After reading a few blog posts, browsing some insurance websites, and chatting with some friends who seem to have life figured out, you’ve decided to buy term life insurance.
But now that you’ve made this all-important decision, you’re not really sure where to start. How do you actually buy term life insurance in Canada?
Well, we’ve got great news! Below, we break down how to easily find, compare, and finalize term life insurance quotes in Canada so that you can protect your loved ones financially.
What is term life insurance?
Term life insurance is the simplest and most affordable form of life insurance. It pays out a benefit to your beneficiaries only if you die within a specified time frame, usually 10, 20, or 30 years.
Once the term expires, you can either renew it for another term, convert the policy to permanent coverage, or allow the policy to terminate.
How to get a term life insurance quote?
The first step to buying life insurance is to get quotes for a policy. In Canada, there are 3 ways to get life insurance quotes:
1. Directly on an insurance company’s website
One option is to visit the website of a particular insurance company (like TD bank) and get a quote directly from the company online. This is like going to the Air Canada website and looking for the price of an Air Canada flight from Toronto to Paris.
If you knew that you definitely wanted to buy your policy from this particular company, this would be a quick and easy way to get a quote for term life insurance. However, because you won’t get quotes from other insurance companies, you won’t know if someone else can give you the same kind of coverage for less—just like the Air Canada website won’t tell you if another airline offers a cheaper Toronto–Paris flight.
2. Through a local independent insurance agent
A second option is to get quotes from a local independent insurance agent in your city or town. This is like going to your local travel agent office and having an agent help you find options for a Toronto–Paris flight.
The advantage of working with a local independent insurance agent is that you’ll be able to get quotes from multiple insurance companies. This will let you compare quotes to find the best one. You’ll also get to talk to an actual insurance agent who can answer your questions and provide advice, even if you just communicate remotely.
However, because you’ll work with an actual person to get a quote, you’ll have to get in touch with them, wait for them to respond, give them the info they need to get you some quotes, and then wait again to receive the quotes.
3. From an online independent broker
Your third option is to get quotes from an online independent broker, like PolicyMe. This is like using an online travel website, such as Expedia or Travelocity, to find options for a Toronto–Paris flight.
When you use an online independent broker, you can get and compare several life insurance quotes in just a matter of minutes. You won’t have to wait for insurance agent Bob to read your email or online request form and get back to you.
So that all sounds good, but what about the advice piece? Wouldn’t that be missing if you’re not working with an actual insurance agent? With some online brokers, yes. But that’s not the case with us.
You see, at PolicyMe, our platform gives you competitive quotes from the best insurers in Canada + personalized life insurance advice based on your particular needs. And if chatting with a real human is still your kind of thing, you can always talk to one of our licensed advisors.
How to compare life insurance quotes?
Just like when you buy a flight or hire a painter, you can, in theory, just go with the first price you get. But if you take a pass on shopping around, you’ll always wonder whether you really got the best bang for your buck. And unless you just happened to luck out with your one and only quote, it’s more likely than not that you did, indeed, pay more than you needed to. That’s why comparing life insurance quotes is a no-brainer.
When you use PolicyMe, getting and comparing life insurance quotes is so quick and easy that you’ll wonder why you waited so long to do it!
So how does it work?
All you have to do is fill out a simple online form that asks for your date of birth, gender, and smoking status. These are the characteristics that insurance companies base their initial quotes on.
Then, you’ll be asked to select your coverage amount and term length. The right options for you will depend on your family’s particular situation. But in general, you’ll want to make sure that your policy will cover all of your expenses until your mortgage is paid off and your kids are out of the house. If you want to pay for other expenses, like your kids’ university tuition or your funeral costs, you might need more coverage or a longer policy length.
Once you select the coverage and policy length you need, you’ll get several quotes from top Canadian insurers ranked from lowest to highest price. You can pick any of quotes, but we generally recommend going with the cheapest one. A cheaper quote usually doesn’t mean that an insurer is doing something shady. In most cases, they’ve just priced the policy more competitively to win you over as a customer.
And that’s it! Yup, it really is that simple!
How to get your final quote?
Initial term life insurance quotes are based on your age, gender, and smoking status. But to get a final quote, your insurer will need a few more pieces of information from you to complete their underwriting process.
Specifically, they’ll need to know about your health history to find out how risky it is for them to insure you. Most insurers do this by having applicants complete a quick, at-home medical exam. A nurse will come to your home to collect vitals (like your weight, height, and blood pressure) and draw blood. Some might ask for a urine sample too. Alternatively, your insurer might just have you do a 20-minute phone call with a healthcare professional. During the call, you’ll be asked about your personal and family medical history.
Your insurer will also collect information about your lifestyle and financial status. Why do they need to know if you go rock climbing or scuba diving on the regular? It’s not because they’re fascinated by your exciting life. Instead, risky hobbies increase your risk of dying at an early age. And insurance companies are very interested in knowing anything that could raise the chances that they’ll have to pay out your death benefit.
Once your insurer has all the info they need from you, they’ll use it to determine whether they can approve your application and provide your final quote. Your final quote (the premiums you’ll pay each month for the entire duration of your term policy), might be higher, lower, or the same as your initial quote from that insurer.
How much does term life insurance cost in Canada?
So here’s the million dollar question: how much will you actually need to pay for term life insurance in Canada?
As we just mentioned, the exact amount that you’ll pay for term life insurance will depend on your personal characteristics, coverage amount, policy length, and insurer.
In any case, though, term life insurance is the cheapest type of insurance on the market. This is because term insurance gives you coverage for a fixed period of time rather than the rest of your life. For this reason, it’s the most affordable way to protect your family financially when you’re young and may have mortgage debt, student debt, financially dependent kids, and other expenses that make your back account bleed every month.
Just how affordable is term life insurance in Canada? If you’re a non-smoker in your 20s or 30s with no pre-existing health issues, you could pay as little as $20/month for life insurance. Not bad, right?
See the table below for more information about typical term life insurance rates in Canada.
|Gender and age||$250,000 20-year term life insurance|
|Male, aged 30||$18/month|
|Female, aged 30||$15/month|
|Male, aged 40||$28/month|
|Female, aged 40||$22/month|
|Male, aged 50||$72/month|
|Female, aged 50||$51/month|
Keep in mind that getting a quote and even completing a medical exam doesn’t make you obligated to buy a policy. You don’t have to commit until your application is approved and you accept the policy. So you really have nothing to lose by getting some quotes for a term life insurance policy.
Ready to find out how much you’d pay for term life insurance?