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Did you know that the cost of life insurance in Canada can range from as little as $10 per month to over $300, depending on your age, health, and coverage type? Many Canadians are unaware of how affordable—or expensive—term life insurance can be, leaving them unprepared when it comes time to protect their loved ones.
Life insurance premiums aren’t one-size-fits-all. Factors like your age, gender, lifestyle, smoking habits, and even your hobbies can significantly influence your premiums. Understanding these nuances is crucial for making informed decisions and finding a policy that fits your needs and budget.
Whether you’re a young professional just starting out, a parent with growing responsibilities, or someone approaching retirement, there’s a life insurance plan tailored for you—and likely more affordable than you think.
In this guide, we’ll break down exactly how much life insurance costs in Canada, explore the factors that impact premiums, and show you how to find the best rates. By the end, you’ll be equipped with the knowledge to make a confident, informed choice. Let’s dive in!
- Key takeaways:
- Personal factors significantly impact life insurance premiums, including age, gender, smoking status, health, lifestyle, family history, and occupation. Younger and healthier individuals generally pay less.
- Policy factors also influence costs, such as the type of policy (term or permanent), term length, and coverage amount.
- You can lower life insurance costs by buying while you’re young and healthy, getting the right amount and type of coverage, comparing rates across multiple insurers, bundling policies, or paying annually.
What Is Life Insurance?
Life insurance is a financial safety net designed to provide your loved ones with financial relief if you pass away. Upon your death, the insurance company pays a tax-free lump sum benefit to your beneficiaries. This money can help your family maintain their lifestyle, cover daily expenses, pay off debts like a mortgage, fund education, or even support a business.
Life insurance is particularly important for:
- Families who depend on your income to cover living costs.
- Individuals with significant debts, such as a mortgage.
- Business owners who want to ensure their business continues in case they or a partner pass away.
For most people, term life insurance is the most suitable option for protecting their families or businesses. It is more affordable than permanent life insurance, allowing you to buy a large amount of coverage at a lower cost.
With term life insurance, you choose the term length and coverage amount, and your premiums remain guaranteed during that term. Common term lengths include 10, 20, and 30 years, although you can select terms ranging from 5 to 50 years, depending on your needs.
This flexibility makes term life insurance an excellent choice for those seeking affordable and customizable coverage to protect their families and financial obligations.
In the next sections, we’ll explore the factors that affect the cost of life insurance.
Personal Factors That Affect Life Insurance Costs
The cost of life insurance varies greatly depending on personal factors that influence your level of risk to the insurer. Here are the main factors and how they impact your premiums:
1. Age
Age is one of the biggest determinants of life insurance cost. Younger individuals generally pay lower premiums because they are less likely to die during the policy term. Below is a table showing the monthly premiums for a 20-year term, $500,000 policy for a male non-smoker:
Age | Male non-smoker |
|---|---|
25 | $30 |
30 | $30 |
35 | $32 |
40 | $45 |
45 | $72 |
50 | $123 |
55 | $214 |
60 | $403 |
65 | $678 |
The premiums displayed in the table are fixed for the initial 20-year term. For example, a non-smoking 25-year-old male can obtain a $500,000 term-20 policy with a guaranteed monthly cost of $30 for the next two decades.
As shown in the table, premiums remain relatively low until you reach your 40s.
2. Gender
Gender also affects premiums, as women generally have longer life expectancies than men. As a result, women often pay up to 30% less for life insurance than men. Here’s the same table as above with a column added for women.
Age | Male non-smoker | Female non-smoker |
|---|---|---|
25 | $30 | $20 |
30 | $30 | $22 |
35 | $32 | $23 |
40 | $45 | $34 |
45 | $72 | $52 |
50 | $123 | $83 |
55 | $214 | $153 |
60 | $403 | $281 |
65 | $678 | $474 |
3. Smoking status
Smokers pay significantly higher costs due to the health risks associated with smoking. In some cases, smokers may pay premiums nearly three times higher than non-smokers. Below is the same table with columns added for male and female smokers:
Age | Male non-smoker | Male smoker | Female non-smoker | Female smoker |
|---|---|---|---|---|
25 | $30 | $50 | $20 | $31 |
30 | $30 | $56 | $22 | $41 |
35 | $32 | $80 | $23 | $65 |
40 | $45 | $126 | $34 | $96 |
45 | $72 | $211 | $52 | $141 |
50 | $123 | $345 | $83 | $224 |
55 | $214 | $560 | $153 | $357 |
60 | $403 | $893 | $281 | $569 |
65 | $678 | $1,329 | $474 | $891 |
Your age, gender, and smoking status provide an initial estimate for your life insurance cost, known as the “standard rate.” However, your unique health profile and lifestyle choices will ultimately determine your final premium.
What is a life insurance rating?
Before we get into these factors, let’s discuss the concept of a “rating.” A life insurance rating is an additional premium, typically ranging from +50% to +300% above the standard rate. For example, if your standard rate based on your age, gender, and smoking status is $100/month, a +50% rating will make it $150/month.
In addition to a percentage-based rating, insurers may also apply a flat extra rating. This is a fixed dollar amount added to your premium for every $1,000 of coverage. For example, a $5 flat extra rating per $1,000 on a $500,000 policy would increase your annual premium by $2,500.
The rating is applied when your health, lifestyle choices, or other risk factors exceed standard underwriting guidelines.
Alternatively, if you maintain a healthier lifestyle and have lower risk factors than the average person of your age, gender, and smoking status, you may qualify for a preferred rate. This can result in savings of up to 30% on your insurance premiums.
Now, let’s explore the personal factors that determine whether you qualify for standard, preferred, or rated life insurance premiums.
4. Build
Your height-to-weight ratio is crucial in determining your premium. Here’s a table showing the ratings for a range of heights and weights:
Ratings | +50% | +75% | +100% | +125% | +150% |
|---|---|---|---|---|---|
Height (ft-in) | Weight (lbs) | ||||
4’10” | 195 | 200 | 210 | 215 | 220 |
5’2″ | 225 | 230 | 240 | 245 | 255 |
5’6″ | 240 | 250 | 260 | 270 | 280 |
5’10” | 275 | 285 | 295 | 305 | 315 |
6’2″ | 312 | 325 | 330 | 340 | 350 |
For example, if you are 5’6” and weighed 260 lbs, you would have a +100% rating on your policy.
5. Medical history
Chronic conditions or a history of significant illnesses can impact life insurance premiums. For example, individuals with depression or sleep apnea may qualify for standard rates if their condition is mild and well-managed.
However, their premiums can also be subject to additional ratings ranging from +50% to +300%, depending on factors such as the date of diagnosis, severity, treatment received, medications, and overall health management.
In many cases, insurers will request a detailed medical report from your doctor to gather the necessary information and make an informed decision.
6. Lifestyle
Risky activities and certain lifestyle factors can significantly increase life insurance premiums, as they suggest a higher likelihood of claims. Here are some key lifestyle risks that can affect your premiums:
- Travel to dangerous countries: Visiting regions with political instability, high crime rates, or health risks.
- Drug use: Recreational or habitual drug use can lead to higher costs or even denial of coverage.
- Alcohol use: A history of excessive alcohol consumption or alcohol-related issues.
- Participation in hazardous sports: Activities like skydiving, scuba diving, backcountry skiing, or rock climbing.
- Flying as a pilot: Recreational or private pilots may face surcharges based on flying hours and certifications.
- Driving offenses or violations: A record of speeding, DUIs, or other traffic violations.
By factoring in these lifestyle risks, insurers determine whether to apply additional premiums or exclusions to the policy.
7. Family history
Your family medical history is an important factor in determining life insurance premiums. Insurers consider whether immediate family members (such as parents or siblings) have been diagnosed with serious health conditions like cancer, heart disease, or diabetes, particularly at a young age.
A history of such conditions may suggest a higher genetic predisposition to these illnesses, increasing perceived risk. For example, if two immediate family members had skin cancer, you might face a premium increase of +50%.
8. Occupation
Your occupation can significantly impact life insurance premiums, particularly if it involves a high level of risk. Jobs that require working in hazardous environments or with dangerous materials often result in higher premiums to compensate for the increased likelihood of accidents or health issues.
Examples of high-risk occupations include:
- Working in dangerous locations: Jobs such as logging, steelworking, or underground mining.
- Use of hazardous materials: Handling asbestos, explosives, or nuclear materials.
Insurance companies typically apply a flat extra rating for these occupational risks.
Policy Variables That Affect Life Insurance Costs
In addition to the personal factors in the previous section, policy-specific factors play a significant role in determining the cost of life insurance. Here are the key policy variables that influence premiums:
1. Term length
A term life insurance policy offers fixed, guaranteed rates for a specific term, such as 10 or 20 years. However, when the initial term ends, renewing the policy can be significantly more expensive. Renewal premiums for a 10-year term policy, for example, may increase by a factor of three to ten for the subsequent 10-year period.
The length of your policy term significantly impacts the cost of premiums. A longer term means higher premiums because the insurer is providing coverage for an extended period, increasing the likelihood of a payout.
For example, a term-20 policy will cost more than a term-10 policy, and a term-30 policy will cost more than a term-20. When deciding on the term, balance affordability with your coverage needs over time. Here are two tables displaying monthly premiums for the initial term of a $500,000 life insurance policy, comparing 10-year, 20-year, and 30-year terms for standard rated male and female non-smokers.
Male non-smoker
Age | Term-10 | Term-20 | Term-30 |
|---|---|---|---|
25 | $23 | $30 | $38 |
30 | $23 | $30 | $45 |
35 | $23 | $32 | $54 |
40 | $29 | $45 | $89 |
45 | $43 | $72 | $151 |
50 | $67 | $123 | $237 |
55 | $117 | $214 | $384 |
60 | $206 | $403 | Above maximum age |
65 | $368 | $678 | Above maximum age |
Female non-smoker
Age | Term-10 | Term-20 | Term-30 |
|---|---|---|---|
25 | $15 | $20 | $27 |
30 | $16 | $22 | $33 |
35 | $17 | $23 | $41 |
40 | $22 | $34 | $66 |
45 | $31 | $52 | $108 |
50 | $49 | $83 | $174 |
55 | $82 | $153 | $278 |
60 | $149 | $281 | Above maximum age |
65 | $251 | $474 | Above maximum age |
2. Coverage amount
The death benefit amount directly correlates with your life insurance premium. The higher the coverage amount, the more you’ll pay in premiums.
This relationship is proportional; for instance, a $1,000,000 policy will cost approximately double what a $500,000 policy costs, assuming all other factors remain constant. Below are two tables comparing the monthly premiums for $100,000, $250,000, $500,000, and $1,000,000 of death benefit for a 20-year term:
Male non-smoker
Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
25 | $11 | $18 | $30 | $53 |
30 | $12 | $18 | $30 | $53 |
35 | $13 | $20 | $32 | $55 |
40 | $16 | $27 | $45 | $84 |
45 | $23 | $42 | $72 | $136 |
50 | $33 | $70 | $123 | $237 |
55 | $57 | $125 | $214 | $413 |
60 | $99 | $225 | $403 | $786 |
65 | $176 | $374 | $678 | $1,283 |
Female non-smoker
Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
25 | $10 | $14 | $20 | $35 |
30 | $10 | $14 | $22 | $37 |
35 | $11 | $16 | $23 | $41 |
40 | $13 | $20 | $34 | $60 |
45 | $17 | $30 | $52 | $97 |
50 | $27 | $48 | $83 | $158 |
55 | $42 | $86 | $153 | $295 |
60 | $65 | $151 | $281 | $547 |
65 | $123 | $252 | $474 | $873 |
3. Type of insurance
The type of life insurance you choose greatly influences the premium. Permanent life insurance policies, such as whole life, universal life, and term-100, are generally more expensive than term life insurance.
This is because permanent policies provide lifelong coverage and guarantee a payout as long as premiums are paid. Some permanent life insurance plans even accumulate cash value over time, which can be accessed for various financial needs, such as supplementing retirement income or for a down payment for a home.
In contrast, term policies often expire without a payout and don’t have a cash value, making them more affordable upfront but temporary in nature.
While term life insurance is typically more affordable in the short term, the cost of renewing the policy increases significantly over time. That’s why, for long-term coverage, a permanent life insurance policy may offer a more cost-effective solution, especially if you plan to maintain coverage well into retirement.
Here are two tables comparing the monthly costs of various types of term and permanent insurance plans for $500,000 of coverage:
Male non-smoker
Age | Term-20 | Term-100 and universal life (level cost of insurance) | Whole life (non-participating) | Whole life (participating) |
|---|---|---|---|---|
25 | $30 | $204 | $209 | $524 |
30 | $30 | $246 | $265 | $610 |
35 | $32 | $307 | $330 | $720 |
40 | $45 | $386 | $422 | $866 |
45 | $72 | $479 | $566 | $1,058 |
50 | $123 | $571 | $715 | $1,319 |
55 | $214 | $753 | $928 | $1,506 |
60 | $403 | $1,005 | $1,127 | $1,671 |
65 | $678 | $1,338 | $1,521 | $2,147 |
Female non-smoker
Age | Term-20 | Term-100 and universal life (level cost of insurance) | Whole life (non-participating) | Whole life (participating) |
|---|---|---|---|---|
25 | $20 | $171 | $176 | $458 |
30 | $22 | $207 | $221 | $538 |
35 | $23 | $263 | $276 | $636 |
40 | $34 | $331 | $338 | $763 |
45 | $52 | $414 | $468 | $928 |
50 | $83 | $499 | $560 | $1,148 |
55 | $153 | $628 | $770 | $1,298 |
60 | $281 | $826 | $939 | $1,437 |
65 | $474 | $1,136 | $1,300 | $1,827 |
4. Riders
Adding life insurance riders to your policy for additional benefits will increase your premiums. For example, a child’s term rider, which provides life insurance coverage for your children, or a disability waiver of premium rider, which allows you to pause premium payments if you become disabled, adds extra cost.
Final premium
The final cost of your life insurance policy is influenced by a combination of your personal factors and the way you design your policy. Together, these elements shape the risk profile and coverage structure, ultimately determining the premium you’ll pay.
How To Get the Best Life Insurance Rates
Now that you understand the factors that influence life insurance rates, let’s explore some strategies to help reduce your premiums:
1. Buy while you’re young and healthy
Purchasing life insurance early can lock in lower rates, as premiums increase with age and health changes. Waiting too long could result in higher costs or even denial if you develop a medical condition.
2. Buy the right amount of coverage
Conduct a life insurance needs analysis to determine how much coverage you actually require. Avoid overinsuring yourself, as this will result in paying unnecessarily high premiums.
3. Work with an advisor if you have health or lifestyle risks
If you have a medical condition or lifestyle risk, consult an insurance advisor. They can help you find insurers that offer favorable rates, as some companies specialize in higher-risk cases or provide standard rates for conditions others might rate more heavily.
4. Choose the right type of insurance
Match the policy type to your needs. If you need coverage for a specific time frame, opt for term insurance instead of permanent insurance. Similarly, select a term length appropriate for your needs. For example, while term-10 policies might seem cheaper initially, they can cost significantly more in the long run if you need coverage for 20 or 30 years.
5. Compare rates across companies
Insurance rates vary between companies based on factors like age, gender, and smoking status. An experienced advisor can quickly compare options, ensuring you get the best deal while considering the pros and cons of each insurer.
6. Avoid mortgage or creditor life insurance
Personal term life insurance policies are generally more affordable and offer fixed coverage amounts. Mortgage life insurance decreases in coverage as you pay down the mortgage, making it a less cost-effective option.
7. Bundle policies for savings
Some insurers offer discounts if:
- Spouses or partners purchase policies together.
- You buy multiple term lengths (e.g., term-10 and term-20) in one policy in a strategy known as “laddering.”
- You bundle life insurance with other types, like critical illness insurance.
8. Pay annually instead of monthly
Opting for annual premium payments avoids monthly interest charges, which can be as high as 8%. If your budget allows, paying annually can result in significant savings over the policy term.
By implementing these tips and working with a knowledgeable insurance advisor, you can secure the coverage you need at an affordable price.
Let's Get Started On Your Life Insurance Journey
Now that you have a better understanding of life insurance costs and the various factors affecting them, it’s time to take action!
Contact us today at info@briansoinsurance.com or call 604-928-1628 for a free, no-obligation consultation. We’ll compare policies from leading insurance companies to ensure you get the best coverage tailored to your unique needs.
Our commitment doesn’t stop at helping you find the right policy. We provide ongoing support to ensure your coverage continues to align with your financial and personal circumstances as they evolve. Additionally, we can help design a complete insurance package, including term and permanent life insurance, disability insurance, health and dental plans, and critical illness insurance.
Alternatively, use the form below to receive a personalized quote delivered directly to your inbox. Take the first step toward securing your peace of mind today!
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do you insure seniors at age 72 ?
Hi Gerry,
Yes, seniors can get life insurance at 72. I’ll shoot you an email with more information.
Regards,
Brian