The Best Life Insurance for Young Adults in Canada: A 2026 Guide

Do young adults need life insurance?

While thankfully rare, death between the ages of 18-35 can be financially difficult for the ones left behind. At this age, it’s normal for young Canadians to take on large financial burdens such as student loans, mortgages, or a young family without being able to pay them off outright. 

Life insurance provides cost-effective financial protection to your dependents and loved ones. In exchange for monthly payments known as premiums, your life insurance provider agrees to give your beneficiaries a tax-free insurance payout should you pass away.

In short, if you have debts or financial dependents, it's probably worth buying a life insurance policy.

‍

Do I need life insurance if I have group coverage?

Consider buying coverage even if you have group life insurance because the latter often leaves people underinsured. There’s more to your insurance needs than simply multiplying your annual income by several months. Plus, you’ll lose access to your life insurance coverage if you ever switch jobs.

Is life insurance affordable for young adults?

Age is one of the biggest contributing factors to the cost of life insurance. The earlier you buy, the less you pay. 

Most life insurance policies keep level premiums throughout the life of your contract, meaning you can lock in an affordable life insurance rate if you buy young:

^{*Prices reflect the average monthly cost of an annual payment plan for a 20-year term life insurance policy with $500,000 in coverage for a non-smoker living in Ontario.}

For comparison, the same life insurance policy costs an average of $274 to $391 per month for a 60-year-old policyholder. The best time to buy life insurance was yesterday; the second-best time is today!

Besides your age, the amount of coverage you need also has a major influence on affordability.

“Life insurance is supposed to provide peace of mind, yet our findings show that too many Canadians either don’t have coverage or don’t trust the industry.”– Andrew Ostro, CEO & Co-Founder

How much life insurance do young adults need?

For young adults between 18 and 35, your life insurance coverage amount should be tied to income replacement in order to cover your debts and dependents. Your age matters, but your financial obligations matter more.
‍

The right amount is personal

Young adults may need anywhere between $100,000 and $1 million in life insurance. You might need $1 million if you have a mortgage, a high income, and several dependents. You might need $250,000 if you rent and have a partner but no children, or perhaps no coverage at all if you don’t have any dependents.

Olivia (24)

Olivia just purchased a condo. She has a good job earning $85,000 per year, but her parents co-signed her mortgage. Olivia is dating casually and has no children.

Olivia can purchase a $200,000 20-year term life insurance policy to help protect her parents from their joint mortgage contract. If she passes away, Olivia’s parents will probably sell the condo but first they’ll receive a payout that covers final expenses and a year or two of mortgage payments so no one is in a rush.

Marcus (28) and Danika (29)

Marcus and Danika are newly married. They currently rent and would like to have children. Danika earns $45,000 per year and Marcus earns $55,000 per year, but one parent plans to stay home with the children.

Marcus and Danika can purchase two individual 30-year term life insurance policies worth $1M each. If one person passes away, the other person will receive a payout that covers 30 years of income replacement to help raise kids and pay the rent. They want convertible term policies, as Marcus’s family has a history of kidney disease and wants the option to convert to permanent coverage if needed.

Ultimately, the right amount should be individually calculated for your needs. For instance, a 30-year-old may only need $250,000 in life insurance coverage if they live simply, rent, and have a partner with a high income. 

It’s okay to get specific instead of estimating! Why pay for a $1M policy if you only need $750,000 in coverage?

What’s the best term life insurance for young adults?

Most life insurance providers in Canada offer their best rates to younger applicants, but below is a table showing some unusually good deals. The best life insurance in Canada for young adults offers prices between 9%-20% below the industry average:

^{1 For each product, we averaged the monthly premiums for female non-smokers between the ages of 18-29 across every term length available.}

Term life insurance by PolicyMe

Versatile Term by Co-operators

Term Simplified by Beneva

Term life insurance by Equitable Life

^{2 We compare the yearly cost of each product to the average cost of similar products for the same type of applicant. These figures show the approximate price difference for a female non-smoker between the ages of 18-29 seeking a 10-30-year term life insurance policy with $50,000 of coverage.}

Life insurance for young adults 101

Below, PolicyMe’s team of licensed life insurance advisors offer three detailed answers to your most important questions, tailored to young Canadians.

How to get life insurance as a young adult

Thanks to modern technology, the hardest part of buying life insurance is determining your needs and understanding your options. The 6 major steps to buying life insurance are:
‍

1. Determine how much life insurance you need.
2. Choose which type of life insurance to buy. 
3. Choose your life insurance options.
4. Submit a life insurance application to your provider of choice.
5. Wait for approval.
6. Receive your life insurance policy and start making payments.

Should I buy term or permanent life insurance?

There are two types of insurance in Canada: term life insurance and permanent life insurance. As the names suggest, term coverage lasts for a period of 5-50 years, while permanent coverage lasts for as long as you pay your premiums. 

PolicyMe always recommends buying term over permanent coverage because it’s usually one of the most affordable options and it covers you while you have significant financial obligations, like kids, a mortgage, etc.

Let’s say you’re a 30-year-old female non-smoker living in Ontario and you need a policy to cover a $600,000 mortgage. You get a quote from PolicyMe for a 20-year term life insurance plan for $22 per month.

For the same amount of permanent coverage, you’d have to pay about $269.59 per month. If you wanted to keep the same price, your policy would cover a mere $40,000.

Credit card debt, child-rearing, mortgages, and student loans don’t last forever. Tailoring your life insurance policy’s term length to the length of your obligations helps you save money, and when your original term expires, you can buy a new one with the right amount of coverage for your new financial situation.

The bottom line: Not only do permanent insurance policyholders end up paying way more over the long run, but they also tend to end up overinsured later on. A whopping 40% of permanent insurance buyers end up cancelling their coverage after 10 years due to high premiums.
‍

What do I do when my term expires?

Once your term life insurance expires, you either renew your policy at a higher rate or cancel it and shop for a new one.

PolicyMe always recommends buying convertible term life insurance. In the event your health changes, you can usually convert your policy to permanent coverage without a medical exam or the risk of being rejected.

Is life insurance a good investment?

Permanent life insurance comes in three flavours, the most exciting of which are whole life and universal life insurance. These policies spice things up with cash values–which act like savings accounts attached to your policy–and/or participating dividends, which allow you to share in your insurance provider’s yearly profits. 

For the majority of Canadians, these permanent life insurance options simply aren't worth it. Not only do they increase your premiums, but they also take decades (if not a lifetime) to appreciate. Unlike a traditional investment account, you can’t transfer out your funds if you change your mind, and if you miss even a single payment, you may lose the entire value of your life insurance policy.

Do young adults need to take a life insurance medical exam?

Life insurance medical exams are part of the full underwriting process that providers use to assess your mortality risk. Fully underwritten policies usually offer the lowest life insurance rates because they’re based on the most accurate picture of your health.

If you don’t want an exam, you can opt for one of two types of no medical life insurance: simplified issue life insurance (which includes a medical questionnaire), and guaranteed issue life insurance, which accepts all applicants. 

The good news is that unless you request over $1 million in coverage or you have serious pre-existing medical conditions, young Canadians usually qualify for fully underwritten life insurance with no medical exam. It takes 20 minutes or less to get a quote from PolicyMe and to find out if you qualify for instant approval.
‍

How much does no medical life insurance cost?

Compared to a fully underwritten policy, no medical life insurance can cost up to twice as much. Think $65.32 per month for term life insurance with $500,000 in coverage (versus $31.68*), or $30.15 per month for permanent life insurance with $50,000 in coverage (versus $39.28**).

PolicyMe always recommends applying for fully underwritten life insurance first. Most life insurance applicants receive the coverage they apply for at standard rates, and if you’re rejected, it won’t hurt your application for a no medical product later.

^{* For a 10-30-year policy for a female non-smoker living in Ontario between the ages of 30-44.}

^{** For a permanent policy for a female non-smoker living in Ontario between the ages of 30-44.}

FAQ: Best life insurance in Canada for young adults