Why Have Life Insurance in Canada

These reasons are extremely important for safeguarding your finances!

19 Minute read

Originally published: October 12, 2022

Why you should have life insurance

Why Have Life Insurance in Canada

These reasons are extremely important for safeguarding your finances!

19 Minute read

Originally published: October 12, 2022

Why you should have life insurance

If you are concerned about protecting your family and your assets, you may ask yourself: “Why You Should Have Life Insurance.” Although life insurance is not for everyone, it might be right for you depending on many different factors.  Life Insurance is a great option for you if you have any financial obligation such as: owning a business, having dependents that can have post-secondary expenses, having debt like car payments, mortgages, personal loans, or wanting to protect your loved ones from financial instability in the case of your death.  And those are only some of the reasons that make life insurance a smart purchase, but this blog will explain all the reasons why you should have life insurance.

What is life insurance? 

A contract for life insurance is made between the policyholder and an insurance company. In exchange for the premiums paid by the policyholder throughout their lifetime, a life insurance policy guarantees that the insurer will pay a certain amount to designated beneficiaries when the insured passes away.

For the contract to be enforceable, the life insurance application must accurately list all of the insured’s past, present, and high-risk activities, as well as medical conditions. This might require an attending physician’s statement (APS) or a medical exam but there are types of life insurance that do not require any medical information. 

Can anyone get life insurance?

Absolutely, everyone can get life insurance and it does not matter what your medical condition is, what your occupation is, or what your lifestyle choices are. There are many life insurance companies in Canada that can provide you with the right life insurance plan that fits you. We have had many customers who have come from several different walks of life and we have provided them with a life insurance plan that is right for them. Check out the blogs that we made which outline how anybody can get life insurance: 

Types of life insurance

When looking for a life insurance policy, it is essential to know the various types of life insurance. There are many different types of life insurance; term life insurance and permanent life insurance are the two most common life insurance options and they are fully underwritten. Other life insurance products exist, such as simplified life insurance and guaranteed life insurance, but they usually cost more than fully underwritten policies.




Cost of Premiums


Medical Underwriting

Full medical history disclosed.

Limited medical questions. May differ by insurance company.

No medical questions asked.

Visit from nurse or paramedical company

Most often yes.

Sometimes substitued with physicians report.

No vist from nurse or paramedical company.

No vist from nurse or paramedical company.

Speed of approval process

Longest process, may take few days to several weeks.

Typically within a few hours to a few days.

Typically within a couple hours to a couple of days.

Maximum amount of coverage

No specified maximum.

Depends on company, age and health history. Can be up to 1M in coverage.

Depends on company and age. Most often between 25K and 50K maximum.

What is Term life insurance?

A type of life insurance known as term life insurance pays out to your beneficiaries if you pass away during the policy’s term. Your term insurance policy’s duration can be specified for Canadians to 5, 10, 15, 20, 25 or 30 years. You will be able to renew your policy after the term has passed up to a certain age, but the premiums will increase each renewal. For example, if you buy a 10-year term life insurance policy and pass away within those ten years, your beneficiaries will get a tax-free payout (also called a death benefit).

What is Permanent life insurance?

Due to the fact that it provides coverage for the rest of your life, permanent life insurance is also known as whole life insurance. Additionally, it gives your beneficiaries a payment that is tax-free after your passing. There are some plans that can build up cash value over time. Typically, the cost of permanent insurance is guaranteed not to increase after the policy is bought. Additionally, you may be able to pay for a brief time and then never again under some permanent insurance plans. Participating life and universal life are two additional permanent life insurance options to take into account. Permanent life insurance is a great option but is on average more expensive than term life insurance.

What is Simplified life insurance?

Term and permanent life insurance policies are both available in simplified life insurance forms. For simplified issue insurance policies, a medical exam is not necessary, but you must respond to some health-related application questions. Premiums are typically more expensive than those for traditional life insurance (permanent and term life insurance) in exchange for no medical examination. Depending on the insurer and whether or not the policy is deferred, different questions are asked. Simplified issue life insurance is a choice for those who want a quicker approval or do not want to undergo a medical exam. It is typically used for term life insurance products. With simplified plans, coverage amounts are lower and monthly premiums are higher.

What is Guaranteed life insurance (no-medical life insurance)?

Both questions and medical exams are not necessary for these plans. People with serious health issues or older people who do not meet the requirements for underwritten or simplified insurance are the target market for guaranteed issue life insurance. Numerous insurers also provide a deferral period of 24 months for guaranteed acceptance life insurance. Guaranteed issue insurance has the highest premium of the three other options because it is also a type of permanent life insurance and typically has a $50,000 maximum coverage limit, though some insurers offer less.

Do I need life insurance?

Getting life insurance is a big decision and it could be exactly what some people need, but it is unnecessary for some people too. To put it simply, not everyone should have life insurance. Even though having life insurance is a good idea, if you don’t have a family, dependents, debts or other financial commitments, a mortgage, or a business, you might not need it. However, most people who do have a family, dependents, debts or a mortgage should really think about getting life insurance because it is one of the most crucial preventative measures to safeguard your loved ones from financial instability in the event of your passing. A life insurance death benefit can be used for a variety of purposes aside from safeguarding your family from financial instability, which is one of its many benefits. In many cases, this money can be kept for daily expenses, living expenses, savings or used for funeral costs, a mortgage payment, or the education of their children.

If you’re unsure whether you should purchase life insurance, try and ask yourself these questions:

Do i need life insurance and why do i need life insurance

Life insurance to protect your loved ones

Life insurance is a great way to protect your loved ones. When considering the burden that a family faces when their loved ones pass, it can be emotionally devastating as well as  financially devastating. There are many expenses that your family might have to take if you pass away without life insurance, consider these expenses: funeral costs & expenses, your unpaid debt (whether it be small credit card balances to large loans), a mortgage, and also think about how much your family relies on your income. 

Your family relying on your income  is the main reason why most people get life insurance, whether you have kids, a spouse, parents you take care of, siblings, or any loved ones that you want to protect from any sort of financial stress. Although money can not change the emotional burden of you passing away, it can help alleviate the financial burden that your family would face if you did not have life insurance. Therefore, simply getting life insurance just to have the peace of mind that your loved ones will not be financially burdened is a great reason to have life insurance coverage. 

Life insurance to pay off debts

Life insurance comes extremely useful when it comes to those final expenses such as funeral expenses and any outstanding medical bills, but how about those expenses such as your debts? Think about your small debts such as your credit card, maybe you have a line of credit or a personal loan, or maybe you have an entire mortgage. These debts are very common amongst most Canadians. Consider this chart about the average debts per province in Canada: 

Average Debt Per Province (not including mortgage)

Now keep in mind that this is just an average and this isn’t considering the mortgage which is the biggest payment of all for most. Nonetheless, if you pass and your family struggles to pay your debts, then this can quickly start to add up, nevermind their own debts! Therefore, part of protecting your loved ones is also paying off your debts so that they do not financially struggle due to your death. 


Talk to an advisor today.

Best Life Insurance Quotes Canada

Life insurance can secure your future goals

Life insurance payouts in most cases can be used by your beneficiaries in the event of your death, but nonetheless this can secure your future goals. If you are someone who wants to have a house or a business one day, or if you have the goal to be debt free, or want to pay off your house, then life insurance can help you make sure that your family can secure that goal. If you pass away, you want to make sure that your family can reap the benefits from  the goals that you have achieved. Even just planning to own a house or a business is a goal that you do not want to jeopardize, thus having life insurance gives you the peace of mind that your family is safe from making your goals go to waste because they will get financially protected in the case of your death. 

Life insurance secures your assets 

Similar to what was mentioned above, your assets such as your estate, which includes all of your personal belongings, and your house, business or any other assets that you have are safe if you have life insurance. Life insurance can help you outline who gets what when you pass because you will have to designate your beneficiaries. You have earned your assets and it is possible that your assets can help your family’s estate. You don’t need these to be lost in the case of your death, therefore life insurance can protect these assets by not falling into the wrong hands after your pass, and also the death benefit will give your beneficiaries the time to properly mourn your death without having to worry about finances. 

Life insurance is available with a medical condition

Life insurance is available to everyone, there are policies out there that can provide you coverage no matter what medical condition you have. There are fully underwritten life insurances like term life insurance and permanent life insurance packages for those with medical conditions, but mostly simplified life insurance and guaranteed life insurance packages  provide better results for those who might struggle to get a fully underwritten life insurance plan. 

There are great plans for people who are suffering from a medical condition or those who are survivors of a medical condition. At Protect Your Wealth,  we have worked with many people who have had various types of medical conditions and have found them great life insurance plans that fit their wants and needs. There are also great riders that can help you get financial protection in the case that you become disabled or become critically ill. If you purchase life insurance and are covered prior to your diagnosis then you do not have to worry about getting a new life insurance policy, nor will your premium increase, instead  you will be required  to disclose your diagnosis to your life insurance company so they are aware of your condition.

Getting a life insurance policy to protect yourself in the case that you do get a medical condition is a great idea. We can’t protect ourselves from the unpredictable but we can make sure that we are prepared in the case that you are diagnosed with a medical condition. Being ill might lead to a loss of income due to not working, medical expenses, recovery expenses, and other daily expenses that will impact your finances, therefore, life insurance can ensure that you can deal with the financial losses and your family can be financially stable even if your medical illness leads to your death.

Life insurance is available for your dangerous occupation

Life insurance for dangerous or hazardous occupations is there for you to protect your assets and your loved ones in case of disability, illness, or death in your line of work. Many Canadians work hard jobs that require them to be in hazardous or dangerous environments. You might be wondering “what do life insurance companies view as dangerous jobs?” Well basically, a hazardous job exposes you to risky dangers that you would not typically have to deal with. Life insurance providers may view those who work in hazardous environments as high-risk clients and charge them higher premiums as a result. Having said that, your insurer may not automatically view you as high-risk just because you work in a hazardous profession. However, if any of the following apply to you, you will be high risk: 

  • Work high off the ground
  • Work underground
  • Work with explosives
  • Are exposed to dangerous chemicals
  • Use or are exposed to firearms
  • Are in the military
  • Travel to dangerous areas for work

Additionally, these are ranked as the most dangerous occupations by life insurance companies:

Nonetheless you can definitely get life insurance if you work these jobs and it is completely possible to get a fully underwritten policy which provides you good coverage at a favourable price. It is strongly recommended that if you are working one of these jobs you should get a life insurance policy. It can be devastating to your family if you lose your life due to your work, so it is best to keep you and your family protected. Check out our blog on: Applying for Life Insurance with a Dangerous Occupation to find out more.

You can definitely get life insurance if you work these jobs and it is completely possible to get a fully underwritten policy which provides you good coverage at a favourable price. It is strongly recommended that if you are working one of these jobs you should get  a life insurance policy. It can be devastating to your family if you lose your life due to your work, so it is best to keep you and your family protected. Check out our blog on: Applying for Life Insurance with a Dangerous Occupation to find out more. 

Life insurance protects you while you enjoy your hazardous hobbies

If you like to live life on the edge and are a thrill seeker, then luckily you still can get life insurance! Getting life insurance for hazardous activities in Canada is totally possible and has very favourable rates if you take the right precautions and are aware of the risks you are taking. Any sport or hobby that carries a high risk of injury can be included on a list of hazardous activities by life insurance companies. Most of the time, those who engage in risky or dangerous recreational activities can obtain life insurance or disability insurance. Hazardous activities come with a lot of risk, which can have a variety of effects on your life insurance. There are some exclusions in life insurance policies that prevent you from receiving a payout if you become disabled as a result of an accident while engaging in a high-risk activity. Or additionally, there are exclusions, such as not paying out insurance benefits to your beneficiaries if you pass away while engaging in a risky activity. Even though there are companies that will insure you, you will probably have to pay a higher monthly life insurance premium because these all fall under the underwriting guidelines. Some insurance companies will definitely insure you but will have some clauses that include deducting money from your insurance payout based on the activity you were participating in which caused your death. Here are the hazardous activities that life insurance companies consider when you are applying: 

What do life insurance companies consider as hazardous activities

Life insurance is affordable 

Life insurance is quite affordable for those who are concerned about the price of life insurance premiums. There are a lot of different things that can affect the price of your life insurance premiums and there are some things that you need to consider when you’re applying for life insurance including:

Life insurance underwriting will consider your age, gender, criminal or driving record, health conditions, and occupation or hobbies.

First and foremost, fully underwritten life insurance (term life insurance and permanent life insurance) differs depending on those factors above but there are some great rates the sooner you get life insurance, and even if you are over 40 there are still really great affordable rates depending on your health and lifestyle. Take these rates from the various life insurance companies in Canada: 


Life insurance underwriting will consider your age, gender, criminal or driving record, health conditions, and occupation or hobbies.

This being said it is best for you to get an instant quick quote or you can contact one of our life insurance brokers to find out exactly how much your life insurance premiums will cost you and we can help you find out the various costs from company to company and we can find a life insurance package that fits your lifestyle and your needs. Check these blogs out to find out the cost of a 10 year term and the cost of a 20 year term

Life insurance can build cash value

Permanent life insurance has both a universal life insurance option and a whole life insurance option. Permanent life insurance never expires and provides a benefit upon the death of the policyholder. A common feature of permanent life insurance is a cash value component, which allows you to invest a portion of your premium money tax-deferred in cash accumulation. In Canada, permanent life insurance offers coverage that is guaranteed to pay out upon the death of the insured and has no expiration date. Typically, premiums are due for a set amount of time (10, 15 or 20 years) or until the insured person’s death. 

Universal life insurance cash value

The accumulation of funds within your particular policy is referred to as the cash value in a universal life insurance policy. Based on the investments made, this portion may increase or decrease. Since the death benefit offered to your loved ones is always guaranteed, it is kept apart from that payment. The cash value of the policy can also be withdrawn at any time, and it grows with each premium payment. What distinguishes universal life insurance from its competitors in the permanent life insurance market is the flexible cash value portion of the policy.

When you pay more than the required minimum amount toward your universal life insurance premium, the cash value grows. During the course of the policy, investments are another source of growth. Marketers promote this cash value as a perk and as a way for policyholders to borrow money if necessary. This can take the form of policy cancellation, withdrawals, or loans.

The withdrawal of the funds might also have tax repercussions. Prior to cancelling your policy, it’s important to review the terms and conditions because the death benefit may be altered. Check out this blog to find out more about Universal life insurance: Permanent Life Insurance: Universal Life vs Whole Life vs Term 100.

Whole life insurance cash value

Similar to how a universal life insurance policy’s cash value operates, whole life insurance does as well. It has the potential to grow and accumulates a portion of the money you pay on a regular basis in the form of premiums. The policyholder may access this growth tax-free at any time during the term of the policy, but the money withdrawn will be subject to taxes (unless withdrawn via a policy or 3rd party bank loan). The guaranteed return rate offered by the majority of whole life insurance policies is typically low and only serves as an approximation of how much your cash value will actually increase. There are also non-guaranteed return options for whole life insurance where the return rate depends on dividends that can be applied to your cash value every year, but with no estimate on how much that will amount to. 

Similar to universal life insurance, whole life insurance accrues cash value over the course of the policy through premium payments and investments. Marketers promote this cash value as a perk and as a way for policyholders to borrow money if necessary. This can take the form of policy cancellation, withdrawals, or loans. Depending on the life insurance company’s policy, this may or may not result in interest being charged.

You can get in touch with your insurer to find out how much money is available to you to take if you want to make a withdrawal from your whole life insurance policy. Additionally, they will be able to decide whether or not you will be taxed on the loans and what interest rate may be used. You will withdraw the specified amount from investments, along with any associated potential growth. Before cancelling your policy, it is wise to review its terms and conditions because the death benefit might be diminished.

Life insurance riders can cover you from the unpredictable

Life insurance companies offer riders which help cover you in the event of the unpredictable. There are riders such as children’s life insurance, critical illness insurance and disability insurance, there are also some specific life insurance riders and benefits that certain life insurance companies offer which are unique to them, that is why it is best to contact a life insurance broker to find the right life insurance policies for your situation. An insurance policy’s riders are supplemental benefits that can be purchased and added. They let you personalize a policy and can offer a variety of extra protection or advantages. Riders add extra protection to your life insurance policy by covering unanticipated occurrences like a terminal illness.

Although purchasing a rider will increase the price of your policy, in most cases the additional premium is less than the total cost of your policy without any riders. Some common life insurance rider types, such as a term conversion rider, are offered without charge. Many riders are also only triggered to provide a benefit in certain circumstances, and some riders have rules and conditions that need to be met before they can be added to the life insurance policy.

Table graphic of life insurance riders by type (life, critical illness, disability, general) e life insurance policies and last-to-die insurance policies

Because they let you customize the coverage to meet your needs, life insurance riders may be added. You can add riders to your policy’s terms and conditions to increase flexibility and extend coverage. For instance, the renewable term rider allows you to extend your term life insurance policy without going through an underwriting process.

There is no one-size-fits-all life insurance or rider solution or answer, so you should only get them if they apply to you and your situation. They are ideal if they offer a benefit that you are looking for in addition to what your basic life insurance policy already offers or covers. To find out more about life insurance riders, read our article: Life Insurance Riders: How Do They Work?

Frequently Asked Questions (FAQs) about life insurance

Yes, recovering alcoholics can buy traditional life insurance after three years of sobriety and will pay much higher rates than people with no history of alcohol addiction.

A term life insurance policy is the simplest, purest form of life insurance: You pay a premium for a period of time – typically between 10, 15, 20, 25 and 30 years – and if you die during that time a cash benefit is paid to your family (or anyone else you name as your beneficiary).

Term life insurance provides coverage for a set period of time, typically between 10 and 30 years, and is a simple and affordable option for many families. Whole life insurance lasts your entire lifetime and also comes with a cash value component that grows over time.

When buying life insurance in Canada, a 20-year term life insurance policy has a level (unchanging) premium and a specific death benefit. As long as premiums are paid, your coverage will remain intact. This helps to ensure your beneficiaries are protected if you pass away. Once you reach the end of the policy term, the policy ends.

This depends on the details of your life insurance policy. If your policy is revocable, this means you can change the beneficiary on file at any time without needing to notify the previous beneficiary. Your policy could also be irrevocable, which means the owner of the policy is not able to change the beneficiary without the original individual’s consent.

Yes, recovering addicts can buy traditional life insurance, no medical life insurance, and simplified life insurance. This all depends on the drug used, the usage frequency, years sober and many other factors. Regardless, if you are a recovering addict there are plenty of life insurance companies that are willing to provide you coverage. 

A 10-year term life insurance policy has a level (unchanging) premium and a specific death benefit. As long as premiums are paid, your coverage will remain intact. This helps to ensure your beneficiaries are protected if you pass away. Once you reach the end of the policy term, the policy ends.

There is currently no limit on how many life insurance policies you can have, and in some cases, having multiple life insurance policies may help you meet your goals for your financial future.

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.

No medical life insurance is a certain type of life insurance that you can buy without having to undergo a medical examination. This type of life insurance is easier to apply for and usually has a shorter application period.

 Yes, seniors can definitely purchase life insurance in Canada. There are awesome term life insurance policies as well as whole life policies that are out there that can provide coverage for seniors 60 years and older.

Family life insurance is an insurance package that is provided by many different Canadian life insurance companies. Family life insurance is basically a regular term life insurance or permanent life insurance policy with additional riders such as children’s insurance, critical illness insurance and disability 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.

A general rule of thumb to find out the life insurance coverage amount that you need is your annual income multiplied by 7 or 10. This number will help your family both: sustain their current lifestyle and be protected from financial hardships. This is just a quick calculation, the best way to figure out a solid amount of coverage is by contacting a life insurance broker and assessing your needs, wants, as well as your assets and liabilities.

There are a handful of things to consider when you purchase 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

Thinking of buying life insurance?

If you’re not sure how life insurance can help you and your lifestyle, we can help you figure out what the best plan for you is and when to apply. At Protect Your Wealth, we work with and compare policies and quotes from the best life insurance companies in Canada to ensure the best solution for you and your needs. We provide expert life insurance solutions, including 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. 

If finding life insurance is something you are interested in, contact Protect Your Wealth today for free advice on finding the right life insurance policy for your needs. We are proudly based out of Hamilton, servicing clients anywhere in Alberta, British Columbia, and Ontario, including areas such as Calgary, Dundas, Waterdown, and Kelowna.

Talk to an advisor today to find out why you should have life insurance in Canada.

Best Life Insurance Quotes Canada