The Best Life Insurance in Canada 2020
Covid19 update: Amid the COVID-19 pandemic, life insurance companies in Canada are still accepting new life insurance applications. For the latest information on how life insurance companies are managing COVID-19, see PolicyMe's handy guide.
What is 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.
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.
Comparison of life insurance quotes
|Insurer||$250,000 20-year term life insurance|
|Wawanesa||$18.23 / month|
|Empire Life||$18.68 / month|
|RBC||$19.62 / month|
|Canada Life||$19.80 / month|
|Industrial Alliance||$19.80 / month|
|Manulife||$20.16 / month|
|Canada Protection Plan||$20.93 / month|
|Sun Life||$22.28 / month|
Prices based on 30-year old male, non-smoker.
How does life insurance work in Canada?
The structure of a life insurance policy is very simple. You pay premiums each month to an insurance company over an agreed period of time. If you pass away when the policy is active (while you are still paying premiums) the insurance company promises to give your loved ones a tax-free lump sum cash payment (the "death benefit") if you die.
This death benefit will help your loved ones reach their financial goals, paying monthly bills and maintain their lifestyle, even if your paycheck isn't coming in to help support them.
What types of life insurance exist?
When you are shopping for life insurance, you may be spending a lot of time looking at the product choices - term, whole life, universal life - all that sound familiar? We have broken down the two main types of life insurance for you below.
Term life insurance
Term life insurance pays out a tax-free death benefit to your loved ones only if you die within a specified number of years, usually 10, 20, or 30 years. Term life is the right option if you want protection for the years that matter most (when you still have a mortgage & children in the house).
For most people, the term life insurance company they choose is the one that offers them the best rate. Check out some sample life insurance quotes for a healthy-female applying for $500,000 of 20-year term life insurance.
|Wawanesa Life||$22.50 / month||$32.49 / month|
|Empire Life||$22.50 / month||$35.10 / month|
|BMO||$22.95 / month||$36.90 / month|
|RBC||$23.31 / month||$34.83 / month|
|Canada Life||$23.85 / month||$37.80 / month|
|Industrial Alliance||$23.85 / month||$37.80 / month|
|Manulife||$24.86 / month||$37.78 / month|
|Sun Life||$26.10 / month||$40.50 / month|
How to get a life insurance quote? Check out PolicyMe's handy tool to compare life insurance quotes in Canada.
Anything else to consider when comparing term insurance companies in Canada? When comparing quotes online, remember that these are just helping you get a basic idea of how much your monthly premiums would be if approved at standard rates. When you submit your application, it's sent to an underwriter whose job it is to review your information and to calculate the cost of insuring you. Your underwriter will review your health, financial wellness, and lifestyle data and set a final price for your policy (don't worry, 90% of our applicants are approved at the quotes they were given!)
Whole life insurance
Whole life insurance, a type of permanent life insurance, pays out a benefit to your beneficiaries no matter when you die (hence why it is called permanent insurance). Whole life insurance policies are much more expensive than term life insurance policies. This is because the policy also acts as an investment account. 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.
Whole life insurance (and any permanent life insurance policy) is much less straightforward than term insurance. You'll want to understand all the fine print before buying this kind of policy. So it is important to understand all the details of your permanent life policy before picking a whole life company. For example, be sure to know the terms of the cash value component. Every whole life policy has a guaranteed interest rate, you should understand how these differ by company.
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Top 5 companies for life insurance in Canada
You probably know by now 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. So let us do the legwork for you.
As of 2020, the best life insurance companies in Canada include Manulife Financial, Wawanesa Life, BMO Insurance, Canada Protection Plan and Industrial Alliance.
Pick #1 - Manulife Financial
Best life insurance for couples
Manulife is one of the biggest insurers in Canada, with over 30 million customers worldwide. It is also one of the oldest insurers and was founded in 1887. Manulife offers a wide range of life and health insurance products as well as group life insurance plans. Many customers may recognize the brand if they have some health coverage through work!
Manulife's Combined Family Term life insurance policy acts like a family policy that covers both you and your partner. It operates like having two separate policies (2 separate death benefits will be paid) but there is a discount on the policy for combining them into one.
Better yet, insurers actually offer discounts when you apply with your spouse! This discount can be anywhere from $3-5 per month (as the insurers only charge what they call a "single policy fee" on combined policies). Manulife adds an additional 3% savings when you select the same coverage amount and policy length for you and your spouse. They are the only ones in the industry to offer the extra 3% savings.
Top things to consider when choosing Manulife
- Low Cost: Usually the most affordable option for couples applying together
- Faster time to approval: Manulife has a faster than average turnaround time. In 2017, Manulife launched an accelerated underwriting program for its term and permanent life insurance products. This means they offer fluidless medical underwriting (no blood or urine tests) for over 75% of applicants.
- Easy access to policy documents through eDelivery: Quick delivery of your policy documents right to your inbox
Pick #2 - Wawanesa Life Insurance
Best life insurance for individuals
Wawanesa is one of the oldest insurers in Canada, founded in 1896 in Wawanesa, Manitoba. It's headquarters now sits in Manitoba; however, it is licensed in all provinces across Canada. Wawanesa Life is rated by A.M. Best as part of the overall Wawanesa organization. Wawanesa Life and the parent company, The Wawanesa Mutual Insurance Company are both rated A (Excellent).
Wawanesa's Lifetime term product offers a huge selection for anyone applying. Their plans consist of 10, 15, 20, 25 and 30-year policy lengths. They also offer some of the best prices in the market, and most applicants will find that Wawanesa ends up being the most affordable option for their needs!
Top things to consider when choosing WawanesaLife
- Low Cost: Wawanesa's life insurance products are generally some of the most affordable products on the market for all age groups!
- Lots of flexibility: Applicants are limited to just 2 or 3 policy lengths. With Wawanesa, applicants can apply for 10, 15, 20, 25 or 30-year policy lengths.
- Easy policy laddering: Think you can benefit from a personalized ladder policy with multiple coverages at different policy lengths? With their large number of policy lengths to select from, Wawanesa might be the insurer for you.
Pick #3 - BMO Insurance
Best life insurance through a bank
BMO Insurance is a member of BMO Financial Group, one of the largest banks in Canada that was founded in 1817. A.M. Best Company gives BMO a Financial Strength Insurer Rating of A, making them an excellent choice.
With competitive pricing and a range of policy options, BMO is a good potential option for many life insurance shoppers. Cost tends to be one of the most important factors in choosing a life insurance company and BMO has some of the most competitive costs in the industry. However, BMO does fall short in the length of time it takes to get approved. On average, shoppers will have to wait 4-6 weeks before they get an approval on their policies which is a deal-breaker for some!
Top things to consider when choosing BMO Financial
- Low cost: BMO has some of the most competitive costs in the industry
- Long application process: BMO requires enhanced medical requirements for customers looking to buy non-face-to-face, making for a longer than usual time to get approved.
- No eDelivery - Getting your life insurance policy will take some time as BMO will need to print and deliver the paperwork for you vs. sending the documents electronically.
Pick #4 - Canada Protection Plan
Best life insurance for people with severe medical diagnoses
Canada Protection Plan is a leading provider of No Medical & Simplified Issue Life Insurance in Canada. That means that they do not require the extensive medical telephone exams needed with the other insurers in Canada. Compare Canada Protection Plan life insurance quotes today.
Shopping for a life insurance policy can be especially intimidating for anyone recently diagnosed with a severe health condition such as a heart attack, cancer, or a stroke. Simplified issue or guaranteed issue products are life insurance products that do not require medical exams (or sometimes even medical questions) to qualify. The trade-off is that the policies are much more expensive than traditional term life insurance and usually cap you on the total amount of coverage you can buy. But if you are unable to purchase regular term insurance, a simplified issue or guaranteed issue life insurance policy could be an excellent way to get some life insurance coverage and a small death benefit for your family.
Top things to consider when choosing Canada Protection Plan
- Not for everyone: Canada Protection Plan offers many options for elderly customers and those that have not been able to get insurance in the past. However, if you are young and healthy, this is probably not the right insurance provider for you.
- No medicals required: A Canada Protection Plan application requires no fluids, no doctor's notes, and no medical exams.
- Fast time to approval: Given there are no fluids or medical tests, Canada Protection Plan has some of the fastest approval times in the industry. Often, customers will be approved within as little as 48 hours!
Pick #5 - Industrial Alliance
Best insurance for smokers
Founded in 1892, iA Financial Group is one of the largest insurance and wealth management groups in Canada, with operations in the United States.
If you are a smoker, Industrial Alliance may be the right company for you! On average, they priced more competitively for smokers than other life insurance companies that we compared.
If you smoke cigarettes, chew tobacco, or even vape, you'll probably pay more for life insurance. Why? As you already know, smoking puts you at a higher risk of developing health issues later in life. And as a result, smoking puts you into a higher risk category in the eyes of your life insurer. Smoker/ tobacco rates can be up to 2x to 3x more than non-smoker/non-tobacco rates. The good news is iA tended to have the best rates for smokers in the industry.
Top things to consider when choosing IndustrialAlliance
- Average pricing: Industrial Alliance prices are in line with the rest of the market. However, they do have above average pricing for select customer characteristics (smokers, under 40, and female).
- Lots of flexibility: Industrial Alliance's Pick-A-Term life insurance product stands out from other coverage on the market by allowing applicants to choose their policy length with anything from 10 to 40 years
Full list of Canadian life insurance company reviews
Canada Protection Plan Life Insurance Review
BMO Life Insurance Review
Industrial Alliance Life Insurance Review
RBC Life Insurance Review
Canada Life Insurance Review
TD Life Insurance Review
Manulife Life Insurance Review
How much life insurance coverage do I need?
Every life insurance policy should be as unique as the individual it insures. Finding the right policy for you involves an understanding of your financial situation, your family structure and your lifestyle. But even two families with the same characteristics might require very different recommendations.
It is important to get personalized advice when searching for your life insurance policy. At PolicyMe, we believe that recommendations should be as unique as the needs of you and your family, so they have access to the security they need at the best possible value.
Our easy-to-use life insurance checkup helps you in setting your objectives by looking at all the personalized factors unique to you and your family. Our proprietary algorithms do the rest, analyzing your partner's income, family savings and family spending habits to calculate the amount of coverage that matches your objectives.