Life insurance in Ontario
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Term life insurance quotes in Ontario
Average starting costs for PolicyMe term life insurance with $500,000 over 20 years
Age | Premiums For Women | Premiums For Men |
|---|---|---|
30 | $20.68 | $29.67 |
35 | $22.93 | $31.29 |
40 | $33.27 | $44.96 |
45 | $51.25 | $71.49 |
*For a non-smoking person with average health.
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How much does life insurance cost in Ontario?
After reviewing premiums for policies with $500,000 in coverage from 20 insurance providers across the province, we found the average cost of life insurance in Ontario is $54.83 per month, or $657.96 per year, for healthy, non-smoking policyholders aged 30 to 39.
Term Length | Industry Average Rates | PolicyMe Average Rates |
|---|---|---|
10 years | $32.58 | $20.79 |
15 years | $41,75 | $25.76 |
20 years | $50.33 | $30.11 |
25 years | $66.00 | $42.60 |
30 years | $83.50 | $54.15 |
*The table above shows average premiums for term life insurance across 20+ carriers in the industry.
What impacts life insurance cost?
The cost of life insurance isn’t affected by which province you live in, so your Ontario address won’t impact your rates. But, there are a few key factors that will affect how much you pay:
- Your age at the time of applying
- Your coverage levels and policy type
- Your policy term length
Factors like your health, smoking status, and lifestyle factors like your job occupation or extracurricular activities (e.g. high-risk careers paths or hobbies) can also affect your premiums.
What are the best life insurance companies in Ontario?
There isn’t an all-round “best” life insurance company in Ontario. The right fit for you will depend on your coverage needs, budget, lifestyle, and more.
To help you find the best life insurance provider based on what you value the most, we’ve assessed the best life insurance providers across nine core categories.
Category | Insurance Company |
|---|---|
Best Life Insurance Company | PolicyMe |
Best Term Life Insurance | PolicyMe |
Best Whole Life Insurance | Manulife |
Best Whole Life Insurance with Cash Value | Sun Life |
Best Universal Life Insurance | BMO |
Best Participating Life Insurance | Canada Life |
Best No Medical Life Insurance | Canada Protection Plan |
Best Life Insurance for Seniors | Co-operators |
Best Life Insurance for Smokers | Co-operators |
To find the best life insurance companies in Canada, we evaluated over 20 of the largest and most well-known insurers in the country using three categories:
- Affordability: To determine which insurers charge the lowest premiums, we gathered over 2,000 life insurance quotes. Our price data spans smokers, non-smokers, and birth sex, across six age groups from 18-70 and five products (including term and permanent life insurance).
- Customer service: To find out which life insurance companies offer the best customer experience, we averaged review scores from the Better Business Bureau, Trustpilot, Insureye and Google. We also counted the number of contact methods each insurer offers to its customers.
- Industry reputation: To ensure our recommendations were financially sound, we reviewed each life insurance company’s financial stability ratings from leading credit agencies A.M. Best, Morningstar DBRS and S&P Global. We incorporated Glassdoor reviews to reflect each insurer’s ability to manage and support its employees.
All three categories received a final, averaged score out of 5. After adding the results together, we had a definitive list of the best life insurance providers in Canada.
PolicyMe does not receive compensation for any life insurance reviews.
How much life insurance does the average Ontarian need?
Wondering where your budget should sit for how much life insurance you need? Let’s assess some average data from Ontarians to build a sample life insurance policy.
Debt: $22,802
New insights from Equifax show that the average debt for Ontarians is $22,802.1
Income: $78,600
The average annual income for Ontario residents age 15 and over is $78,600.2
Mortgage: $945,408
StatsCan reports an average mortgage debt of $945,408 for Ontarians of all ages.3
Education: $34,056
The average annual tuition fee in Ontario is $8,514 for an undergraduate program, which totals up to $34,056 for a four-year program.4
According to our research, the average Ontarian would benefit from $1,063,066 in term life insurance coverage.
Following the classic Debt, Income, Mortgage and Education (DIME) method, we’ve estimated that the average Ontarian may need a life insurance policy with around $1.1 million at least. On average, a term life insurance policy with a death benefit of that amount costs $525 per year, or $44 per month, for policyholders under age 40.
It’s important to note that this data may look different for Ontarians who live in major cities like Toronto or Ottawa, or for those who reside in rural areas. For a more accurate estimate of your insurance coverage needs, you can use PolicyMe’s online term life insurance calculator to assess three possible levels of coverage.
1 https://www.equifax.ca/about-equifax/newsroom/-/intlpress/delinquency-levels-show-signs-of-stabilizing-but-the-financial-gap-continues-to-widen-for-some-canadians/
2 https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110023901
3 https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110001601&pickMembers%5B0%5D=1.8&pickMembers%5B1%5D=3.1&pickMembers%5B2%5D=5.1&pickMembers%5B3%5D=4.1&cubeTimeFrame.startYear=2005&cubeTimeFrame.endYear=2023&referencePeriods=20050101%2C20230101
4 https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3710004501
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Life insurance in Ontario: Quick facts
61 life insurance providers
Ontarians can browse and purchase life insurance policies from up to 61 licensed companies.5
Ontarians are top life insurance buyers
Following Alberta and British Columbia, Ontario has the third highest life insurance coverage average in Canada of $514,000, topping the national average of $483,000.5
The age of Ontario life insurance buyers align with the national average
Canada’s median age for life insurance policyholders is 41, and Ontario falls right in line with a median age of 40 for life insurance buyers.5
Life expectancy is above average
Life expectancy in Ontario is 82.02 at birth, which is higher than the Canadian national average of 81.4 years.6
Work benefits cover less
Employer-sponsored group life insurance policies cover around 35% of active policies in Canada, whereas individual term life policies total 40%.5
$17.3 billion paid out in 2023
Canadian life insurance providers paid out $17.3 billion in life insurance benefits in 2023, with $9.2 billion in death benefits to beneficiaries and $8.1 billion to living policyholders as disability benefits, cash surrenders, or dividends.5
How do you get term life insurance in Ontario?
Your budget might seem like the most important factor when getting life insurance, but there are a few steps you’ll also need to check off to get the best life insurance policy for your specific needs:
1. Choose the type of life insurance
Term life insurance is typically the best coverage for those who have temporary financial responsibilities, like a mortgage, dependent kids or family members, or outstanding debts. But, permanent life insurance, like whole life insurance, may be a better fit if you have lifetime dependents who require long-term financial support.
2. Understand your coverage options and needs
Start by calculating how much money your loved ones would need if you passed away. Experts generally recommend seven to ten times your annual income, but you can also use a life insurance calculator or speak with an insurance advisor to make the best choice.
3. Compare life insurance providers in Ontario
Research reputable insurance companies in your area and take a look at reviews from current and past policyholders. Be sure to check out their financial stability, such as A.M. Best or Fitch’s ratings, and look at what type of coverage and riders they offer. You may be able to request quotes from some companies before filling out a full application, which can give you a better idea of how much you’d likely pay.
4. Fill out an application form
Once you choose an insurance provider that seems like a good fit, fill out a life insurance application. You may be able to do this online or through an agent, and you’ll need to provide your name, contact information, and health or lifestyle details.
5. Gather your documents
You will likely need to submit documents, fill out a health questionnaire, and complete a medical exam during the application process. These steps will help your provider adjust your premium to your risk level during the underwriting phase, which can also bring your rate down.
6. Approval, review, and sign
Once your policy is approved, you’ll want to thoroughly read through it to understand your coverage, exclusions, payment schedule, and more. You can correspond with an insurance agent during this step if you have any questions.
Why term life is the best life insurance type for most families in Ontario
Term life insurance is typically cheaper and more valuable to Ontario policyholders and their loved ones because it keeps you covered during the years you need it most. However, permanent life insurance may be the smarter choice for individuals with long-term responsibilities, like lifelong dependents, or those who want to leave a financial legacy.
To help you make the best choice for your life insurance coverage, we’ve unpacked the most common questions about permanent and term life insurance:
Permanent life insurance products can offer a cash value component that grows over time, but it isn’t the wisest investment option. These policies are far more expensive than term life insurance and the return from their investment components don’t measure up to those of FHSAs, RRSPs, or TFSAs. So, you might be better off saving on premiums with a term policy and investing your money in another tax-deferred contribution.
For those with children who may need medical, emotional, or financial support beyond the age of 18, it may be a good idea to discuss your permanent life insurance options with an advisor. However, many term plans can be converted into permanent plans, so it’s a good idea to also review term life policies with convertibility options.
Not necessarily. Term life insurance helps you protect your family at a budget-friendly rate, which gives you financial flexibility for other expenses or investments. Term policies are a great way to have life insurance when it’s needed most, at a price that doesn’t greatly impact your bank account and allows you to grow your finances in other areas for you and your loved ones.
FAQs: Life insurance in Ontario
Term life insurance typically costs between $40 to $138 per month for policyholders under the age of 40 in Ontario. Factors like your age, lifestyle, policy length, coverage, and riders (e.g. critical illness insurance) will impact how much your policy costs.
Life insurance is not taxable in Ontario. Beneficiaries of life insurance in Ontario will receive the full amount of the policy payout in the form of a lump sum, which is tax-free. This is especially true for a term life insurance plan.
However, there can be complications with taxation for a permanent life insurance policy. If your permanent policy accumulates cash value over time and you withdraw from your policy, that portion will be taxed. Interest earned on payouts may also be taxed as income.
There isn’t a specific “best” life insurance provider in Ontario. The best insurer for you will depend on your budget, coverage needs, policy management preferences, and more. For example, if you want affordable, quick term life insurance coverage from a provider that offers a completely digital application process, an insurance solution like PolicyMe would be a great choice.
Yes, life insurance is worth it in Canada, especially if you have dependent family members or large financial responsibilities like a mortgage or major loans. Term life insurance can give you peace of mind for your family’s financial security if you passed away, helping them cover anything from mortgage payments, childcare cost, replace lost income, or manage your final expenses. Term life plans are especially worth it because they are generally affordable and give you coverage for a specific period where you need it most.
