How to Find Cheap and Affordable Life Insurance
Looking for the most cost efficient way to secure your loved ones financial stability in case you die? Read more to learn about finding the cheapest life insurance available to you. Talk to an advisor today!
14 Minute read
Originally published: November 4, 2022
Updated: November 27 2024
How to Find Cheap and Affordable Life Insurance
Looking for the most cost efficient way to secure your loved ones financial stability in case you die? Read more to learn about finding the cheapest life insurance available to you. Talk to an advisor today!
14 Minute read
Originally published: November 4, 2022
Updated: November 27, 2024
When shopping for your own life insurance plan, cost is always top of mind – but how do you find the cheapest life insurance for you, while still getting enough coverage for what you’re looking for?
We know it can be hard with all the different types of life insurance policies and companies out there. So to figure out how to find the coverage you need at the best price, you need to understand the types of life insurance policies, the average cost of life insurance, and how much coverage you need. This blog will cover all of those questions, and help you find what the cheapest life insurance looks like for you.
In this Article:
The Process of Getting Life Insurance
When applying for life insurance, it is important to think about your health, age, and lifestyle because these factors will determine if you are approved, rated, or denied a policy. You should note that each company has their own guidelines that they follow for underwriting and approving applications. For example, one company may deny you entirely or give you a higher premium for having diabetes, while another company could still instantly approve you at the standard rate.
The company decides who they want to do business with – so if the company thinks you are deemed “high risk,” that means the company thinks there is a higher chance you die before a certain age. The higher risk you are, the higher chances you have of being denied life insurance, and the higher the cost of your policy will be as well.
Below is a list of factors that affect the application process in certain ways:
1. Age
The older you are, the more your life insurance policy will increase in cost. For example, see below to see an example in the change for life insurance cost as the age increases.
2. Gender
Due to females having a higher life expectancy, life insurance companies typically give lower prices for women applying for life insurance policies.
For example, see the table below for a comparison of quotes from many different companies between female and male smokers and non-smokers for $500,000 in coverage for a 10-year term life insurance policy.
3. Criminal or driving record
Having any kind of criminal or driving record can have an impact on the application process of your life insurance policy, including the cost of a life insurance policy. Read our blogs about getting life insurance with a DUI charge or with a criminal record.
4. Health and medical condition
If you have any current or past severe medical conditions, your premium (the cost) of your life insurance policy will increase due to the increased risk associated with insuring you. If the company deems this risk too high with your medical and health history, they may deny your application instead of just increasing the premium costs.
The cost of your premiums can also increase due to smoking status. For example, if you are a smoker looking for life insurance, then your premium can cost more than double than if you were a non-smoker because of the risk the life insurance considers you to have towards your health.
5. Risky hobbies
Participating in what’s considered to be a “risky” hobby can also affect the cost or application process for a life insurance policy. If you participate in these activities listed below in the photo, then a life insurance policy might not cover you in case you die due to an accident involving you participating in a non-covered hobby. This means that in the event that you pass from participating in this hobby, there will be no death benefit. Alternatively, it may cover you but will increase the cost of your premiums.
Below is a list of activities that insurance companies consider as hazardous:
- Snow sports (skiing, snowboarding, snowmobiling)
- Skydiving, Scuba diving, Climbing
- Motor vehicle racing
6. Dangerous job
A life insurance company’s underwriting will also consider the kind of job or occupation you have. They specifically want to know if the type of job you have could potentially increase the risk you have of having any fatal incidents. See the photo below for a list of the top 6 most dangerous types of occupations.
In the case that you are denied life insurance due to one of these factors, it just means you need to find the right type of life insurance, with the right company – which will usually end up being a simplified, guaranteed or no medical life insurance policy.
Being denied life insurance can be stressful – if you want to learn more about your options, feel free to read our blog about reasons you were denied life insurance, or contact us to speak with a licensed advisor.
Types and Cost of Life Insurance
There are multiple types of life insurance policies that you may consider for your needs. Each type of life insurance will cost different and have different underwriting requirements. For example, permanent insurance is more expensive than term life insurance, and simplified life insurance will ask less health/medical questions than a traditionally fully underwritten policy.
The three main types of life insurance include: traditional life insurance (also known as fully underwritten), simplified life insurance, and guaranteed issue or no medical life insurance. Below is a table generally comparing the following life insurance types: fully underwritten, simplified issue, and guaranteed issue. For more details on the types of life insurance read our Guide to Life Insurance Terms and Product Types.
Traditional life insurance tends to be cheaper compared to the other types of life insurance, but will be most likely to deny you based on the risk from the information required, such as your: age, gender, risky hobbies or job, general wellness and medical conditions, or your criminal or driving record. Traditional life insurance can come in the form of either term life insurance or permanent life insurance.
- Term Life Insurance: Usually the cheaper one, lasts a certain period of time between 5 and 40 years.
- Permanent Life insurance: Also known as whole life insurance, provides a growing cash-value investment vehicle, and will last your whole life (provided that you pay the premiums).
Permanent life insurance can offer cash value over time, while term life insurance can offer the best prices, and highest coverage amounts depending on factors of your life.
Simplified and guaranteed issue life insurance policies are special because they do not require a medical examination (ie. a nurse visit for fluids). A medical examination is used to determine your physical wellbeing and is used during the application process to determine your risk of dying before a certain age.
While simplified life insurance may ask some medical questions, guaranteed life insurance has nothing medical related required in the application process. Since no medical exam and possibly no medical questions are asked, your risk is assumed to be higher because they do not know the state of your health and wellbeing – therefore, simplified and guaranteed or no medical life insurance is more expensive than traditional.
How Much Life Insurance Coverage Do You Need?
Before you apply for any insurance, it’s important to figure out the coverage amount you need. The coverage amount is only based on you and your life – so ask yourself, “If I were to pass away now or in the future, would there be any loved ones or business that you would leave financially burdened?”
Financial burdens may include:
- how would your funeral expenses be paid,
- any business expenses, or debts, such as mortgage debt, and educational debt,
- or any other kind of financial obligations you or your family have be paid, especially if your income is important for your family’s financial stability
Life insurance is meant for you if you have things that need to be paid in case you pass away, especially if it is to ease others from dealing with these costs.
Frequently Asked Questions (FAQs) about Life Insurance
There are so many reasons for you to get life insurance, the main being that it will protect your loved ones from any financial burdens in the event of your death, you becoming critically ill or becoming disabled. Luckily, life insurance in Canada has great rates and unique plans that can fit your lifestyle and plans that are affordable as well. Another reason to get life insurance is the fact that it can have great riders such as critical illness riders, and disability riders. These riders are important to have because life is unexpected and it is best to be protected in any event.
Term life is designed to cover you for a specified period (say 10, 15 or 20 years) and then end. Because the number of years it covers is limited, it generally costs less than whole life policies. But term life policies typically don’t build cash value. So, you can’t cash out term life insurance.
A smoker is someone who has used any of these products in the last 12 months:
- Any tobacco products (cigarettes, nicotine base products)
- E-cigarettes, vaping device
- Marijuana (over a certain limit)
*An occasional cigar is often defined as one large cigar per week with negative cotinine results on urine tests.
Not always, you should only worry about if you have enough coverage with a cheap life insurance policy. Also make sure your policy suits your lifestyle, meaning the policy should cover your occupation and activities you do that the life insurance company deems risky, like snowboarding or working as a crane operator.
There are a handful of things to consider when you purchase life insurance, this list includes most of the important factors to consider when purchasing life insurance:
- Life insurance term
- Life insurance benefits, or additional riders
- Health conditions which are pre-existing or you are susceptible to based on family medical history
- Smoking status (smoker or non-smoker)
- Your age
- Children’s or dependent’s age
- Spouse’s age
- Occupation risks
- Existing loans and mortgages
Your Content Goes Here
Not necessarily, the cost of life insurance can depend on many different things, and what it covers. Your premiums may just be cheaper if you are in good health, not because your coverage is less than what you need.
First, it is important to understand why you were denied life insurance, then you are able to access your next steps, such as: do you look for a different type of insurance plan or could you need to apply to a different company? If you are looking for a deeper understanding of reasons why you could be denied life insurance, check out our blog about 6 Reasons Why You Were Denied Life Insurance.
The best life insurance company can vary depending on your own needs. Some of the best life insurance companies in Canada can be seen in the photo below, each with a rating based on their service and performance. Read our blog about the best life insurance companies in Canada to get a deeper understanding on how these companies stand out compared to others.
What is the Cheapest Life Insurance For You?
The cheapest, most cost effective price for a life insurance policy depends on several things in your life, such as your health and the overall amount of coverage you need. If you opt for a simplified policy, the coverage limits tend to be lower than traditional fully underwritten policies. Finding the most cost effective policy for yourself is a challenging balance between all these factors of your own personal circumstances, and what’s available in the market, but it’s definitely not impossible. The best way to navigate and calculate all these factors is to work with a life insurance advisor who can help guide you through all the options, and which option is best life insurance for yourself.
At Protect Your Wealth, we work with and compare quotes and policies from the best life insurance companies in Canada to help find the perfect solution for your needs. We’ve been providing expert life insurance solutions since 2007, including no medical life insurance, critical illness insurance, and permanent life insurance, to build the best package to give you the protection you need.
We’re proudly based out of Hamilton, and service clients anywhere in Ontario, Manitoba, Alberta, and British Columbia, including areas such as Toronto, Winnipeg, Calgary, and Victoria. Contact Protect Your Wealth or call us at 1-877-654-6119 to talk to an advisor today!
