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Beginner’s Guide to Life Insurance in Canada
Parvesh Benning | Licensed Life Insurance Broker
The biggest factor is how much coverage and for how long, and the part most buyers never get walked through is what happens between saying yes and holding the policy.
If you die while it’s in force, it pays out the money. That is life insurance in one line. The confusing part is everything around it: how long the price stays level, what the insurer checks before it says yes, and the rules that apply once the policy is yours.
Updated October 19, 2026
Beginner’s Guide to Life Insurance in Canada
Parvesh Benning | Licensed Life Insurance Broker
The biggest factor is how much coverage and for how long, and the part most buyers never get walked through is what happens between saying yes and holding the policy.
If you die while it’s in force, it pays out the money. That is life insurance in one line. The confusing part is everything around it: how long the price stays level, what the insurer checks before it says yes, and the rules that apply once the policy is yours.
Updated October 19, 2026
This is insurance on you. Your house insurance, you might change providers next year; your car insurance, you might find a better rate somewhere else. Life insurance can be moved too, but only by qualifying again at the age and health you have then.
That one difference explains most of this guide. It is why the length of the term matters as much as the amount, and why I compare insurers before an application goes in, not after a decline.
The short version
You pay. Each term reflects how many years your premium stays level. Term 20 means your cost stays the same for 20 years.
You stay covered. Coverage continues while the premiums are paid, up to the expiry age in your contract, or for life on a permanent policy.
They get paid. If you die while covered, the insurer pays a lump sum to the people you named as beneficiaries.
What it costs: a 35-year-old non-smoking woman buying $500,000 of 20-year term starts from $22 per month. A man with the same profile starts from $30 per month. Sample premiums, illustrative only: current carrier rates for a non-smoker in good health at standard rates. Your price depends on age, sex, amount, term, health history and insurer approval. Compare term rates across insurers.
Pick your starting point
Buy it
Your situation
How Does Life Insurance Work in Canada?
You can do a 10-year, a 15-year, a 20-year or a 30-year term, or cover that lasts for life. Either way it works the same: you pay a premium to keep the policy in force, and if you die while it is, the insurer pays the amount you chose as one lump sum to the people you named.
Every policy has three roles. On most personal policies you fill two of them yourself, and a lot of the mistakes I see on files come from mixing them up.
Who is who on a policy
Owner
Signs, pays and makes the changes
Insured
The person whose life is covered
Beneficiary
Receives the money
The usual setup
Owner: you
Insured: you
Beneficiary: your spouse or partner
Young kids at home
Owner: you
Insured: you
Beneficiary: your kids, through a trustee
A parent insuring an adult child
Owner: the parent
Insured: the adult child
Beneficiary: whoever the parent names
Where it goes wrong in real files
- A will lawyer’s paperwork moved a couple’s death benefits to their estate by mistake. A named beneficiary generally keeps the payout out of the estate, which is why I recheck the beneficiary against the will after any estate work.
- Young kids named with no trustee. The way I explain it: a trustee is just there to essentially manage the trust account, and there’s not much that typically happens. Rules for minors vary by province, so have an estate lawyer confirm yours, and see how to name beneficiaries.
You are approved the day that you’re approved. If your health changes after that, it doesn’t void the policy, as long as you answered the application honestly. The first two years do come with extra rules, covered in the next section.
Locked in once the policy is in force
- The premium on a level term policy, for the whole term
- Your cover, if your health changes after approval
Yours to change
- Cancel it, from day one
- Lower the amount
- Raise the amount, but only by qualifying again, usually with a second policy
- Change your beneficiaries, unless you named one irrevocably
“Ultimately, we want you to pay that for thirty years, because that means there is no claim made. You’re alive and well.”
My answer when a first-time buyer asks whether term premiums are wasted
A standard term policy has no cash value, so outliving it pays nothing back. Policies that return money do exist and they cost more, so read how money-back life insurance works before paying extra for it.
What Does Life Insurance Cover, and What Won’t It Pay?
Life insurance pays out for death from almost any cause, illness or accident, once the policy is in force. When a claim isn’t paid, the reason is rarely how the person died. It’s usually the application: something left off, or a material question answered wrong in the first two years.
Paid
- Death from an illness of any kind
- Death from an accident
Reviewable in the first two years
- Any claim. The insurer can look back at the application and void the policy over a material misstatement, even an honest one
- Common triggers: smoking or a risky hobby left off the application
- Suicide, which is excluded for this period
Can be raised at any time
- Fraud on the application
- A change in your health or insurability between applying and delivery (Ontario ruling below)
Not what it pays for
- Anything while you’re alive, like illness or lost income. That’s critical illness or disability cover
If something did happen, they’re gonna go back through everything. That’s what I tell people who ask whether a booked test or a pending appointment really has to be disclosed when the application asks. Two recent files show why it does.
Health changes after you apply count too. “Between point of application and actual approval, if there is any change in medication or health history, we must disclose additional information.” I’ve written that to clients for years, and in July 2026 Ontario’s Court of Appeal showed the window can run right up to delivery.
Trebell v. Canada Life, Court of Appeal for Ontario, July 2026
“Where a change in insurability occurs between application and policy delivery, no contract forms.”
The window
From the day you apply to the day the policy is delivered
The two-year limit
Doesn’t apply to this situation, so an insurer can raise it at any time
What to do
Report any change in your health or insurability, such as a new test, diagnosis or medication, before you sign the delivery receipt
The court decided how Ontario’s Insurance Act should be read. It did not make a final finding that this applicant’s insurability had actually changed; that question was left for further proceedings. Read the Law Times report on the decision.
Telling the insurer more doesn’t automatically mean paying more. It means the price you’re quoted is the one that holds up at claim time, and a broker can check how something is likely to be treated before an application goes in. See the most common reasons claims get denied and how pre-existing conditions are handled.
Term vs Permanent Life Insurance: What You’re Actually Buying
Basically, term insurance, you can think of it as terminating insurance. There’s a drop dead date. Permanent insurance has no end date, it covers you for life, and that promise is why the same amount of cover can cost around ten times as much.
With a permanent policy, you’re going to get significantly less insurance for the same amount of premium. Most people do term insurance and it’s completely, completely fine. I wouldn’t necessarily jump to permanent right off the bat; it’s something that can be evaluated down the line.
Cash value against what went in, from a real universal life illustration
Man, 39, non-smoker, $1,956 a year, projected at an assumed 5.5% average return. Projections, not guarantees.
Year 1
0%
$0 back on $1,956 paid
Year 5
70%
$6,845 on $9,780 paid
Year 10
106%
$20,645 on $19,560 paid
Year 20
147%
$57,654 on $39,120 paid
“These are all still based on an assumed rate of return. If the rate of return doesn’t keep up, then you will have to continue paying longer.” In the same illustration’s lower-return scenario, the policy runs out of funds in year 50 unless more is deposited.
Most term policies don’t simply vanish on the last day. After the term, there’s usually a guaranteed renewal. The thing is that almost nobody does it because it’s typically insane, and one real contract shows why.
Level for 20 years, then this
A real contract: $250,000 of 20-year term, man aged 49. Annual premiums as printed in the policy.
Years 1 to 20
$713 a year
Year 21
$5,080 (7.1x)
Year 25
$8,020
Year 30
$13,850
Year 35
$29,465
Year 37 on
$37,750 (53x)
One insurer’s schedule, example only; others differ. Your own contract governs, and its renewal page shows your schedule and the age when cover finally ends. Here’s what to do when a term expires.
When the term ends, you have four ways out
Renew
If your contract is renewable: guaranteed, no medical, at prices like the ones above, up to the expiry age it sets
Not into another term, but into that insurer’s permanent insurance, without a medical, before a deadline in the contract (often age 70 to 75). Converting part of it is an option.
Shop again
A new application, more than likely at a higher rate because you’re older
Let it end
No payout and no refund
Read the renewal and conversion pages the day your policy arrives; the deadline is printed there, not on the quote. For the full menu, see the types of life insurance and how permanent life insurance works, or compare permanent life insurance quotes if lifelong cover is the goal.
Who Can Buy Life Insurance in Canada? Three Ways to Qualify
There’s three tiers of plan: fully underwritten, simplified and guaranteed. Most Canadian adults qualify for at least one of them, and the tier you land in decides how much cover you can get, how quickly, and what it costs.
Each step down asks less, covers less and costs more per dollar of cover
1. Fully underwritten
$1 million and up
Full health questions, usually a phone interview. A nurse visit or blood work depends on age and amount, and many insurers skip it for healthy people under about 50 up to $1 million or more (accelerated underwriting).
Lowest price if you’re healthy. A health issue can mean a rating.
2. Simplified issue
Up to $500,000 to $750,000
A shorter set of health questions. No exam, no blood work. It’s still underwritten, and your answers are binding.
Costs more than fully underwritten for a healthy person. Limits drop at older ages.
3. Guaranteed issue
Usually up to $50,000
No health questions, and $100,000 at some insurers. Death from illness in the first two years returns the premiums paid, sometimes with interest, not the full amount.
Example: Manulife Guaranteed Issue Life, $25,000, man aged 55, $78 per month with that two-year limit. The last resort, not the starting point.
The reason why we don’t jump right to simplified, typically, is it’s more expensive than a fully underwritten. Here’s how much more for one healthy profile, on plans that all pay the full amount from day one.
One healthy profile, four routes
Man, 35, non-smoker, $500,000 of 20-year term. Every plan here pays the full amount from day one.
1x
Fully underwritten, starting price
$30 a month
2.0x
Assumption Life Platinum Protection (simplified)
$59 a month
2.9x
CPP Simplified Elite
$86 a month
3.0x
iA Access Life Immediate Plus
$91 a month
Starting-from monthly premiums based on current carrier rates, illustrative only, subject to underwriting and change. See how the main no-medical plans compare.
There’s an exception, and it matters. When someone’s health would earn a rating, I find the secondary path, simplified insurance, typically makes more sense, because with fully underwritten they add on what’s known as a risk rating, and the end result can cost more than the simplified quote. That’s a call I make before anything is submitted.
Guaranteed issue sits underneath both, for people nothing else will accept. See simplified vs guaranteed issue side by side, or compare no-medical life insurance quotes across insurers.
What Happens After You Apply for Life Insurance (With Real Timelines)
It takes about fifteen, twenty minutes to do the application, and then you get electronic signatures to sign off. From there the insurer either decides on the spot or asks for more, like a nurse visit or a report from your doctor, and that’s what sets your timeline.
Application to decision: three real paths from my files
Solid is the usual minimum, faded is how far it can run. Path A applies to healthy applicants inside an insurer’s no-medical limits.
A. No medical (health questions, no nurse or labs): decision in minutes, policy in hours to 2 days
B. Anonymous prelim first: 15 days from prelim to approval
C. Nurse visit: 2 to 3 weeks
C, plus a doctor’s report: 4 to 8 weeks
Day 0
2 weeks
4 weeks
8 weeks
It’s better to say it’s going to be that long and hope for quicker than saying it’s going to be a few weeks and then it takes longer. That’s why the chart shows ranges, and here’s what each path looked like, step by step, on real files.
A. No medical (health questions, no nurse or labs), healthy applicants in their 30s to 50s
Minute 0
Questions by phone: tobacco, work, income, family history, specialist visits, medications, height and weight, travel, beneficiary
About minute 21
“Yours was approved. I just got a message.”
Same day
Two e-signatures: the insurer’s application and a privacy form
Hours to 2 days
The policy arrives and you sign a delivery receipt, the last step
Not always
“Sometimes it’s a few minutes, sometimes it’s a few days.” One spouse was approved on the call; the other waited days.
B. Prelim first: a 38-year-old woman with one disclosed health history, buying a home
Day 0
Anonymous inquiry to the insurer: “Anonymous prelim, nothing submitted.”
Day 8
Tentative answer: “would likely accept at standard rates subject to full application disclosure”
Day 9
Quotes. She skipped temporary insurance and future-dated the policy to her home purchase
Day 15
Application at 10:15, approved the same morning
C. Nurse visit, and sometimes a doctor’s report (what the nurse visit tests)
Week 0
Application and e-signature. A paramedical company calls to book the nurse
Week 1 to 2
Nurse visit, with results back a few days later
Week 2 to 3
Underwriting review. Many files are decided here
Plus 4 to 6 weeks
“Then they say, well, we need a doctor’s report.” A nudge to the doctor’s office “makes an infinite difference.”
Anyone can be picked for a random medical. It’s sort of like going through airport security, and if one company asks for it, we can choose to close that and go to the next company. If it’s apples to apples or similar cost, I’d rather you go through the easier path than the more difficult.
Same applicant, same cover: the price of skipping blood and urine
With fluids: $72.30 to $72.80 a month at three insurers
No fluids: $73.44 a month
About $1 more
Example only, at the time quoted. Your own quote depends on your age, health and the amount.
Coverage usually starts once the policy is approved, the first premium is taken and the contract’s conditions are met, and you confirm it with that delivery receipt. If you need cover while you wait, temporary insurance can bridge the gap, with its own limits and conditions. For the whole process in order, see how to buy life insurance in 7 steps.
How Much Life Insurance Do You Need, and for How Long?
First things first is determining how much coverage you need, and secondly how long the coverage is for. Size the amount to what your family would lose, meaning your income, your debts and the costs still ahead, and match the term to how long they’d depend on you. Once we’ve looked at your age and health, those are the two levers we adjust to fit your budget.
How much: a worked example
Illustration only, not a recommendation. Swap in your own numbers.
+ Income to replace: $70,000 for 10 years
$700,000
+ Mortgage balance
$350,000
+ Children’s education still ahead
$60,000
− Savings your family would actually use
−$50,000
= Cover to look at
$1,060,000
- Inflation: $70,000 buys less in 10 years, so longer needs lean higher. More on inflation and life insurance.
- Tax: this uses gross income. Your family would be replacing take-home pay, but anything earned by investing the payout can be taxed, so a tax professional can fine-tune it.
- Cover through work: a floor, not the plan, because group life insurance usually ends when the job does.
- The mortgage: personal cover for your mortgage stays yours if you move or refinance.
Then the length. Do the longest term that is affordable for you, because it doesn’t get any cheaper in the future. But at the same time, you want something that is comfortable for you, because you gotta pay for it.
How long: the same $500,000 over different terms
Woman, 35, monthly, starting from. Sample premiums, illustrative only: current carrier rates for a non-smoker in good health at standard rates. Your price depends on age, sex, amount, term, health history and insurer approval.
$14
$20
$22
$32
$41
$54
$71
10 yr
15 yr
20 yr
25 yr
30 yr
35 yr
40 yr
Doubling the term from 10 to 20 years adds about $8 a month. Going from 30 to 40 years adds about $30.
It doesn’t have to all be one or the other, either. The risk is most present in the earlier years rather than as time goes on, so some families take more cover now and let part of it fall away as the mortgage shrinks and the kids grow up.
One way to layer: $500,000 now, $250,000 later
Policy 1: $250,000, 10-year term
Policy 2: $250,000, 15-year term
Policy 2
Years 0 to 10: $500,000
Years 10 to 15: $250,000
Each policy carries its own fee, so layering isn’t automatically cheaper. The point is matching the cover to the years you need it most.
For me, I’d rather you be below your budget than close to the top of it, because a policy you keep paying beats a bigger one you drop. Run your own numbers with the life insurance needs calculator guide, see how to choose a term length, or, if you’re still deciding whether you need it at all, read is life insurance worth it.
How Much Does Life Insurance Cost in Canada, and What Changes the Price?
Insurance is based on, you know, age, smoker status, health status, but then also how much and for how long. For a healthy non-smoker, $500,000 of 20-year term starts from about $20 to $28 a month at age 30, and costs roughly four times that by 50.
$500,000 of 20-year term, monthly, by age, sex and smoking
| Age | Woman | Man | Woman, smokes | Man, smokes |
|---|---|---|---|---|
| 30 | $20 | $28 | $40 | $56 |
| 40 | $32 | $44 | $91 | $126 |
| 50 | $81 | $121 | $212 | $344 |
| 60 | $280 | $398 | $528 | $887 |
Starting from, based on current carrier rates, illustrative only, subject to underwriting and change. Best standard class, so a health rating adds to these. More ages in 20-year term cost by age.
- Age: from 30 to 50, the price roughly quadruples.
- Smoking: about 2 to 3 times the non-smoker price. Nicotine vaping counts as smoking; cannabis rules vary by insurer.
- Sex: women pay about 26% to 33% less at these ages.
If you smoke and plan to quit, I’ll often start shorter. The reason why I didn’t put one client in a 20-year term is that he was going to be paying a smoker rate for 20 years; a shorter term bridges the gap until you can reapply at non-smoker rates.
The smaller levers, and what each one is worth
Your health class
$30 to about $43
Man, 35, $500,000, 20-year term, rated +50% (1.5 times standard). An illustration, not a quote. Better-than-standard rates usually need blood work and $1 million or more, and height and weight limits differ by insurer.
Pricing bands
2x the cover, 1.5x the price
Woman, 35, 20-year term: $250,000 from $15 a month, $500,000 from $22. With 20% less coverage, it’s not 20% cheaper.
Paying yearly
About 7% to 8% less
Than twelve monthly payments, in the contracts I see. One real policy: $712.50 a year, against $769.56 paid monthly.
Backdating to save age
Small, and not free
Most insurers price on your age at your nearest birthday. Backdating keeps the younger age, but you pay for the months already passed. One real file: about $300 up front to save about $75 a year.
For a healthy couple in their early 30s, seven insurers came in within $5 a year of each other. The gap opens when health, build or the wording of a question comes into it, and that’s where comparing insurers before you apply pays off. More profiles in the full guide to life insurance costs in Canada.
Where to Buy Life Insurance: Broker, Bank, Group Plan or Online
You can buy through a bank, a group plan at work, one insurer’s own agents or website, or an independent broker who checks several insurers at once. The height and weight might not fit everywhere, but it only needs to fit one place, not everywhere, and that’s the whole case for comparing before you apply.
Four places that show you one insurer, and one that shows you many
Bank or lender · 1 insurer
Mortgage insurance pays the lender, and the benefit shrinks with the balance. See how it compares.
Group plan at work · 1 insurer
Easy to get and often no medical, but it usually ends when the job does. A floor, not the plan.
One insurer’s agent or website · 1 insurer
One company’s products and one underwriting rulebook. More on buying online.
Plans sold direct to seniors · 1 insurer
Smaller amounts. Some raise premiums over time or limit the payout in the first two years. See how these plans price over time.
Independent broker · close to 20 insurers
Several insurers’ products and underwriting rules, compared before you apply
For the same policy, the premium is the insurer’s price either way, in my experience.
Ultimately the policy is with the company and you, so you or your beneficiary can always go to the insurer directly.
With term, I find that many of the companies try to compete with each other, so it’s a few cents here and there. It becomes down to underwriting: what’s the underwriting process, and convertibility.
My three tests when the prices are close
1
Can the term be extended? Some offer the ability to extend the term longer within the first few years.
2
Is blood work required? At a similar cost, I’d rather you go through the easier path.
3
What can it convert into? The insurer’s permanent product decides what your conversion right is worth later.
“A difference of a dollar or two per month is usually less important than the features built into the contract.”
What a broker adds is the comparison before anything goes in, and the follow-up after: I review every year with clients. Read what a life insurance broker does, or talk to an independent broker about your situation.
After the Policy Arrives: Free Look, Grace Period and the First Two Years
Once the policy arrives, you get at least 10 days to cancel for a full refund, and 20 on some policies. The clock starts after you receive the policy, not after it’s been approved, and a few more rules run through the first two years and every payment after that.
From the day it arrives
Delivery
You sign the delivery receipt. Report any health change before you do.
First 10 days (20 on some)
Free look: cancel for a full refund of what you paid.
Every payment
Miss one and there’s a grace period, usually 31 days.
After 2 years
Ordinary misstatements generally can’t be raised, except fraud, and the suicide exclusion ends. A change in health or insurability before delivery is a separate issue.
Every year
Recheck the amount and beneficiaries after marriage, a new child or a divorce.
Don’t cancel any sort of coverage until this is all sorted out. I like to make sure there are no gaps in coverage, and most of the after-purchase mistakes I see come down to the order things are done in.
Instead of this, do this
“Please do not cancel the bank coverage until the new policies are approved and in force.”
Cancel the old policy, then apply
Keep it until the new one is in force. I’ve seen a client left with no cover when this was skipped.
Replace an older policy because there’s a newer one
Price the new one first. One file came back rated 250% (2.5 times standard), so the old policy stayed the better buy.
Drop the policy when money is tight
Lower the amount instead. Getting it back later means qualifying again.
Let it lapse and reapply later
Pay within the grace period. Reinstating usually means health questions, and in the contracts I see it restarts the two-year clocks.
If a payment has already been missed, here’s what happens when a policy lapses and how to fix it. For the yearly check-up, use these tips for reviewing your policy.
Life Insurance Riders: Which Ones Are Worth Paying For?
Riders are additional benefits on the policy which have an added cost. Most first-time buyers don’t need any of them, and the one with the strongest case is waiver of premium for someone who has no disability cover.
The rider menu, with a verdict on each
Waiver of premium
Worth a look
“If you got disabled, they’ll pay your premium for you.” It matters most if you have no disability insurance, and the definition of disability in the rider is worth reading.
Child term
Usually skip
“Term is adding term insurance for a child.” With healthy kids and no health concerns, there just isn’t the value there. More on life insurance for children.
Accidental death
Usually skip
“If you were to die because of accidental death, they’ll pay an additional amount.” Your family needs the same money whatever the cause.
Return of premium
Usually skip
Gives premiums back if you cancel after a set number of years, or at death on some plans. Terms vary by contract, and the math below is why it rarely earns its cost.
The reason why it’s not a big deal is because it sounds good, but really, what are you actually protecting? One competing quote put a return-of-premium rider on a critical illness policy, a separate product from life insurance, and the math works the same way for any rider like it.
Critical illness example (a separate product from life insurance): a $100,000 policy at $290 a year, with a rider that returns up to 10 years of premiums at death
The most the rider could ever return
$2,900
Pricing $2,900 of extra life cover instead
About $1.10 a year
“It would cost you an extra dollar a year if you wanted the return of premium in there to cover that, because that’s all you’re protecting.”
Read how each rider works before adding one, and treat critical illness as a separate decision: is critical illness insurance worth it.
Declined Before, or a Harder Case? How to Still Get Covered
A decline from one insurer doesn’t decide what the others will do, because each one has its own rules. Most of the time I already know the answer before I even submit anything, and that’s the point: check first, then apply where your situation actually fits.
Find your situation
| Your situation | What insurers look at | Best first move |
|---|---|---|
| Declined before | The reason, and prior-decline questions | Anonymous prelim before reapplying |
| A health condition | Diagnosis, treatment, how stable it is | Compare how each insurer rates it |
| Newcomer or work permit | Status, time in Canada, amount limits | Match insurer residency rules first |
| Criminal record or DUI | Whether they ask “ever” or recent years | Wording you can truthfully answer no |
| Risky job or hobby | How often, how risky, your training | Compare ratings and exclusions |
| Bankruptcy or debt | Some applications ask about bankruptcy | Answer exactly as worded |
MIB (the Medical Information Bureau) holds coded information that member insurers report under its rules. It isn’t a detailed medical record, and it doesn’t record whether an application was approved, declined or rated. General guidance only; every insurer and product has its own rules.
What I’m looking at here, as it reads across every carrier guideline, is how the question is worded. Those questions aren’t worded the same, and the difference can decide an application.
Same history, two ways of asking
Illustrative wording. Real questions vary by insurer and product.
Asked one way
Have you ever been convicted of a criminal offence?
■ Yes □ No
A conviction from 15 years ago is still a yes.
Asked another way
In the last 10 years, have you been convicted of a criminal offence?
□ Yes ■ No
The same history is a truthful no.
“Wherever we have the ability to truthfully answer no, I want to use that.”
Why would I put someone through a full medical, make them wait four to six weeks, and end up with a decline or a heavy rating they’d have to disclose on every future application, when I can just go simplified first? The client is covered with no decline to explain later, and if their health improves, a fully underwritten application can follow.
Life Insurance by Age: Your 20s to Your 70s
The right time to buy is when someone starts depending on your income, and earlier is cheaper because the price is set by your age on the day you qualify. What changes from one decade to the next is the price, the terms on offer, and how much your health history counts.
20s
Life Insurance in Your 20s
Woman, 25, $500,000 of 30-year term: from $25 a month. Wait until 35 and it starts from $41. Sample premiums for a non-smoker in good health at standard rates.
I don’t like replacing policies that were done a long time ago, because they took advantage of the fact that you were much younger then. That’s the case for starting now if anyone depends on you, or soon will. See the reasons to buy in your 20s.
30s
Life Insurance in Your 30s
A couple in their early 30s, $500,000 each, 20-year term: about $29 a month for him and $21 for her. A recent quote, example only, at the time quoted.
Mortgages and kids tend to arrive together, and group cover at work starts to look like enough. It’s a floor. This is also the decade where layering usually fits best. More on life insurance for new parents.
40s
Life Insurance in Your 40s
Man, $500,000 of 20-year term: from $44 a month at 40 and $70 at 45. Sample premiums for a non-smoker in good health at standard rates.
I always look at the height and weight chart as one of the first things I do with a client, and in your 40s that, plus your medications, starts deciding which insurer to use. Five years of waiting costs more here than in any earlier decade, so see the cost of putting it off.
50+
Life Insurance in Your 50s, 60s and 70s
Turning 70 with a $70,000 10-year term: about $120 a month to keep it, or $381 to convert all of it to permanent. A recent file, example only, at the time quoted.
The longest terms drop off the menu, and conversion deadlines, often 70 to 75, start to matter. Converting part of the cover is often the affordable middle path, and guaranteed issue stays the last resort. More in the guides to life insurance for seniors and life insurance after 70.
Whatever the decade, the deciding question is the same: who depends on your income, and for how long? Every figure above is a sample, and your price depends on age, sex, amount, term, health history and insurer approval. Here’s more on the best time to buy life insurance.
Life Insurance Questions First-Time Buyers Ask
These are the questions first-time buyers ask me most, answered short.
Do I get my money back if I don’t die?
Not with standard term insurance. If you outlive the coverage or let it lapse, nothing is paid back, and there is no savings or accumulated value. Return-of-premium options and permanent policies with cash value exist, but they cost more for the same cover.
Is life insurance worth it if I’m young and healthy?
If someone depends on your income, or would be left with a debt you share, yes, and young and healthy is when it costs the least. If nobody depends on you yet, a small amount or none may be fine for now. Some people buy early anyway because the price is set by their age and health on the day they qualify.
How much does life insurance cost in Canada?
For a healthy 30-year-old non-smoker, $500,000 of 20-year term starts from about $20 a month for a woman and $28 for a man. Sample premiums, illustrative only: current carrier rates for a non-smoker in good health at standard rates. Your price depends on age, sex, amount, term, health history and insurer approval.
Will my premium go up every year?
Not on level term: the premium stays the same for the whole term you choose, such as 20 years. It rises sharply if you renew once the term ends. Some permanent plans, like universal life with a yearly renewable cost of insurance, also have a cost that goes up at each anniversary.
Do I need a medical exam?
Not always. It depends on your age, the amount and your answers, and many insurers approve healthy applicants under about 50 for $1 million or more with health questions and a phone interview only. If a nurse visit is needed, the insurer generally pays for the exams it orders.
Am I covered while the insurer decides?
Not automatically. Coverage usually starts once the policy is approved, the first premium is taken and the contract’s conditions are met. Temporary insurance can cover you during underwriting if you pay up front, with its own limits and conditions.
Can I change my coverage later?
You can decline it, and you can reduce it at any time, but you can’t increase without requalifying. Most term policies can also be converted to permanent insurance without a medical before a deadline in the contract, often age 70 to 75.
What happens if I miss a payment?
Most contracts give you a grace period, usually 31 days, to pay before the policy lapses. After that, getting it back usually means a reinstatement application with health questions, so use automatic payments and act the moment one bounces.
Can my children be my beneficiaries?
Yes, but minors can’t receive the money directly, so name a trustee to manage it until they come of age, which is 18 or 19 depending on the province. An estate lawyer can confirm how that works where you live.
What happens if we both die at the same time?
That’s what a contingent beneficiary is for. You can do a primary beneficiary and a contingent beneficiary, meaning if something happened to the primary beneficiary, the contingent takes over. Without one, the money can end up in your estate.
Is the life insurance payout taxed?
Generally no. A named beneficiary usually doesn’t report the death benefit as taxable income, though money paid to an estate can face probate fees, and anything earned by investing the payout is taxable. This is general information, not tax advice; see when life insurance is taxable.
