Best Life Insurance Options for Canadian Families (2026)

What is the best life insurance for families?

The best life insurance strategy for a Canadian family depends on their specific needs, but most families should consider:

• A term life insurance plan for each parent
• Child coverage if it’s available as a free or low-cost add-on

Term coverage for families: Term is the best life insurance option for most Canadian families. The premiums are affordable ($10–30/month per parent) and you can match the term length to your specific financial obligations. 

Permanent coverage for families: Lifelong coverage with whole or universal life insurance are unnecessary and unaffordable for many Canadians, despite the cash value growth potential. However, permanent policies may be appropriate for estate planning or lifelong dependents. 

Joint life insurance for families: Couples can use joint life insurance to provide a single payout, either upon the first partner’s death or the second death. But individual term policies provide two payouts and more flexibility.

By putting life insurance in place early, you can protect your family’s financial future against the costs associated with passing away while your dependents are reliant on you.

New homeowner or looking to buy property? 42.3% of applicants say that a mortgage was a top reason for buying term life insurance. It’s wise to consider insurance when taking on a major debt like a mortgage, especially when it’s a joint debt.
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Affordable life insurance for parents

Looking to buy life insurance as a new parent? You may want to check out our guide to life insurance for parents, which compares life insurance options from leading providers based on your child’s age and your future financial goals.

How much life insurance does a family actually need?

Canadian families need enough life insurance to protect their long-term financial goals, which may include covering a mortgage, replacing income, or putting a dependent through school.

Consider the life you want for your family. Does it include:

• Paying for childcare?
• Paying off car loans or other outstanding debts?
• Paying off the mortgage on the family home?
• Putting your children through school?
• Replacing your income for several months to a year?

Once you’ve added up the total cost of your goals, it’s time to think about how to accomplish them if you, your partner, or both of you pass away. That’s why PolicyMe recommends buying a separate life insurance policy for each parent: two policies cover every eventuality, and provide two payouts if the worst happens.

For example, let’s say you and your partner have one child and a 25-year, $500,000 mortgage. Each of you buys a 25-year term life insurance plan with $400,000 in coverage.

If one of you passes away, the life insurance payout will be enough to cover half of the mortgage ($250,000) and half of the average cost of raising a child to age 17 (around $150,000). If both of you pass away, the resulting payout will be more than enough to cover your child’s needs.

Another advantage of separate term life insurance policies is that you and your partner can purchase different amounts of coverage. You can tailor your policy to your individual earning power without overpaying or going underinsured.

Why families delay buying life insurance (and why that can cost more later)

Families may not buy life insurance because coverage feels too expensive or because they feel young and healthy. 

But take note that buying life insurance earlier means lower premiums and easier approval, and waiting can raise the cost of your coverage. For example, coverage starts around $19 per month for a healthy 18-year-old woman and increases to $37 per month at age 30. 

Premiums tend to increase with age, as health risks increase. Waiting also means you could develop new health conditions which might make policies harder to qualify for.

How much does family life insurance cost?

Family life insurance costs between $40 and $100 per month for most families, and that’s affordable life insurance for parents where both adults are insured. 

Here are average rates for a 20-year term policy with $500,000 of coverage for nonsmokers. This table shows the 10% discount that couples receive with PolicyMe on first year premiums. 

^{* These figures are based on publicly available rates for PolicyMe term life insurance for applicants of average health for a 20-year term with $500,000 in coverage. The figures include the 10% couples discount that eligible applicants get within the first year.}  

Here’s an example scenario of family life insurance costs.

• Parents: Andrew (32-year-old) and Mei (30-year-old)
• Children: Two under 5

Policies: Andrew and Mei are buying two individual life insurance policies with a 25-year term and $500,000 in coverage. This ensures that, if either parent passes away, the two children’s living expenses, future education costs, and the home’s mortgage payments would be guaranteed.

Costs: Andrew pays about $28 per month and Mei pays around $20 per month, for a total of roughly $48 per month for $1M in coverage between both parents.

Note that you might expect to pay more for longer term policies and higher coverage amounts. You’ll also pay more if you’re a smoker or have a high-risk profession.

Get the best life insurance policy for your family

Before comparing life insurance options, take time to consider your family's goals, budget and the type of financial protection you want to provide. At a minimum, you’ll need to answer these five important questions: 

• Who should your policy cover? Most family life insurance plans should cover parents, since other family members depend on their income and support for daily living expenses and major financial goals.
• Who will your beneficiaries be? Many people do not know this but minors legally can’t receive the death benefit from a life insurance policy, so think carefully about naming a legal representative or trustee to manage the money in the event of your death. 
• Joint, individual, or combined policies? Joint insurance policies for parents are the cheapest option, but can leave holes in your coverage. In most cases, individual or combined policies deliver the best coverage. 
• How long do you need coverage? If you’re buying life insurance to give your children financial protection, your plan(s) should last until the youngest family member is financially independent. A 20-year term is most common, but longer or shorter terms are available along with lifelong coverage for special circumstances. 
• How much life insurance coverage do you need? Most families need coverage equal to at least 7–10x the primary earner’s annual salary, but you can conduct a quick and thorough needs assessment using PolicyMe’s free online life insurance calculator. 

“A lot of people come into the conversation with misconceptions about life insurance. Some expect a one-size-fits-all family policy, but in Canada, coverage can be built through a mix of individual and joint policies depending on your needs.” — Christelle Arouko, Life Insurance Advisor

For maximum flexibility, affordability, and protection, PolicyMe recommends purchasing separate life insurance policies for every adult in your family. To help you out, we’ve rounded up the top three choices for a 25-year term life insurance policy with $400,000 in coverage for men and women. 

A 25-year term is long enough to cover most mortgages and the transition from childhood to early adulthood. If one parent passes, a $400,000 payout can cover half the average cost of both; if both parents pass, the combined payout of $800,000 can provide a comfortable life for their child.
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The best family term life insurance for women

^{* For each product, we calculated the average monthly premiums for a female non-smoker between 30-44. The results show the approximate cost of a 25-year term life insurance policy with $400,000 in coverage.}

The best family term life insurance for men

^{* For each product, we calculated the average monthly premiums for a male non-smoker between 30-44. The results show the approximate cost of a 25-year term life insurance policy with $400,000 in coverage.} 

^{* We compared each product's yearly costs to the average cost of similar products for the same type of applicant. This figure shows the approximate price difference for a male non-smoker between 30-44 shopping for a 25-year term life insurance policy with $400,000 in coverage.} 

The best life insurance for children

In general, only parents need life insurance to protect their children, because life insurance provides a payout when the insured dies. Because children don’t have dependents, they should function as life insurance beneficiaries, but don’t need a policy of their own. In fact, most term life insurance policies have a minimum policyholder age of 18. 

That said, many life insurance companies offer child term coverage as an add-on to a parent’s life insurance policy, either as an optional rider or as a built-in policy benefit. All PolicyMe life insurance policies include $10,000 of complimentary child coverage, offering a tax-free lump sum payout in the event of the death of any of the insured’s children between the ages of 6 months and 18 years.

Some life insurance companies offer child term coverage as an optional rider for an additional cost. If it's available, consider whether the added coverage fits your family's needs and budget before adding it to your policy.

According to a recent PolicyMe report, women were more than twice as likely as men to name their children as beneficiaries. If you're raising children with a partner or co-parent, it's a good idea to discuss your life insurance coverage and beneficiary choices together to help ensure your family's financial goals are aligned.
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Whole life insurance for children

The most common type of life insurance purchased as a standalone policy for children is whole life insurance, which offers fixed lifelong premiums with a cash value component that grows over time. It’s often seen as a way to invest in a child’s future by locking in low rates and building value that the child can access in adulthood.

Does every family need life insurance? 

While some Canadians do not need life insurance, if you have a family with one or more family members that are financially dependent on you, you likely need life insurance. 

Life insurance exists to protect your loved ones against the financial consequences that could follow your death. 

Ask yourself a few questions before choosing a policy

How much income does my family rely on me for? Does my partner need more or less coverage? What term length fits my mortgage or my children’s growth to independence?

Family life insurance may be a good idea if: 

• Anyone depends on your income (children, partners, parents, siblings, or other family members)
• You have major financial responsibilities (mortgage, student loan debt, or education costs) that would become a burden to your family or impossible to achieve if you died 
• Your family could not afford to cover final expenses such as medical bills and funeral costs

Family life insurance may not be ideal if:

• You have no major debts
• You’re single
• You have no children or dependents

Families and life insurance go hand in hand. It’s up to you to decide what life insurance looks like for your family. For instance, you might be more concerned about whether life insurance is haram or halal or you might be a cancer survivor with questions about coverage options.

“When two people commit to building a life together, whether that means marriage, buying a home, or starting a family, the focus is rightly on hopes and dreams. But true commitment also includes planning for the unexpected. Life insurance is not about being pessimistic; it’s about being responsible, loving, and forward-thinking. You're not planning for death; you're planning for life to keep going for the one you love.” — Ivana Govedarica, Life Insurance Advisor

FAQs: Best family life insurance