Guide to Life Insurance for Seniors in Canada

If you’re a senior in Canada over the age of 60 it might be time to start looking into getting life insurance, if you haven’t already. This complete guide will walk you through everything you need to know about purchasing life insurance as a senior in Canada so that you can protect your loved ones, even after you’re gone.

In this article:

• Why Get Life Insurance as a Senior
• Reasons Seniors Purchase Life Insurance
• How Much Life Insurance Coverage Do You Need
• What Type of Insurance is Available for Seniors
  • Term Life Insurance
  • Term 100 Life Insurance
  • Whole Life Insurance
  • Universal Life Insurance
  • Guaranteed and Simplified Issue Life Insurance
• Life Insurance With a Pre-existing Medical Condition
• What Happens if Your Life Insurance Application Gets Denied
• When is Life Insurance for Seniors, Not a Good Choice?
• Life Insurance Rates for Seniors 60 and Over
• Case Study Examples
• Frequently Asked Questions (FAQs) About Life Insurance for Seniors in Canada

Why Get Life Insurance as a Senior

While many of us wish that by the age of 60, we will be debt-free and have enough money to offer to our dependants after we pass, this isn’t always the case. There are many reasons why seniors get life insurance such as to pay off large debts or to support their children and grandchildren with a death benefit payout. By planning in advance, you can ensure you are well-equipped to handle any end-of-life costs.

Reasons Seniors Purchase Life Insurance

Helping dependants such as children and grandchildren

Seniors often invest in life insurance to provide financial security and support for their dependants, including children and grandchildren, even after they’re gone. The death benefit payout from a life insurance policy can alleviate potential financial burdens, such as outstanding debts, funeral expenses, and ongoing living costs. Depending on the coverage amount of the policy, the death benefit payout can also provide additional support to dependants such as funding for education costs and future financial goals. By securing life insurance, seniors can leave behind a legacy of care and support, offering peace of mind knowing their dependents will be financially protected in the event of their passing.

Financial support for surviving spouse

Another reason seniors purchase life insurance is to offer support for a surviving spouse. Married seniors sometimes purchase something called a joint first-to-die life insurance policy. This type of policy offers a death benefit payout once one of the policyholders passes away, ensuring that the surviving spouse can take care of any end-of-life expenses for their partner. This strategic choice can safeguard your partner’s financial well-being in the event of your passing, ensuring they can maintain their standard of living without facing undue financial strain.

Taking care of outstanding debts

Seniors often utilize life insurance as a way to address outstanding debts, including mortgages and other common financial obligations. By purchasing a life insurance policy with enough coverage, the death benefit amount can be used to pay off all or part of whatever debts or personal loans you currently have that may be passed on to your family. By securing life insurance coverage, you can ensure that any debts you may still hold can be settled if you were to pass away, alleviating any potential financial burden on your loved ones.

Offsetting estate taxes on inherited property

Seniors often leverage life insurance as a strategic tool to offset estate taxes on inherited property, such as when passing down a family cottage. When passing down a property to your heirs, estate taxes can cause the estate to become a financial burden for your heirs. By choosing a life insurance policy with enough coverage to offset the expected estate taxes, you can ensure that your property can be passed down without issue so that it can stay in the family for generations to come. By leveraging life insurance as a tool when estate planning, you can safeguard your wealth and pass down your owned property with minimal tax implications for your loved ones.

Covering funeral expenses

Another reason why seniors often opt for life insurance is to cover funeral expenses. Funeral costs can be substantial, including expenses for the service, burial or cremation, casket, memorial, and related arrangements. By securing life insurance with a portion of the death benefit specifically designated for funeral expenses, seniors ensure that their final arrangements can be carried out without placing undue financial strain on their family members. This proactive approach allows seniors to alleviate any financial strain associated with their passing, providing peace of mind for them and their family members.

Charitable donations

Sometimes seniors choose to incorporate charitable donations into their life insurance planning as a way to leave a lasting impact and support causes dear to their hearts. By designating charitable organizations as beneficiaries of their life insurance policies, seniors can ensure that any philanthropic efforts can continue beyond their lifetime. This approach allows seniors to support causes they are passionate about, whether it’s education, healthcare, environmental conservation, or any other charitable endeavor. Moreover, life insurance provides a tax-efficient method for making significant contributions to charity while also potentially providing financial benefits for their estate. By integrating charitable giving into their life insurance strategy, seniors can leave a meaningful legacy that extends far beyond their lifetime.

How Much Life Insurance Do Seniors Need in Canada?

The amount of life insurance you need as a senior depends on your goals — not a one-size-fits-all formula.

Here are the most common reasons Canadian seniors choose life insurance, along with rough coverage guidelines:

Example: A 68-year-old widow with no dependants and no debt may only need $20,000 for final expenses. But a 71-year-old with a dependent spouse and a $200,000 mortgage may need a larger policy for long-term peace of mind.

Not Sure What You Need?

Speaking with a licensed advisor can help you assess your current financial picture — including debts, savings, and any dependants — and match you with the right type and amount of coverage.

Talk to an advisor for a free, personalized quote

What Type of Insurance is Available for Seniors

There are a few different types of life insurance policies that seniors are able to choose from. The options include term life insurance and permanent life insurance which can be further divided into term 100 life insurance, whole life insurance, and universal life insurance, as well as specialized life insurance such as guaranteed and simplified issue life insurance.

What type of insurance is right for you will depend on a variety of factors so it’s important to know what options are available. The types of life insurance you can qualify for as a senior are as follows:

Term Life Insurance

Who it’s for: Canadian seniors between the ages of 60 to 75 who want a simple and affordable plan with flexible term lengths.

Term life insurance covers policyholders for a specified term with term lengths typically falling between 10 to 30 years. This type of insurance is particularly beneficial for seniors who prioritize affordability and flexibility, however, seniors over the age of 75 typically won’t qualify and may need to look for different insurance options. The benefits of this type of policy include:

Term 100 Life Insurance

Who it’s for: Canadian seniors between the ages of 60 to 85 who want lifelong coverage without the need for complicated investment options.

Term 100 life insurance is a type of permanent life insurance that provides coverage for the entire lifetime of the policyholder. This type of insurance can be particularly beneficial for seniors who are interested in a simple life insurance plan with lifelong coverage. Term 100 life insurance offers similar benefits to term life insurance, however, it can be more costly since it provides continuous coverage until the policyholder’s passing. The benefits of this type of policy include:

Whole Life Insurance

Who it’s for: Canadian seniors between the ages of 60 to 85 who want lifelong coverage with guaranteed premiums and cash value accumulation.

Whole life insurance is a type of permanent life insurance that provides coverage for the entire lifetime of the policyholder along with a guaranteed cash value accumulation component. This type of insurance can be particularly beneficial for seniors who prioritize stability, lifelong coverage, and guaranteed benefits in their financial planning. The benefits of this type of policy include:

Universal Life Insurance

Who it’s for: Canadian seniors between the ages of 60 to 85 who want flexible lifetime coverage with potential cash value accumulation.

Universal life insurance is a type of permanent life insurance that offers flexibility in premium payments and death benefits, along with the potential to accumulate cash value over time. This type of insurance is particularly beneficial for seniors who are interested in lifelong coverage with the ability to adjust premiums and coverage amounts to suit their changing needs and financial goals. The benefits of this type of policy include:

Guaranteed and Simplified Issue Life Insurance

Who it’s for: Canadian seniors between the ages of 60 to 85 who want accessible life insurance coverage without medical exams or extensive underwriting.

Guaranteed and simplified issue life insurance are life insurance policies designed to provide coverage without the need for a medical exam or extensive health questions. These options can be particularly beneficial for seniors who may have pre-existing medical conditions or who prefer a simplified application process. The benefits of this type of policy include:

Life Insurance With a Pre-existing Medical Condition

Many seniors have pre-existing medical conditions due to their age, but medical conditions can complicate the life insurance process. Traditionally underwritten policies typically require applicants to undergo a medical exam and answer a series of medical questions to determine coverage. Many insurers will charge higher premium rates for those with medical conditions and may even deny an application if they decide the condition is severe enough. Fortunately, even with a pre-existing condition such as a heart condition or Alzheimer’s disease, it is still possible to get life insurance. While it may be more difficult to qualify for a traditionally underwritten policy many insurance providers offer simplified and guaranteed issue life insurance policies.

Simplified issue life insurance does not require a medical exam but does require applicants to answer a simplified list of medical questions in order to qualify for coverage. Guaranteed issue life insurance does not require a medical exam or any medical questions to be answered in order to qualify. Depending on the severity of your health issues, these no-medical life insurance options may be ideal for seniors in Canada with pre-existing health conditions.

What Happens if Your Life Insurance Application Gets Denied

Life insurance applications can be denied for a couple of reasons:

• The applicant intentionally or unintentionally omitted information from their application or included false information.
• The applicant falls outside the set age range requirement for the policy they applied for.
• The applicant applied for more coverage than they are deemed financially able to pay based on annual income, net worth, and credit history.
• Medical exams or answers to medical questionnaires flagged the applicant as ineligible.
• Lifestyle factors such as dangerous occupations, hazardous hobbies, being obese, or smoking.
• Addiction issues such as drug addictions or alcoholism.
• Having a criminal record or issues with your driving history such as a DUI.

If your life insurance application is denied this can make it more difficult to obtain life insurance in the future, so it’s better to be truthful and accurate on your application and to be sure you are applying for a policy you are eligible for.

If your application has been denied, there are three steps you will need to take before trying to apply again:

1. Find out why your application was denied

The very first step you should take after discovering your life insurance application has been denied is to reach out to the insurance provider to determine the reason for the denial. Knowing the reason why your application was denied can provide guidance and insight for your future applications and can help you determine your next steps. If you provided truthful and correct information on your application and you were denied due to health reasons, lifestyle reasons, financial reasons, etc. then you might need to reassess what kind of life insurance you are eligible for and submit an application for a different policy.

2. Discuss your options with a licensed life insurance agent or broker

If your application has been denied for reasons out of your control, you should reach out and discuss your options with a licensed insurance agent or broker. An insurance agent works directly for a specific life insurance provider whereas a life insurance broker represents consumers and can help you determine which policy is best from a variety of life insurance providers.

Life insurance brokers can be hired at no cost to you, instead, they are paid a commission from the life insurance provider you decide to get a policy through. By speaking with an agent or broker you can get expert insight into your specific situation, receive advice on which policies you will likely qualify for, and get help with the application process to decrease the risk of another application denial.

If you are interested in obtaining a life insurance broker you can always contact us online or give us a call at 1-877-654-6119 so that we can help you discover which policies best represent your insurance needs and help prevent any future application denials.

3. Submit a new application for a policy that better represents you

After speaking with an expert life insurance agent or broker you should have a much better understanding of the types of policies that best represent your life insurance needs. With this in mind, you can submit a new application for a policy you are more certain you will qualify for based on your age, medical history, lifestyle factors, and so on.

When is Life Insurance for Seniors, Not a Good Choice?

While life insurance is a valuable financial tool for many, it isn’t the solution for everyone. It’s essential for seniors to carefully evaluate their circumstances, financial objectives, and available options before making decisions about life insurance. Here are some scenarios where life insurance may not be a good choice for certain seniors:

Limited Financial Dependents

If you’re a senior without any financial dependants, life insurance may not be necessary. Life insurance is primarily designed to provide financial support for dependents in the event of the policyholder’s death. If there isn’t anyone relying on your income or financial assistance, it may be advisable to forgo a life insurance policy so you can avoid costly premiums on a potentially unnecessary policy.

Sufficient Savings and Assets

Seniors who have accumulated substantial savings, investments, and assets over their lifetime may find that these resources are enough to provide adequate coverage for end-of-life expenses and their loved ones’ needs. If this is the case for you, additional coverage provided by life insurance may be unnecessary.

High Premiums

Life insurance premiums tend to increase with age, which is especially problematic for older seniors. If the cost of premiums for a policy is disproportionately high compared to the benefits provided by the policy, life insurance may not be advisable. Seniors on fixed incomes or with limited financial resources should carefully evaluate whether potential life insurance premiums will fit within their budget and whether they offer sufficient value in return.

Ill Health or Advanced Age

Seniors who are in poor health or have reached an advanced age may find a lack of available life insurance options. Pre-existing medical conditions and advanced age can increase your risk to insure and can result in higher premiums or denial of coverage. If this is the case for you, alternative financial planning for end-of-life expenses may be worth pursuing as opposed to limited and potentially costly life insurance policies.

Life Insurance Rates for Seniors in Canada

Seniors aged 60-75

Here are monthly term life insurance rates for female and male non-smoking seniors aged 60-75 in Canada for a 10-year term with $100,000 in coverage:

Seniors aged 80-85

For seniors in Canada aged 80-85 who typically are not eligible for term insurance, a universal life insurance plan may be a better fit. Here are monthly life insurance rates for female and male non-smoking seniors aged 80-85 in Canada for universal life insurance with $25,000 in coverage:

Simplified issue life insurance for seniors

For seniors in Canada interested in simplified issue life insurance, here are monthly life insurance rates for female and male non-smoking seniors aged 60-70 in Canada for simplified issue life insurance with $50,000 in coverage:

Case Study Examples

Case study #1: Maria

Maria is a divorced 65-year old woman with three adult children and two grandchildren. She had a pretty successful career before retiring and has a decent amount of savings she frequently offers her children and grandchildren to help provide for them financially. Because of this, she decides to get life insurance so that she will be able to provide for her family even after she’s gone.

First, Maria contacts a life insurance broker who can help her understand her coverage needs as well as what policy options are available to her. After speaking with the broker, she considers the following:

• Based on the financial support she currently provides her children, Maria decides to leave each of her three children $20,000 so she can continue supporting them financially once she’s gone, which comes to a total of $60,000.
• Maria decides she would like to help provide for her grandchildren’s future education, so based on the average tuition costs for Canadian students she determines she would like to set aside $20,000 for each of her grandchildren’s education costs for a total of $40,000.
• Extra financial support, the cost of her funeral, and estate taxes associated with passing ownership of her house to one of her children are all expenses she determines should be covered by the inheritance of her savings among her children and grandchildren.

With all this in mind, she determines she would need $100,000 of life insurance coverage in order to continue supporting her children financially and to help pay for the future education costs of her grandchildren.

Now that she understands her coverage needs, Maria needs to find a policy that is right for her. Maria is a smoker and struggles with obesity so she realizes she will likely have to pay higher premiums for life insurance due to the risk to her health from these two factors. Maria discusses her options with her life insurance broker and determines she would like to apply for simplified issue life insurance as this type of insurance does not require a medical exam and asks limited health-related questions.

After determining her coverage needs, the best type of policy for her, as well as her budget for life insurance premiums Maria’s life insurance broker finds her a deal that meets all of these criteria. Not too long after submitting her application, Maria gets approved and is relieved due to the peace of mind she feels now that she knows her family will be taken care of even after she is gone.

Case Study #2: Roger and Elizabeth

Roger and Elizabeth are a healthy married couple who are both 60 years old with no dependants. They recently purchased a new home together to live in for their retirement years. Because of this, they determine it may be worthwhile to purchase a life insurance policy so that if one of them were to pass away unexpectedly, the other wouldn’t be left to pay off the remaining mortgage alone.

They discuss their options with a financial advisor who helps them consider what type of life insurance they need.

• A joint-first-to-die policy is the best option for them since this type of policy covers both Roger and Elizabeth and provides a death benefit payout to the surviving spouse if one of them were to pass away, ensuring they could still afford the mortgage payments.

To determine the amount of coverage they would need, they consider the following:

• They currently have $400,000 left on their mortgage and anticipate being able to pay it off in 20 years.
• They currently do not have any dependants or other financial obligations.

This means that the best choice for this couple is to get a joint-first-to-die policy with $400,000 of coverage and a term length of 20 years to match the amount and length of their mortgage payments.

👵 Additional Real Life Examples: How Seniors in Canada Got the Right Life Insurance

✅ Case #3: Linda, 72 – No Medical Life Insurance with Final Expense Coverage

Linda is a 72-year-old widow from Calgary who didn’t want her kids to worry about funeral costs. She was on medication for high blood pressure and didn’t want to deal with a medical exam. She got a $25,000 no medical whole life policy from Canada Protection Plan. Her premium is $96/month, and her coverage was approved in just 3 days.

✅ Case #4: Joseph, 67 – Term Life to Cover a Mortgage

Joseph and his wife downsized to a condo but still had 10 years left on their mortgage. At 67, he was still healthy and qualified for a $100,000 10-year term policy from Equitable Life after a basic phone interview. His monthly premium was $68. This gave him peace of mind that his wife wouldn’t be burdened with debt.

✅ Case #5: Barbara, 75 – Guaranteed Issue for Peace of Mind

Barbara, 75, had diabetes and a history of breast cancer. She was declined by two other companies. We helped her apply for a $15,000 guaranteed issue policy with Assumption Life that requires no medical questions. She now pays $123/month and finally has some peace of mind knowing her final expenses are covered.

✅ Case #6: Harold, 64 – Access Life Policy for Coverage Without Hassle

Harold didn’t want to go through the stress of a nurse visit. Even though he’s a healthy non-smoker, he opted for a simplified issue term policy from iA Financial’s Access Life. He secured $150,000 for 15 years at $72/month, all with no medicals — just an online questionnaire and a quick phone call.

Frequently Asked Questions (FAQs) About Life Insurance for Seniors in Canada

Finding the right life insurance for you

There are lots of reasons why life insurance is an essential financial planning tool for seniors in Canada. If you think that you could benefit from a life insurance policy you should work with a financial advisor who understands what options are available to you.

At Protect Your Wealth, we work with and compare policies and quotes from the best life insurance companies in Canada to find the best solution for you and your needs. We’ve been providing expert life insurance solutions since 2007, including no medical life insurance, term life insurance, and permanent life insurance, to build the best package for your financial needs. 

Contact Protect Your Wealth or call us at 1-877-654-6119 to talk to an advisor today! We’re proudly based out of Hamilton, and service clients anywhere in Ontario, Alberta, and British Columbia, including areas such as St. Catharines, Nanaimo, and Lethbridge.