Best Life Insurance in Canada | Full Guide to Whys and Hows

August 3, 2021 | Editorial Team

Life Insurance

There are many options for life insurance in Canada. The right life insurance company can make sure that you protect your loved ones. Thus, if anything terrible happened to you, your family would be compensated with a death benefit.

A death benefit is a tax-free lump sum that can:

  • replace your income
  • fund your dependants
  • pay for your funeral
  • clear any debts

The two main types of insurance are term life insurance and permanent life insurance.

Term Insurance allows coverage for a period of time, such as years. But, permanent insurance makes sure that you have coverage for life. Apart from these, we also give you an insight into the best home insurances in Canada.

The cost of life insurance is dependent on factors such as:

  • type of coverage
  • age
  • gender
  • health
  • medical conditions
  • smoker or non-smoker
  • term or permanent

To get a quote for life insurance, you can use online platforms such as Sunlife insurance. Fill in an online application and choose the coverage that suits your situation.

Some policy providers include:

If you have dependants, you should apply for life insurance. This will make sure you protect your family and loved ones.

What is Life Insurance?

Life Insurance is coverage that you pay for every month to protect your family financially when you die. It makes sure that any dependants or loved ones are compensated upon your death. The monthly payment is known as a premium. You will have to pay this policy for the full duration of the contract.

To get this insurance you must agree on a contract with an insurance company. A life insurance policy will determine how much tax-free coverage your family will receive. The greater the coverage, the larger the death benefit your loved ones will get.

One usage of the death benefit is to replace income. For example, if you have children, this could fund their education or living costs. Or it can help to pay off family debts. Not to mention expensive funeral costs.

Without life insurance, you are endangering your loved one’s quality of life if you unexpectedly become deceased. Your family will receive no compensation for their loss. Depending on the situation of your family, they may be unable to pay for your funeral costs or have limited resources to survive.

Haiving life insurance is the best way to protect your family.

Different Types of Life Insurance

Term Life Insurance

There is a period of time that you have coverage for; the insurance term life. This type of life insurance coverage is the cheapest. But, renewing coverage after a set amount of time will increase the cost. For example, if you pay life insurance coverage for 10 years. You will then have to renew the insurance to carry on the coverage.

If you are a young Canadian, this might suit you in the short term. Even though there is less coverage, choosing term life insurance may benefit your finances. You will have more money for other expenses such as rent or education.

By paying monthly premium payments, you are reducing risk. Even if something fatal were to happen to you, the policy would provide coverage. So, your family and loved ones would still be compensated.

However, if you do not pay premium coverage, your loved ones are at greater risk. The policy will not provide coverage if you die expectantly. Thus, your family will not get tax-free money.

Within term life insurance, there are other policies such as:

  • Joint insurance
  • Creditor insurance

Joint insurance allows you and your spouse to get the same coverage under one policy.

Creditor insurance allows you to get term life insurance from a lender. The lender must have provided you with a loan before. But, this life insurance only provides coverage for assets. So, it will not entirely protect your family.

Permanent Life Insurance

A life insurance company will charge you a fixed rate, and premiums will not increase. Permanent life insurance is more expensive. But it guarantees coverage and a tax-free sum to dependants. This will get you life coverage.

If you want to leave an inheritance for your family, permanent life insurance makes sense. The policyholder continually pays premiums. A tax-free death benefit will be available.

There are three types of permanent life insurance:

  • Universal life insurance
  • Whole life insurance
  • Term 100

Universal life insurance can be described as a combination of life insurance coverage and investment. The policy can increase or decrease your death benefit depending on the success of your investments.

Whole life insurance includes a cash value. This can become greater as time passes in the policy.

Term 100 makes sure that you have life coverage. You must pay a fixed premium until the age of 100.

Cost of Life Insurance

How much life insurance costs depends on many factors.


The policy that you choose will dictate how much life insurance will cost. Life insurances that provide more coverage will need more expensive premiums.


If you are young, an insurance policy will be cheaper. Older Canadians will pay more, as there is a greater chance of decease.


Men pay more for life insurance coverage compared to women. This is due to women living longer on average.


Your policy will cost more if you have any serious health conditions. The healthier you are, the less you will pay. If you are a smoker, your policy will also cost more. Premiums are higher for unhealthy people as they have a higher chance of early decease.


If you work in a job with more risk of physical harm, your insurance will cost more. For example, taxi drivers may have more expensive insurance. This is because they are at risk of fatal accidents on the road. In contrast, an office worker will have a cheaper policy as it is a low-risk occupation.


Some life insurance companies will ask for information about your lifestyle. If you are an adrenaline junky, your insurance will cost more.

Type of Policy

Permanent life insurance is more expensive than term life. This is because more coverage is included.

How Much Should you Pay for Insurance?

When deciding what policy or insurance company you should choose. You must consider how much coverage will be needed for loved ones.

Term life insurance is a lot cheaper than life insurance permanent. But this is not a safe option if you have children or other dependants. Life insurance permanent is more expensive but coverage for your loved ones is guaranteed. It may be worth paying more money for permanent insurance life.

There are also online calculators on various websites. These can give you a rough estimate of the premium rates you will pay for different policies.

How to Get a Quote for Life Insurance

You can get a quote from any of the life insurance companies below:

Go on the company websites and pick the type of insurance you are after. Next, you must fill in details about how much coverage you need. Not to mention any relevant medical details that may affect your quote. Once you have filled in the online application, you will receive many quotes.

Each company will give you access to a range of different brokers. Compare quotes from each company so you can find the best deal.


This insurance company has a range of options. This includes quotes that can upgrade any existing coverage you have.

RATESDOTCOM shows you insurance quotes based on coverage type. For example, if you are looking for joint insurance for you and your partner. Quotes that relate to this will appear.

You will also be shown the amount of coverage that you can get from different providers. Not to mention the term life of various policies.

One helpful feature on the website is the quote comparison tool. This will show you all the different deals on one page. If you find the ideal policy on that page, you can buy it right away

This company provides more specific options for your insurance life Canada. Within its application, you will enter your medical details and family history.

The platform will then pinpoint a few policies which are most suitable for you. Choose the policy that best meets your needs. Once you have made your choice, an insurance expert will contact you. The expert will help you through the rest of the application.

An insurance expert will confirm all your details so the policy you have chosen definitely suits your situation.

Furthermore, they will set up a medical exam to check your health.


This life insurance company offers many online policies. It is well renowned as it has links with the 20 best insurance policies in Canada.

The Policyadvisor website has a calculation feature that can show you where you need insurance. Making sure you have full coverage.

Furthermore, there is a range of insurance rates that you can compare.

There is even an option to chat with insurance brokers on the website. They can guide you on what insurance to choose.

Policyadvisor is not available in all parts of Canada; at the moment, Ontario, Alberta, and Manitoba are the only places that it services.


If you’re new to insurance, this platform is very intuitive.

PolicyMe offers a free 5-minute check-up. This shows you if you are insured and have the coverage that you need.

For the application, you will only be asked to answer five fields of information:

  • date of birth
  • gender
  • smoker or non-smoker
  • coverage amount
  • length of policy

Once you have filled out these fields, you will see you will receive a quote from PolicyMe.

Policyme makes it an easy process if you are completely new to life insurance.

Who Should Get Life Insurance?

Sometimes life insurance can be included with your employer’s benefit plan. If this is the case, your death benefit might be your salary multiplied a few times. Thus, if you earn a high wage in Canada, you might not need to buy any life insurance. This is because your death benefit will provide enough coverage for your loved ones.

In contrast, if life insurance is not included in your employer’s benefit plan. It would be best to buy life insurance to make sure that you leave something behind for dependants. Term life insurance is a cheap option if you do not earn the highest salary.

Insurance /permanent life can be a great investment if you would like to earn more tax-free money for your family. If you are already earning a good salary at a young age, this could also save you money while you are alive. This is because life insurance gets more expensive as you age. So, you will avoid costly premium payments for permanent life insurance in the future.

One way of finding out whether you should get life insurance is to contact an insurance broker. They will be able to break down your current situation. While offering advice on how you can maximize your death benefit and save money in the present.

But make sure that you also do your own research. There are many policies available, and you must choose the right one. The life insurance you buy will determine the amount of money you leave behind.

The question is not – who should get life insurance? It’s more – when should you get life insurance? Most of you have loved ones you will want to leave a death benefit for. Or, possibly, you will want to use insurance policies as an investment vehicle.


How Much Life Insurance Coverage Should I Get?

You should get enough to cover all important finances in the event of your death. Such as:

  • Funeral costs
  • Outstanding debts
  • Mortgage
  • Children’s education

Get in contact with a life insurance expert to receive a full breakdown of how much coverage you may need. They will be able to recommend policies that cover all your important finances.

Or you can use an online calculator and fill in all your needs. This can give you a rough estimate of the premiums you need to pay per month.

How do I Know if Term Life Insurance is Suitable for Me?

Term life is the cheapest kind of insurance, and it is the best option if you are struggling financially.

This type of insurance can make sure that you have coverage. While not causing you to go into more debt or affect your quality of living.

Furthermore, you can upgrade your term life insurance to permanent in the future. Thus, term life insurance may also be suitable if you don’t want to make a huge initial investment. Or simply don’t have the money to afford it.

On a graver note, if you have some form of a terminal disease you can purchase term life insurance to cover the years when you still are alive.

Will Life Insurance Cover my Funeral Costs?

This depends on how much coverage you have paid for and what you want your death benefit used for.

If you purchase life insurance and pay monthly premiums, you should have enough coverage for your funeral. However, you must discuss the specifics of your life insurance before signing up. You should mention in your contract that you want your funeral to be covered.

Notwithstanding, it is possible for your insurance not to cover your funeral costs. If you tell your dependants to not use the death benefit for your funeral. Or, if you specify this in your insurance contract.

When Should I Get Life Insurance?

If you are a young and single Canadian, it might not be the best time to purchase life insurance. But as you get older, you should put more thought into it.

One of the best times to get life insurance is when you are financially stable. Even if you are single your whole life, getting life insurance at the right time can further your wealth.

Naturally, having a family is another good time to get life insurance. It will give you peace of mind that your dependants will be left with something. Regardless of what happens to you.

The Bottom Line

In Canada, life insurance is offered by many companies.

You must get life insurance if you want to leave money for your loved ones.

One way of finding out what life insurance suits you are to search online. You are very likely to find a policy that meets your needs.

Do not wait too long to get life insurance as premiums will increase as you get older.

You should look at life insurance as an investment in the future.