 5 years, life insurance companies will increase your rates. The important thing when applying for insurance is to be honest about your health history. Lying about your health is insurance fraud and could lead to a claim being denied, which is MUCH worse than having to pay a higher rate. 

Driving history – Driving accidents are a leading cause of death in Canada. That’s why insurance companies will ask if you’ve been in any major driving accidents in the last few years. If you’ve had a DUI or a careless driving charge, this could impact your rates too. When insurers look at your driving history, the last 3 to 5 years carry the most weight.

Risky hobbies – If you’re a frequent skydiver or an amateur pilot, you’re probably at a higher risk of an accidental death than the average Canadian without these hobbies is. For this reason, your rate or policy may be impacted by these hobbies.

How do insurance companies collect information on all of these factors? Most of them will ask you to jump on a quick phone call with one of their healthcare professionals to go through 20–30 questions about your health and lifestyle. Some life insurance providers also require a medical exam to assess basic metrics like height, weight, blood pressure, and cholesterol. They’ll use this data to make a final decision about the price of your policy.

Term vs. Whole life insurance

There are two main types of life insurance on the market:  term life insurance and whole life insurance.

Term life insurance provides coverage amount for a certain length of time, usually 10–30 years. If you pass away during this time, your loved ones will get the amount of money you’re covered for.

Whole life insurance is sometimes called cash value insurance or permanent life insurance. The coverage lasts for your entire life. This might seem like a great deal on the surface. After all, you’re going to die at some point. And wouldn’t you want to protect your family for as long as possible?

Whole life insurance premiums are usually much higher than the premiums on term life insurance policies, but they tend to stay the same no matter your age. That’s because your premiums are designed to build cash value over your life. But don’t be fooled: this is NOT a cost-free financial investment, and it turns out to be much more expensive and inflexible than other ways of investing your money.

Universal life is another type of permanent life insurance that combines life insurance with tax-advantaged investing. Read up on all types of life insurance here.

How to compare term vs. whole life insurance

Life Insurance Recommended For Term Life Insurance Whole Life Insurance
Lower Prices
Choice of Policy Length
Never Expires
Rates Locked In
Guaranteed Death Benefit
Accumulates Cash Value

Getting a life insurance quote

There are several places to get life insurance quotes. Many companies will even give you instant life insurance quotes online.

But remember, these quotes are based on only 3 factors—your smoking status, your age, and your gender. They are NOT personalized to your specific health situation. As a result, you’ll need to undergo life insurance underwriting to confirm the final rate that your insurance company is offering you. And at least for now, underwriting isn’t something that can be done with the click of a button. 

How to buy life insurance

There are three main ways to buy life insurance:

  • You can go directly to a life insurance company online (like TD bank)
  • You can go through an independent local insurance broker
  • You can buy insurance from an independent broker online

Are some of these ways better than others? Yes.

Buying life insurance from an independent broker (either local or online) is always a smart decision. Why? Because agents who work for a single life insurance provider won't help you get life insurance policy quotes from a variety of companies to make sure you get a reasonable price. Life insurance prices are very complicated and can vary widely across companies for the same type of policy. So unless you want to spend more than you have to on life insurance, it’s essential to shop around and compare quotes.

Remember though, the first step to buying life insurance is to figure out how much you actually need. This amount depends on your household (having a spouse or kids who depend on you) and your financial situation. For example, do you have debts to pay? Will your family need to replace your income to cover their everyday living expenses? Do you want to fund a college education for your children? 

Where to get online life insurance quotes

There are several websites and online platforms that help you get and compare life insurance quotes. Remember, these immediate price quotes are usually estimates and are based on only 3 factors: your smoking status, your age, and your gender.

Will going with PolicyMe cost me more?

No way! If anything, going with PolicyMe is going to save you money.

Our term life insurance is the most affordable product in Canada with no impact on your coverage – you pay less than other providers but have the same product with the same security! Check out how the prices compare.

You also know if you're recommended to get life insurance, it's because you need it. Our agents are salaried and not incentivized to sell you something you don’t need. Phew!

chart comparing term life insurance quotes offered by PolcyMe and it's competitors for different ages

How to compare life insurance quotes

To find the best rate for you, be sure to compare life insurance quotes from several companies. Prices can vary widely depending on the type of coverage you choose and personal factors, such as your age, gender, and health.

Going with the lowest price is usually a good choice. But feel free to select a different option if you prefer a particular brand or want a quicker approval process. Every insurer working with PolicyMe has exceptional financial stability and will pay out for all causes of death (except suicide in the first 2 years of the policy). So when you buy through us, you won’t have to worry about selecting a company that will go belly up during your policy. 

Do life insurance quotes impact your credit score?

Buying life insurance doesn’t directly impact your credit score because life insurance companies usually don’t report your payment history to the credit bureau.

Of course, life insurance isn’t a free-for-all. So there are consequences of not paying your life insurance premiums: your policy will lapse, and you’ll lose your coverage. But this won’t directly impact your credit score.

Life insurance and COVID-19

As COVID-19 updates become world news, you may start to think about buying a life insurance policy or wonder how an outbreak might shape the policy you already have.

The good news is that once your life insurance policy is in place, it will pay out for all types of death, including anything related to complications from COVID-19 or any other disease. The only exceptions are suicide in the first two years or if your policy includes a clause excluding a specific cause of death (like skydiving if you are a pro skydiver).

Find out more about life insurance and COVID-19.

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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