Life Insurance for Members of the Canadian Armed Forces

Whether choosing to purchase life insurance specifically designed for Canadians in the Armed Forces or deciding to purchase life insurance through a traditional provider, there are many options available to members of the Canadian Armed Forces. If you are interested in a life insurance policy to protect your family and your assets but aren’t sure what is available to you as a member of the Canadian Armed Forces, keep reading to find out.

In this article:

• Why get life insurance if you work for the Canadian Armed Forces
• Important Considerations
• Types of Life Insurance
  • Term Life Insurance
  • Permanent Life Insurance
  • Simplified Issue Life Insurance
• Life Insurance Providers
• Case Studies
• Frequently Asked Question About Life Insurance for Canadians in the Armed Forces

Why get life insurance if you work for the Canadian Armed Forces

There are many reasons Canadians might benefit from a life insurance policy and it’s a great option for those looking to protect their loved ones in the event of an unexpected death. Canadians who own a business, have loans or debts such as a mortgage or car payments, are the breadwinner of their family, or have children or dependents that rely on their income can all benefit from a life insurance policy. Canadians in the Armed Forces can benefit from a life insurance policy for the same reason as other Canadians, as it can provide a payout to any chosen beneficiaries which can help cover financial instability that occurs as a result of an unexpected death.

While members of the Canadian Armed Forces (CAF) can take advantage of life insurance coverage through Canadian Forces Morale and Welfare Services, it is not the only option available. The insurance offered specifically for members of the CAF can be beneficial considering its low rates and specialization in serving members of the CAF community, however, looking at coverage outside of the organization may provide additional coverage that is better suited for different financial needs and goals. For example, opting to get coverage outside of the Canadian Forces Morale and Welfare Services for a universal or whole life insurance policy is an option for those interested in growing their wealth. Other reasons could include a need for more maximum coverage than is offered through the policies made for CAF members, or a desire to get a joint policy through a spouse’s insurer.

Important Considerations

• For traditionally underwritten policies you will likely have to share your exact occupation (ex. pilot, message clerk, etc.) and division of the military (Navy, Airforce, etc.) so that the life insurance provider will be able to determine any occupational hazards. 
• You will need to list any travel for previous or future deployments, especially if it includes travel to restricted countries.
• Retired CAF members or members who have a sedentary job within the military typically have the same application process as a civilian with standard premium rates.
• CAF members that are actively under orders to deploy and hold a hazardous occupation within the armed forces, may not qualify for traditionally underwritten policies and may experience higher premium rates.
• All members of the Canadian Armed Forces, regardless of occupational hazards can qualify for Simplified Issue life insurance through certain providers as these policies are available to all healthy Canadians.

Types of Life Insurance

When picking a traditional life insurance policy there are a few different types of policies to choose from. The main types of life insurance are term life insurance, which offers a smaller time commitment and more affordable rates, and permanent life insurance which is a larger commitment but can also generate cash value depending on the plan. CAF members who are worried about qualifying for traditionally underwritten policies may be more interested in Simplified Issue life insurance, which doesn’t require a medical exam but does require applicants to answer certain health-related questions as part of their application. What type of insurance is right for you will depend on your financial goals and individual needs, so be careful to consider all of your options carefully.

Term Life Insurance

Term Life Insurance is a popular option for Canadians looking for a short term and affordable life insurance option. This is a type of insurance that provides coverage for a specified term, typically 10, 20, or 30 years. These plans typically offer lower premium rates and are more simplified than permanent policies. Whether a member of the CAF is able to qualify for a traditionally underwritten term life insurance policy will be determined on a case by case basis and will vary based on factors such as occupational hazards, an applicants specific role in the military, whether the applicant is under orders to deploy, if the applicant has previously deployed, and if so where.

Permanent Life Insurance

Permanent Life Insurance is a type of policy that lasts your entire life, rather than for a fixed term. Because of this, these types of policies tend to have higher premiums. Permanent life insurance policies are typically purchased by applicants who have financial dependents, want to help their families cover the cost of their final expenses and funeral costs, or want to build a cash value within the policy as an investment.

For CAF members who are interested in building their wealth, there are two main types of permanent life insurance policies that offer an investment option: participating whole life and universal life insurance. In participating whole life insurance policies, the insurance company chooses what to invest the cash value portion of the policy in and offers the potential for the cash value to grow or for dividends to be paid to the policyholder. For universal life insurance, the policyholder has more control over how much cash value is invested where and has the potential to grow the cash value through investments.

For CAF members more interested in a simple permanent life insurance policy with no investment option, a non-participating whole life insurance or Term 100 life insurance policy may be a better fit. Non-participating whole life insurance means that the insurance company does not offer the policyholder dividends earned off of the interest accrued from the policy, however premium rates tend to be lower to account for these gains. Term 100 insurance is the most popular choice for permanent life insurance as it is very similar to term insurance with no cash value or investment choices while still offering lifetime coverage as a permanent policy. Similar to term insurance, permanent insurance policies that are traditionally underwritten will assess applicants on a case by case basis.

Simplified Issue Life Insurance

Some insurers offer Simplified Issue life insurance which can be written either as a term insurance or permanent insurance policy depending on the provider. This type of policy does not require a medical exam but has higher premiums to account for the increased risk to the insurer. Typically, these types of policy will require applicants to answer a series of health-related questions before approval. Simplified Issue life insurance typically has a faster approval time and is a great choice for CAF members who are worried they would be denied from a traditional life insurance policy.

Life Insurance Providers

There are many great life insurance providers in Canada which can make figuring out the right one a difficult task. Retired CAF members and active armed forces members in a sedentary job will likely be able to select a life insurance provider based on their needs using the same criteria as a civilian. However, other members of the CAF might qualify for fewer policies if there is increased risk to the insurer. Despite increased risks that may factor into policy underwriting and qualification, many Canadian insurance providers are happy to work with members of the armed forces. Here are some examples of Canadian life insurance providers who offer coverage to Canadians who are members of the Armed Forces.

Assumption Life

• Typically members of the CAF who are not currently deployed and have not been deployed more than once previously qualify for their traditional policies with no difference in underwriting.
• This insurer recommends CAF members on active deployment apply for Simplified Issue life insurance through their Platinum Protection plan. This plan doesn’t ask for the applicant’s occupation or information about deployments and provides immediate coverage. This plan can either be purchased as a permanent whole life insurance plan or as a term policy with the option to convert to permanent life insurance if desired.

Desjardins Group

• Members of the CAF in a sedentary job as well as members who are not currently deployed, and have not been deployed more than once previously, can qualify for Desjardins’ policies depending on their current health as well as other factors much like a civilian.
  CAF personnel with hazardous occupations who are not currently deployed may also qualify but may have to pay higher premiums due to increased risk to the insurer.
• Offers universal and participating whole life insurance policies, meaning that interested applicants can use their policy as a way to grow their wealth using the cash value in the policy.

Bank of Montreal (BMO)

• This insurer requires CAF members to provide information on which division they are in (Airforce, Navy, etc.), their responsibilities and duties, as well as the amount of time the applicant has been in the armed forces.
• BMO also requires applicants to indicate whether they have a sedentary job or if they are retired or active personnel.
• You will have to provide information on how many times you have been deployed as well as the duration, location, and your responsibilities and duties while deployed.

Sunlife Financial

• This insurer underwrites military personnel the same as civilians but will consider the exact role of the applicant, travel to restricted countries, as well as occupational hazards when considering applicants from the armed forces.

Canada Protection Plan (CPP)

• CPP recommends CAF applicants apply for their Simplified Elite life insurance as it doesn’t require information about the applicant’s occupation and has no deferral, meaning a basic death benefit would still be paid even if a death occurred during active duty with the potential for a full death benefit within certain conditions.

Empire Life

• This insurer provides life insurance to CAF members but does require information on the applicant’s occupation within the armed forces as well as information on any past or future deployments including travel locations and responsibilities.

Case Studies

Which policy is the best for each member of the CAF will vary depending on a variety of factors. Here are some case studies that can help demonstrate different circumstances in which a member of the CAF might sign up for a life insurance policy through a traditional insurance provider.

Case Study #1

John is a member of the Regular Force and is not currently deployed. He and his wife Amber recently gave birth to their first child together, a baby boy. Amber would like to transition into being a stay at home mother to take closer care of their new son. In this case, John might want to sign up for a life insurance policy as it would mean that his wife and son will be financially covered if he experienced an unexpected death. He decides a joint life insurance policy that covers both him and his wife would be the best option. This is because Amber currently relies on John’s income and John relies on Amber to care for their son so he can earn that income. John looks into what options are available to him and finds a life insurance provider who offers a joint first-to-die life insurance policy that both him and his wife qualify for. This policy will pay out a death benefit when the first of the policyholders passes away. While he does have to pay a higher premium due to the occupational risks of his career, he still decides this policy is his best choice as it offers additional critical illness insurance which would provide a lump sum payment if John or Amber were to be diagnosed with a serious illness.

Case Study #2

Randy is a 50 year old man who has recently retired from the Canadian Armed Forces and has quite a bit of money saved up. Now that he is retired he wants to pursue his passion of owning his own restaurant. Randy knows that life insurance is beneficial for business owners as an unexpected death could pose a huge risk to his new business and could affect his family and potential business partners negatively. Randy decides to get participating whole life insurance through a traditional life insurance provider. This is because a participating whole life insurance policy would allow him to accumulate a cash value that could grow over time and offer potential dividends without being too complicated or hands on like a universal life insurance policy.

Case Study #3

Sarah is a member of the CAF Regular Forces who recently bought a home with her husband Benjamin. Sarah is worried about the financial burden of home ownership falling solely onto either her or her husband if anything were to happen to either of them so she decides it’s time to sign up for a life insurance policy. She talks things over with her husband and he agrees that they should purchase a life insurance policy. Together they decide to purchase a life insurance policy that will be in effect until they pay off their mortgage. They plan on paying off their mortgage in 20 years so they decide to purchase a 20 year term life insurance policy through a trusted Canadian insurance provider.

Frequently Asked Question (FAQs) About Life Insurance for Canadian Military Personnel

Find a Solution That’s Right for You!

Those in the Canadian Armed Forces (CAF) looking for life insurance have plenty of options available to them. By speaking with an expert insurance broker, members of the CAF can find a life insurance policy that best protects them and their families. At Protect Your Wealth, we work with and compare policies and quotes from the best life insurance providers in Canada to ensure the best solution for you and your needs. We provide expert life insurance solutions, such as no medical life insurance, critical illness insurance, term life insurance, and permanent life insurance to build the best package to give you the protection you need.

You can Contact Protect Your Wealth or call us at 1-877-654-6119 to talk to an expert advisor today! We’re proudly based out of Hamilton, and service clients anywhere in Ontario, British Columbia, and Alberta including areas such as Brampton, Burnaby, and Red Deer.