How Much is Life Insurance in Canada? (Average Cost)

The average cost for life insurance in Canada is estimated at $34 per month, based on industry-wide data. Your life insurance cost will depend on factors like your age, gender, health, and policy type.

The average life insurance payout in Canada is in the $240,000 to $550,000 range.

[fs-toc-omit]Video summary: How does life insurance cost in Canada?

[fs-toc-omit]What is the average cost of life insurance in Canada?

[fs-toc-h2]Average cost of life insurance

The average cost of life insurance in Canada can range widely depending on your health, policy type and your premium amount, says Life Insurance Advisor Erik Heidebrecht.

Here's what you could expect to pay for life insurance, on average, based on data from 33 different Canadian life insurers:

PolicyMe sells term life insurance, and we make it fast, affordable and reliable life insurance to get covered. Check your PolicyMe price below.

[fs-toc-omit]How Life Insurance Companies Calculate your Life Insurance Cost (Premiums)

[fs-toc-h2]What affects the cost of premiums

The cost of life insurance in Canada partly depends on factors that are out of your control, like your age and gender. And it also may depend on factors that are in your control, like your health, lifestyle and coverage amount. Here's exactly what insurers consider when calculating your life insurance premiums:

Insurance companies usually give you your price in two steps:

1. First you'll get a life insurance quote based on your age, gender and smoking status. 
2. After you apply, your final rate may change based on additional information in your application, like your family's medical history. 

And, spoiler alert: rates go up as we grow up. So, the sooner you lock in your premium the better. As the graph shows below, prices really start to climb once you hit your 40s (it's a mortality risk thing, not that we want to remind you).

PolicyMe's prices are 5-10 per cent cheaper than the Canadian competition, plus we let you skip the annoying advisor calls and endless paperwork. Apply online in 20 minutes or less (on average, for eligible applicants) and lock in your protection today.

How much life insurance costs in Canada: by age, gender, health

How much you'll pay for life insurance depends partly on personal factors, like your age, gender and whether you smoke.

This chart shows how life insurance premiums break down by age and gender:

Younger people pay lower life insurance premiums since, statistically, they're less likely to pass away. And the great thing is that once you purchase a term life insurance policy, your price won't change for the entire length of the term, even if it's for 30 years.

Make sure you're getting a level term, though (like with PolicyMe). Yearly renewable policies that are available through Canadian companies like Cover Direct and Emma have prices that go up every year of your term.

Pushing 40 or 50? You can still get affordable life insurance. Term life insurance rates in Canada can cost as little as $30-40 a month from providers like PolicyMe. You'll pay a lot more for whole or no medical life insurance; think hundreds of dollars a month, not dozens.

2. Life insurance premiums by gender

Here are some sample rates to give you an idea of life insurance cost by gender. We've pulled monthly rates for term life insurance for a non-smoker, $500K in coverage for a 20-term policy:

• $33.27 for a 40-year-old woman 
• $44.96 for a 40-year-old man

Your gender plays a role in determining how much life insurance costs, because men have a shorter life expectancy than women, says Harvard Medical School.

3. How smoking affects the cost of life insurance

[fs-toc-h2]Average cost for smokers

Smokers pay much more for life insurance coverage because smoking is tied to serious medical issues like cancer, making smokers more expensive to insure.

You'll need to be nicotine-free for at least one year to qualify as a non-smoker.

And it may be tempting but don't lie about your health status (or lifestyle) on your application. Not only is it considered fraud, but you may also lose your coverage, leaving your family without a financial safety net.

What if I smoke marijuana?

Most insurers classify marijuana users differently than tobacco users. Generally, marijuana users can buy policies that match their needs without paying smoker rates.

4. How health and family history affect the cost of life insurance

[fs-toc-h2]Cost based on health and family history

The healthier you are, the lower your life insurance prices will be. That said, how much your price goes up really depends on your individual health condition.

For example, someone with type two diabetes would likely be declined for coverage if they're under 40 years old. Over 40 years old, you'd pay around 150% of the base price, depending on how well your diabetes is being managed.

Some insurers require applicants to undergo a medical exam and provide your medical history and your family medical history, though you may not have to.

Health conditions that may impact your life insurance costs are:

• High blood pressure
• High cholesterol
• Obesity
• Heart disease
• Cancer
• HIV

If you have been denied coverage or have a pre-existing condition, you can apply for no medical life insurance products, some of which approve you instantly without a medical exam. But these policies are much more expensive, sometimes three times as much as a term policy.

Buy life insurance as soon as possible if you have a pre-existing condition or a family history of medical issues as this will help you lock in the lowest rate. Prices only increase the older you get!

You may pay more for life insurance if you like to live life on the edge. Risky choices like high-risk hobbies (skydiving or scuba diving) increase the risk factor of covering you.

On top of this, insurers may review criminal history and motor vehicle reports to see how risky you are to insure. Driving violations or criminal convictions can affect your monthly price or get your application denied, but each insurer has its own rules.

Here's where the math gets complicated. Your life insurance premiums are calculated with standard industry ratings, from A to J or 1 to 10, with 1 being the most ideal and 10 being the riskiest.

Let's say you engage in a few high-risk hobbies and your life insurance company places you in the "C" rating class. You'd pay about 75 per cent more for life insurance.

6. How your job impacts the cost of life insurance

Dangerous jobs, as classified by life insurers, would include jobs like:

• Roofer
• Driver
• Miner
• Logger
• Construction worker
• Oil rig worker
• Farmers and ranchers
• Commercial fishermen
• Steelworkers
• Police officer
• Firefighter
• Pilot

Risky jobs can have serious real-world consequences. 1,071 workers passed away at work in 2021, reports the Association of Workers' Compensation Boards of Canada.

“Working in an industry with higher rates of injury or occupational hazards typically leads to higher premiums.”

— Sarah Hobbs, Director of Policy for the Canadian Life and Health Insurance Association

Different life insurers may have different definitions of what constitutes a dangerous job, so shop around to get the best life insurance quote.

How much life insurance costs in Canada: by policy details

The life insurance policy you go with will also have a big impact on how much life insurance costs.

1. Average cost of life insurance by coverage amount

The more life insurance coverage you get (i.e. the higher the death benefit is that your beneficiaries would get), the higher your premiums will be.

2. Average cost for life insurance by policy type

The monthly cost of life insurance differs based on the type of coverage you choose, for example here are term life insurance rates versus whole life insurance rates:

3. Average cost of life insurance by policy length

Here are some monthly rates for the cost of a term life insurance policy for a non-smoker, $500K in coverage for a 35 year old non-smoking man, by policy length:

• 10-year term: $22.48
• 20-year term: $31.29
• 30-year term: $54.72

The shorter the policy length, the more affordable the life insurance policy. And most term options (like PolicyMe) are "level", meaning the premiums stay the same the entire term.

Read your policy before signing! Other types of term policies have premiums that go up incrementally, like a one-year renewable or a five-year renewable policy. 

4. Average cost of life insurance for couples

Joint life insurance is a single policy that covers two people under one premium. These policies are often cheaper than buying two separate permanent insurance policies. 

Another option for couples is individual policies which let couples to pick their own lengths and coverage amounts. While this can sometimes be pricier than buying one joint life insurance policy, it's much more flexible.

PolicyMe offers the best of both worlds: couples can buy their own policies and get a discount in their first year when they apply together.

5. Average cost of life insurance for seniors

Senior life insurance is often used for funeral expenses, estate planning and supporting your beneficiaries once you have passed. And it's still very much possible to get good coverage once you're older.

You may have less debt or financial obligations, which means you can purchase a policy with lower amounts of coverage (and lower premiums).

6. How much does life insurance for kids cost?

A child rider benefit can be tacked on to an average 20-term term policy.

PolicyMe offers free child coverage – at no extra cost – to every policy. 

This means that if a policyholder's child passes away, the parents get $10,000 to help them financially during this difficult time.

But whole life insurance premiums for a 5-year-old child can go up to at least 6x the price of certain coverage amounts, that can get sky high.

Some families purchase life insurance for their children to lock in lower prices, using the policy as an investment vehicle for their child's future. One of Canada's leading providers of children's life insurance policies is Equitable Life.

8 ways to save money on your life insurance premiums

1. Buy early: It's best to purchase life insurance when you're younger and lock in a lower price, as rates increase each year.

2. Shop around: Get quotes from various life insurance companies to compare and find the best deal.

3. Consider a term life insurance policy: One of the easiest ways to save money — permanent insurance policies last your entire life but are much more costly.

4. Bundle your policy: Some insurers allow you to bundle your life insurance policy with other types of insurance, like home or car insurance, for a discount.

5. Look for discounts: Some companies offer discounts if you apply as a couple. PolicyMe offers 10% off the monthly cost of life insurance in the first year if you apply together.

6. Maintain a healthy lifestyle: Stay in good health by managing your weight, quitting smoking and avoiding high-risk hobbies.

7. Don't skip the medical exam: If you don't have pre-existing medical conditions, stay away from pricey no medical policies. You may not even have to do a medical exam with traditional policies.

8. Adjust your coverage: You don't need to purchase more life insurance coverage than you need — you can always adjust the death benefit or length of your policy.

FAQ: Life insurance cost Canada

Next steps: ready to start looking for life insurance?

Additional sources:

1. WinQuote Canadian Products. WinQuote by Equisoft. https://www.winquote.net/

2. Hobbs, S., Director of Policy at Canadian Life and health insurance Association. Interview conducted by Hanna Horvath.