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Who needs life insurance in Ontario will vary, depending on your life situation. In general, if someone depends on your income, you will need life insurance so they’re financially protected in the worst-case scenario. Here are some examples of who might need life insurance:
Life insurance is not taxable in Ontario, but there are a few exceptions. Beneficiaries of life insurance in Ontario will receive the full amount of the policy payout in the form of a lump sum. This is especially true for a term life insurance policy.
On the other hand, there can be complications with taxation for a permanent life insurance policy. If your permanent policy accumulates cash value over time, that portion of the life insurance proceeds will be taxed.
You can save money on life insurance by researching life insurance quotes in Ontario, knowing that rates vary and so do the types of coverage.
PolicyMe offers term life insurance, which is what most families in Ontario need. This type of life insurance offers families the most flexible and versatile coverage. You should also use our term life insurance calculator to figure out exactly how much you need (and for how long) so you're not overpaying for coverage.
Life insurance in Ontario works differently, depending on the type of life insurance you have. There are two main types of life insurance you can choose from: term life insurance and permanent coverage (also known as whole or universal life insurance).
The biggest difference between the two? Term life insurance policies are more affordable, and let you choose the length of coverage (usually 10 to 30 years), while whole policies last your entire life and are about 4x to 5x more expensive.
You cannot legally sell your life insurance policy in Ontario. For reference, selling a life insurance policy is only allowed in two provinces in Canada: Quebec and Saskatchewan.
In fact, selling a life insurance policy was banned in Nova Scotia and New Brunswick in 2020. In Ontario in 2017, there were some unsuccessful attempts to amend the Life Insurance Act to make selling a policy permissible.
Life insurance is not required in Ontario, which is a good thing because not everyone needs a life insurance policy. There are some rare cases in which having a life insurance policy is required in Ontario, like alimony situations or when taking out specific types of loans.
Life insurance is a financial tool to protect the people in your life that depend on your income for their livelihood. If you do not have dependents, oftentimes we’ll recommend not getting a policy at all.
Mortgage life insurance is not mandatory in Ontario. However, it is a good idea to think about what might happen to your mortgage if you passed away. A life insurance policy can protect your family and your home. But mortgage life insurance is a particular type of life insurance – one that not everyone will benefit from.
In most cases, getting a term life insurance policy in Ontario is a better idea, because the payout can be used for anything your dependents need, like childcare, retirement, education, or of course, paying off the mortgage.
