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Term life insurance cost in Canada
There are two main types of life insurance: term life insurance and permanent life insurance. Term life insurance provides coverage for a specific period of time, usually 10, 20, or 30 years. Permanent life insurance offers lifelong coverage and builds cash value over time that you can borrow against. One of the main advantages of term life insurance is that it is relatively affordable. Premiums are generally much lower than those for permanent life insurance policies, making it a great option for people on a budget. There are various factors that impact the cost of term life insurance. In this article, we will compare the cost of life insurance by age, gender, and health tiers.
˛Term life insurance
Term life insurance is a type of life insurance that provides coverage for a specific period of time also referred to as ‘term’, usually 10-30 years. If you die during the term of the policy, your beneficiaries will receive a death benefit. If you don’t die during the term, the policy expires and you (or your beneficiaries) don’t receive any money.
How much does term life insurance cost in Canada?
When choosing a term life insurance policy, it’s important to consider your needs and objectives. How much coverage do you need? How long do you need it for? Answering these questions will help you determine which type of term life insurance is right for you. Term life insurance premiums are based on the applicant’s age, health, and type of life insurance product. A healthy 30-year-old female looking for a 10-year term life insurance policy can expect to pay premiums of around $8 a month for $100,000 in coverage, while a 30-year-old male who is a smoker, looking for the same 10-year term life insurance policy and $100,000 in coverage would end up paying around $14 in monthly premiums. To get a better idea of how premiums are calculated, let’s review how rates are determined.
How are life insurance rates determined?
The cost of life insurance premiums is determined by the applicant’s life expectancy. Insurance companies consider several characteristics of the applicant to calculate how long they are expected to live. Set out below are the primary factors that determine life expectancy and, by extension, life insurance costs.
Age
Your age is one of the most important factors in determining your life insurance rates. As you can imagine, younger people are expected to live longer; therefore, they are considered at a lower risk to insure by the insurance company. The lower the risk, the lower the life insurance rates. As you age, it isn’t age alone that increases the risk; things that happen to older people raise the risk of insurance.
Gender
It is widely known that males have a lower life expectancy than females. Women pay lower premiums than men, all other things being equal. In fact, according to Statistics Canada, the life expectancy at birth is 4.7 years longer for women than men.
Health
The applicant’s health plays a significant role in determining life insurance costs. Less healthy individuals carry a higher risk for insurance companies. Health factors such as diabetes, high cholesterol, or high blood pressure can lead to premature death. Applicants with any of these conditions are going to pay higher term life insurance rates.
Occupation
The type of work the applicant does also carries different levels of risk. An office worker, for example, carries a lower risk of insurance than a longshoreman or a coal miner.
Tobacco use
Smokers are known to have a shorter life expectancy than non-smokers. Those who use tobacco will pay higher life insurance premiums than those who don’t.
Lifestyle
Mountain climbers and skydiving enthusiasts are more likely to have fatal accidents. Life insurance companies charge rates accordingly.
Family health history
There are health conditions that are known to be hereditary. Diseases such as heart disease, diabetes, and blood clots are known to be passed on from generation to generation. Insurance applicants with families that are known to have these traits will also pay higher life insurance rates.
Now that we covered what affects term life insurance rates, we’ll review what doesn’t.
What factors don’t impact your life insurance premium?
There are certain things about the applicant specifically that do not have any impact on life insurance premiums.
Ethnicity and race: These factors will not be considered when you purchase life insurance as it is considered discriminatory and, therefore, not allowed.
Sexual orientation: This is another element of diversity that insurance companies are not allowed to consider when determining rates for life insurance policies.
Credit scores: The insurance company will look at your credit score going back seven years. Even though your credit score will not affect the financial risk to insure, if they see a bankruptcy, that will be considered a higher risk. Your monthly life insurance premiums will be adjusted accordingly.
Having multiple life insurance policies: If you have more than one life insurance policy, you need to disclose that information. A life insurance company will ask you to justify having multiple life insurance policies, but they will not deny or increase your rates because of it.
Marital status: A life insurance company will not determine life insurance costs based on marital status as it would be considered a discriminatory action.
How many beneficiaries do you have: The number of beneficiaries you name will not affect your life insurance cost.
The average cost of term life insurance by age
One of the characteristics that life insurance products emphasize is the applicant’s age. The younger you are, the more affordable life insurance is. These are some examples of term insurance quotes based on age.
Life insurance coverage is much more affordable for younger people. Having said that, even at a later age, you can still purchase coverage to provide a financial safety net for your family.
The average cost of term life insurance by gender
Whether you are getting a life insurance quote for term insurance or whole life insurance, your gender will play a factor. Life insurance companies use actuarial life tables to assess the probability of death at different ages. On the average, men tend to live shorter lives than women. Men can then expect to pay slightly higher premium amounts when they buy life insurance.
| Coverage | Premium for Male | Premium for Female |
| $100,000 | $12.32 | $9.81 |
| $250,000 | $19.57 | $14.62 |
| $750,000 | $44.55 | $31.73 |
| $1,000,000 | $54.18 | $38.70 |
Methodology: The chart above reflects average life insurance premiums for a 32-year old male and female, non-smokers, in a standard health classification, buying a term life insurance policy with a 20-year length. Prices in the table are determined by internal actuarial rate tables for Canada’s top life insurance carriers that offer policies through the WizLife marketplace.
Regardless of gender, a term life insurance policy is an affordable way to fill your life insurance needs and protect your family’s financial future.
The average cost of life insurance by term length
When purchasing life insurance, one of the most important features of the policy you will purchase is the length of the term you will be covered for. Term life insurance plans are typically offered in term lengths of five to 20 years. Term life insurance products are meant to cover a need for a specific amount of time only.
Here are a few examples of costs for term life insurance based on different term lengths for $500,000 in coverage for a 32 year old, non-smoker, healthy male.
| Age | Premium |
| 10 years | $22.45 |
| 15 years | $25.56 |
| 20 years | $31.14 |
| 25 years | $42.02 |
| 30 years | $50.80 |
Methodology: The chart above reflects average life insurance premiums for a 32-year old male, non-smoker, in a standard health classification, buying a term life insurance policy with $500,000 in coverage. Prices in the table are determined by internal actuarial rate tables for Canada’s top life insurance carriers that offer policies through the WizLife marketplace.
The average cost of life insurance by coverage
insurance quotes to give you an illustration of the cost and the coverage amount.
Here are a few examples of costs for term life insurance based on different coverage amounts for a 20-year term for a 32-year old, non-smoker, healthy male.
| Coverage amount | Premium |
| $100,000 | $12.32 |
| $250,000 | $19.57 |
| $500,000 | $31.14 |
| $750,000 | $44.55 |
| $1,000,000 | $54.18 |
Methodology: The chart above reflects average life insurance premiums for 32-year old male, non-smoker, in a standard health classification, buying a term life insurance policy with a 20-year length. Prices in the table are determined by internal actuarial rate tables for Canada’s top life insurance carriers that offer policies through the WizLife marketplace.
A life insurance policy provides financial security for your family. Term life insurance offers affordable coverage amounts at a reasonable rate.
The average cost of life insurance for children
Life insurance for children is a bit controversial. For one, most people think it’s illogical to buy life insurance for children. They are so young and have their whole lives ahead of them; why do they need life insurance? There are significant advantages to buying life insurance for your kids, and one of the biggest is the cost of life insurance for them. Since they are so young, it costs very little to insure them. For instance, you could pay just $3 per month for $10,000 in coverage. When your child turns 25, they could convert the policy into a standalone policy with $250,000 in coverage. This would give them a great foundation to start their adult life with financial security.
Here are some examples of coverage and premium amounts:
| Age (1) | $5,000 | $10,000 | $20,000 | $30,000 | $35,000 |
| 0 | $4.06 | $5.69 | $8.67 | $10.81 | $12.53 |
| 1 | 4.09 | 5.74 | 8.82 | 11.04 | 12.81 |
| 2 | 4.11 | 5.79 | 8.97 | 11.26 | 13.10 |
| 3 | 4.13 | 5.84 | 9.13 | 11.49 | 13.38 |
| 4 | 4.15 | 5.89 | 9.28 | 11.71 | 13.67 |
| 5 | 4.17 | 5.94 | 9.43 | 11.94 | 13.95 |
| 6 | 4.20 | 5.99 | 9.59 | 12.16 | 14.23 |
| 7 | 4.22 | 6.04 | 9.74 | 12.39 | 14.52 |
| 8 | 4.24 | 6.09 | 9.89 | 12.61 | 14.80 |
| 9 | 4.26 | 6.14 | 10.04 | 12.83 | 15.09 |
| 10 | 4.29 | 6.19 | 10.20 | 13.06 | 15.37 |
| 1 | 4.31 | 6.23 | 10.35 | 13.28 | 15.65 |
| 12 | 4.52 | 6.64 | 11.19 | 14.50 | 17.13 |
Age means the age attained by the child as of the first Premium Due Date.
Methodology: The chart above reflects average life insurance premiums for children of age (as of the first Premium Due Date) in a standard health classification, buying a term life insurance policy. Prices in the table are determined by internal actuarial rate tables for Manulife’s Early Start Child Term Life™.
Some things to know about life insurance for children are:
- The owner of the policy is the parent, grandparent, or guardian.
- Insurance providers typically write policies for children as young as 14 days old. The maximum age for a child’s policy can be as high as 24years old with some carriers.
Insuring your children is a prudent way to ensure you will not have to struggle with finances related to their untimely death.
Insuring your children is a prudent way to ensure you will not have to struggle with finances related to their untimely death.
Life insurance per month for couples
A joint life insurance policy pays out a death benefit to the surviving spouse in the event of one spouse’s death. A joint first-to-die policy is a type of policy that pays out a death benefit to the survivor if either spouse passes away first. A joint last-to-die policy covers up to two family members and pays out the death benefit upon the death of the second person. This type of policy is ideal for estate planning. Although it is not common to buy joint life insurance, it may be advantageous at times. The cost to buy a life insurance policy that covers a couple may offer some discounts. Sometimes it is cheaper to buy a joint policy than to buy two separate policies. Here are some premium examples of joint life insurance plans. Most joining policies are permanent whole life insurance policies, although there may be niche carriers who offer term life policies as well.
Average term life insurance rates for seniors
Seniors looking for life insurance coverage will be pleased to find that even at a later stage of life, there are life insurance products available. There are life insurance companies that specialize in providing coverage for seniors.
Here are some examples of term life insurance costs based on age:
| Age | Premium |
| 50 years old | $22.14 |
| 55 years old | $33.84 |
| 60 years old | $55.62 |
| 65 years old | $91.62 |
Methodology: The chart above reflects average life insurance premiums for males, non-smoker, in a standard health classification, buying a term life insurance policy with a 10-year length for $100,000 in ceovarge. Prices in the table are determined by internal actuarial rate tables for Canada’s top life insurance carriers that offer policies through the WizLife marketplace.
There are many purposes for life insurance at a later age. One of the most common uses is to take care of funeral expenses. Their loved ones at least won’t have to struggle with finances when they pass away.
Cost of permanent life insurance
You can expect the cost for a permanent life insurance policy to be higher than for a term life insurance policy. As it is with term life insurance, there are several factors that affect the premiums for a permanent life insurance policy. How much life insurance you need, age, gender, health, and other conditions will affect permanent insurance premiums.
Source: https://www.capitalplanning.ca/alberta-school-board-employees/insurance/term-life-insurance
Although the cost of permanent life insurance is higher as compared to term life insurance costs, keep in mind that with a whole life insurance policy, you are building up cash value in the policy.
Frequently asked questions
Q1. How much does a $100,000 life insurance policy cost per month?
The average cost for a $100,000 life insurance policy will vary based on many factors.
The average monthly premium cost of term life insurance for a male, non-smoker, 20-year policy of $500,000 is $22.45 or $31.14 for a 20-year policy, as of September 2022.
Q2. What is the cost of a $1,000,000 life insurance policy in Canada?
The cost of a 20-year term life insurance policy with one million dollars coverage for a 32-year-old male costs an average of $54.18 a month and $38.70 for a female, as of September 2022.
Q3. What is the average life insurance cost per month in Canada?
The average cost of insurance in Canada for a 20-year-term policy with a $500,000 death benefit is $49.54 for a 40-year-old male and $36.49 for a female of the same age, as of September 2022.
Q4. How much life insurance can you get for $9.95 a month?
For about $10 dollars a month, a 32-year-old female non-smoker in good health can get a $100,000 term policy with a 20-year term.
Q5. What affects the premium rates of my term life insurance?
The premium rates of life insurance are affected by age, gender, smoker status, health grade, lifestyle, and occupation. Those are the primary factors that impact how much you will pay for life insurance.
Conclusion
The cost of term life insurance policies in Canada is relatively affordable. There are many good insurance companies you can choose from to get the best life insurance rates to fit your needs. Investing in a good insurance policy to protect your family in the event of your death is a prudent step to take. If you are the primary, or only, wage earner in the home, it is particularly important to make sure your family has a financial safety net.
Your next step should be to speak with a licensed insurance professional who can guide you through the many plans available.
Get in touch with us today.