The Best and Worst Life Insurance Policies in Canada

Posted on December 3, 2013 and updated December 4, 2018 in Canada Life Insurance Company of Canada, Life Insurance Canada News 9 min read
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Life insurance may not be on the top of anyone’s expenses list, but when it’s time to invest in your family’s future, you want to know you’re getting the best coverage at the best price rather than a huge monthly expense. 

Before you hand the cash to just any broker, you need to first determine how much life insurance you need. Our online tool Needs Analysis Calculator can let you know how much is just enough.

 

Difference in life insurance cost in Canada

It’s no secret that life insurance rates vary widely from company to company. Knowing what separates the best life insurance policies in Canada from the worst ones can save you thousands upon thousands of dollars. Many brokers only work with one or two companies. This limits your options, and each company also has different underwriting guidelines. Company A may issue a policy standard for a male who is 6’1″ and 270 pounds and otherwise in good health, whereas Company B may issue the same policy with a 50% rating. This can dramatically impact the premium. 

Here is an overview of 2018 life insurance rates for various policyholder profiles*. We use as an example a life insurance policy with $250,000 coverage.

PolicyComparisonMale, 40 years old, non-smoker (Sep, 2018)Female, 40 years old, non-smoker (Sep, 2018)

Term 10

(coverage: $250K)

Link: Term life insurance quotes

Cheapest life insurance in Canada

RBC Life Insurance,
$18.34/month
and
Faith Financial,
$18.90/month

RBC Life Insurance,
$14.85/month
and
Faith Financial,
$15.53/month

Most expensive life insurance

Assumption Mutual Life Insurance,
$48.83/month
and
UCT – United Commercial Travelers of America,
$42.16/month

Assumption Mutual Life Insurance,
$39.15/month
and
UCT – United Commercial Travelers of America,
$34.25/month

 
 

Term 15

(coverage: $250K)

Cheapest life insurance in Canada

Humania Assurance,
$24.08/month
and
BMO Life Assurance,
$26.55/month

Humania Assurance,
$19.13/month
and
SSQ Insurance,
$20.70/month

Most expensive life insurance

UCT – United Commercial Travelers of America,
$54.66/month
and
Humania Assurance,
$37.80/month

UCT – United Commercial Travelers of America,
$45.91/month
and
Humania Assurance,
$28.13/month

 
 

Term 20

(coverage: $250K)

Cheapest life insurance in Canada

RBC Life Insurance,
$30.26/month
and
L’Excellence Life Insurance,
$31.05/month

RBC Life Insurance,
$22.75/month
and
Empire Life Insurance,
$23.63/month

Most expensive life insurance

UCT – United Commercial Travelers of America,
$70.71/month
and
Manulife Insurance,
$57.78/month

UCT – United Commercial Travelers of America,
$60.50/month
and
Assumption Mutual Life,
$45.00/month

 
 

Term to 100

(coverage: $250K)

Cheapest life insurance in Canada

Desjardins Financial,
$197.33/month
and
Industrial – Alliance Life Insurance,
$198.00/month

Industrial – Alliance Life Insurance,
$163.35/month
and
Desjardins Financial,
$171.90/month

Most expensive life insurance

Western Life Assurance,
$246.18/month
and
Canada Protection Plan,
$245.93/month

Canada Protection Plan,
$222.75/month
and
Western Life Assurance,
$198.66/month

 
 

Whole Life

(coverage: $250K)

Link: Whole life insurance quotes

Cheapest life insurance in Canada

Foresters Life Insurance,
$204.75/month
and
Desjardins Financial,
$213.53/month

Foresters Life Insurance,
$178.20/month
and
Empire Life Insurance,
$183.83/month

Most expensive life insurance

Humania Assurance,
$304.43/month
and
Assumption Mutual Life,
$274.28/month

Humania Assurance,
$299.03/month
and
Canada Protection Plan,
$239.40/month

* Please note that all the rates shown above are generated in September 2018 and based on life instant quotes and can strongly vary based on a personal profile of a policyholder. All rates shown here are directional and do not substitute a full quoting process with an insurance broker / insurance company.

 Insurance renewals and conversion features can also differ sharply between companies. Industrial Alliance plans are convertible to 65, whereas Empire Life’s plans are convertible to 75. This can be huge to a policyholder who develops a serious illness after 65 and wants to convert their coverage. The type of policy the insured can convert to is also very important. Some companies, like RBC Insurance, have a limited number of conversion options. But Industrial Alliance allows the insured to convert to over seven different policies. 

The Guaranteed Renewal feature also differs among companies. Some companies only offer one guaranteed renewal, while others renew to 75, 80, or 85. Empire Life offers the gold standard, with guaranteed renewals to age 100. The insured should also compare the cost of the renewal. For example, both companies could offer premiums on Plan A at $60 a month, but one company’s guaranteed renewal premium could be $150 a month, and another company’s could be $260 a month. This can translate into you paying thousands of extra dollars.

People with health issues should be extra cautious when purchasing life insurance. If you are declined, this could limit the amount and type of plan you could qualify for in the future. Each insurance company has its underwriting protocols. Some companies will treat someone with high blood pressure who’s 30 pounds overweight as at excessive risk and offer a rated policy — that is, a policy that charges a surplus premium. But other companies will give the same person standard rates.  

Most companies offer so called no medial life insurance policies tailored to the needs of those who might have difficulties in getting standard life insurance. 

An important note: many of the hard-to-insure / no medical life insurance policies have a two-year waiting period on non-accidental deaths.

Direct life insurance sales vs insurance brokers

Another area to watch out for is these so-called direct sellers. These insurance companies bypass the broker and sell direct to the public. At first glance, many people like the idea of not having to meet with a high-pressure salesperson. But consider the following. Many direct sellers offer premiums that are often 20% or even more expensive than policies sold through independent brokers. Also, many of these people you speak with on the phone have quotas to meet, so you may actually experience more sales pressure. Lastly, the level of expertise and service from a call centre operator is going to be far below that of a qualified insurance broker. 

Insurance brokers also have access to a wide variety of carriers and products, so you’re not pigeon-holed into one company. As an example, LSM Insurance brokers work with over 20 Canadian life insurance companies to get you the best life insurance. They can shop around and get you the best life insurance rates in Canada. And they are there to help you after the sale or help walk your family through the claims process at the time when they need guidance and support.

 

avatar
Jane
Jane

My spouse is going to cancel his life insurance but we still have a mortgage. I would have no way to cover it. Can I get a policy to cover this?

Dadhi
Dadhi

Cancellation of insurance policy without any backup plan is not rational decision. Not only mortgage, still you need your final expenses and taxes.

Syed Raza
Syed Raza

Hi Jane,
Yes, an individual life insurance policy can be taken out to cover the mortgage. However, its always advisable to have your new policy in force before cancelling the old one. Thanks

Stephen Shinners
Stephen Shinners

Male 57 next birthday non smoker never have and non drinker. Would like to about no health check life insurance providing cover for next 20 or 25 years giving mid to maximum cash sums on death etc. I am British and live in England but feel you might be able to offer a better deal than what is offered here.

LSM Insurance
LSM Insurance

Thanks Stephen. Unfortunately we are only licensed in Canada. Good luck with things.

Alan
Alan

I am a 60 year old male non smoker in good health with no medical issues. Weight and BP is normal. Im looking for both life and critical illness insurance. I was hoping for total premiums around 250.00 mo for 100k coverage of each. Is this feasible?

LSM Insurance
LSM Insurance

Hi Alan,

Thanks for the note. Yes coverage is available, the premiums will depend on your age nearest age – most insurance companies use age nearest versus age last pricing. Also the premiums will depend if you take a Term or Permanent policy.

Jeremy S
Jeremy S

I’ve decided that I will need some life insurance. I’m a 39 year old non-smoker male (have never been a smoker). I am single and have no children, so I believe that I only need a small policy such as $50,000. Can you also provide quotes for $100,000 just in case I’ll need more than the 50k due to unforeseen expenses, etc. Thanks!

LSM Insurance
LSM Insurance

Thanks Jeremy. We are happy to help out. The premiums will depend on your age nearest age and the type of Plan. Term plans have lower initial premium but the cost increases as you get older and Permanent plans have higher premiums but the premiums generally never go up.

Louise
Louise

Hello, I am a 62 year old female with Hepatitis C. What kind of insurance would be good for me.

LSM Insurance
LSM Insurance

Hi Louise, Thanks for the note. You could definitely qualify for a Simplified Issue plan – no medical tests and a anywhere from 3-12 health questions or a potentially a fully underwritten traditional life insurance policy. The premiums will depend on your smoking status, amount of coverage and type of plan. We will email you for more details so we can get started on a quote.

olive T
olive T

Can you let me know what rate I would pay for a $50,000 Quick pay policy. I’m 49 but ideally would like to stop paying for the policy when I retire. I’m in good health

LSM Insurance
LSM Insurance

Thanks Olive. I will send you a separate email we need to know your smoking status and what age you plan to retire at.

Kacey
Kacey

DSoes Met Life still exist in Canada I have an old Universal Life plan with them

LSM Insurance
LSM Insurance

Met Life was purchased by Mutual Life which became Clarica which was bought by Sun Life. Equitable Life also took over some of their policies.

You may want to check out our life insurance company directory link to lsminsurance.ca

Usula
Usula

It’s amazing how much Whole Life policies have gone up in cost. I’m sure glad I got my policy when I did.

LSM Insurance
LSM Insurance

Hi Ursula, Good point, Universal Life level cost and Participating and Non Participating Whole have all gone up and may be going up further. You also benefited by locking in at a younger age.

Edward
Edward

Does La Capitale offer it’s new policy in Ontario?

LSM Insurance
LSM Insurance

Hi Edward, I think you are referring to their new Simplified Issue policy with face amounts up to $100,000. Yes they do and we are happy to help with a quote.

LSM Insurance
LSM Insurance

Hi Lara, No life insurance companies in Canada offer Critical Illness to an 85 year old. Most companies will only insure applicants 70 years and under for Critical Illness insurance.

LSM Insurance
LSM Insurance

Which company if any offers critical illness to an 85 year old