In Canada, living a comfortable life is expensive. It is difficult to meet daily and monthly expenses and chances of saving some extra are pretty thin. In Canada for leading a financially secure and stress-free life, it is necessary to have insurance. There are few insurance policies that have been made mandatory by the Canadian government. However, Life insurance is not mandatory in Canada because of which 50% of parents in Canada still haven’t bought it. Investing in life insurance helps you in securing the future of your family after you. 

The misconception about life insurance is that it is very expensive and not everyone can afford it. The fact is it comes with a variety of plans and the cost will depend on your lifestyle, health, age, and other necessary attributes. For purchasing life insurance at a low premium it is not necessary that you should be in excellent health. If you have average health, normal lifestyle and you fall under the less risky zone, you can buy life insurance at a low premium.     

Cost of Life Insurance Canada:

The premiums will vary from person to person and the amount your family receives after your death will depend upon the coverage you have. In Canada, if you are a 30-year-old and willing to purchase term life insurance of 10 years then the approximate monthly cost will be $13 for getting coverage of $100,000. The coverage will increase with increasing risk. Like if you are 60 years old and are an active smoker then the monthly cost for the same coverage will increase from $13 to $100. When you apply for life insurance, the insurance company will analyze how risky your profile is and possible life expectancy. It is beneficial to purchase life insurance at a younger age. The cost of life insurance in Canada is directly proportional to how risky your profile is. The coverage you want will depend upon the needs and lifestyle of your family. Apart from the risk factors, another factor on which the cost of the policy will depend is the type of policy you are purchasing. There are different life insurance policies available and the cost is different.

Types of Policies available are:

  1. Term Life Insurance:  Term life insurance allows you to purchase life insurance for a fixed time period like 5 years, 10 years, or 30 years as per your need. This type of insurance does not offer any type of additional components like an investment.
  2. Permanent Life Insurance: This type of insurance give you coverage for a lifetime. They are 5 to 10 times costlier than term life insurance and also provide additional perks like earning cash value through investment.

While choosing the best life insurance one important thing to keep in mind is that the primary purpose of life insurance is to replace the income you earned monthly and not the investment component. So choose the type of life insurance depending upon your priorities and budget. If you are purchasing life insurance for investment purposes then it is better to invest in Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA). You can also calculate your monthly premium of life insurance online by entering basic information.

Factors Impacting Cost of Life Insurance In Canada:

There are various factors that impact the cost of life insurance. Let’s discuss the impact of each factor on the average cost of life insurance.

1. Age Influence:

Age (Years) Possible Monthly Premium for 20 Year
Life Insurance Policy

2. Gender: As per Harvard Medical School, the lives of women are longer than men. Premium charges of women are less compared to that of men. For example, for a 20-year term life insurance of coverage of $500,000 a 40-year-old woman pays $38 monthly while a man will pay $50 approx.

3. Plan Coverage: The average cost of a life insurance plan is directly proportional to the coverage it offers. A 35-year-old has to pay $13 for getting coverage of $100,000. If he/she wants coverage of say $500,000 then the cost of the premium will be $42.

4. Length of Policy: To make life insurance more affordable go for short-term policies. Premium might increase at the time of renewal though. But still, it will be less as compared to a longer policy.

5. Insurance Company: Each company has different charges of different monthly premiums depending upon their services. One can charge you $20 while the other can charge $27 for the same plan and coverage.

Know more: How Much Life Insurance Do I Need

Therefore, if you are thinking of purchasing life insurance it is important to examine each and every factor carefully and then choose the most suitable policy as per your need and budget. Experts from the insurance sector suggest that one must buy life insurance coverage equivalent to 7 to 10 times what they earn in a year. The annual salary you are getting now might not be sufficient to fulfil your family’s needs in the future. If this is your 1st time, it is important that you understand every aspect in detail before deciding the plan and coverage. You can do all the background work yourself or can contact an insurance broker. The insurance brokers will help you understand different features and hidden clauses before choosing the most appropriate policy for you. 

Policy Master is one of the insurance brokers in Canada dealing mainly in Life insurance and investment plans. The company offer product and services that are innovative and best suited for their client needs. They give personal attention to each client, understand their personal, family, or professional requirement, and provide appropriate solutions. They have reach an extensive network of life insurance companies and their team of experts guides you towards reaching your financial goals. Policy Master can guide you with investment options also.