October 2, 2023
How Much Is Life Insurance in Canada? [Average Cost for 2022]

The average cost of life insurance per month is between $15-$100 in Canada, according to policy advisor Erik Heidebrecht.

Life insurance can cost upwards of $200+ a month if you’re in your late 40s+ and/or higher risk.

Life insurance is probably more affordable than you think, but rates do depend on your age, gender, health, type of policy, and more.

We’ll look at each factor in this post and show you how they can impact the price of your policy.

How much is life insurance in Canada? Average rates for 2022

The average cost of life insurance per month in Canada is about $13 for $100,000 in coverage if you’re a healthy 30-year-old requesting a 10-year term life insurance policy with policy.

If you’re a 60-year-old smoker, your premiums will be over $100 per month for the same amount of coverage.

How much life insurance costs in Canada depends largely on your age. Monthly rates increase as you get older, as your risk to the insurer increases.

If you’re of average health for your age and your risk factor is low, your monthly premiums will be lower, too.

The chart below looks at the average cost of term life insurance by age from five leading Canadian life insurance solutions.

How insurers calculate the cost of your monthly premiums

Usually, Canadian life insurance companies will give you a quote based on your age, gender and smoking status.

Your quoted rate may change based on additional information you provide in your application, such as your family’s medical history.

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All in all, Canadian insurers use the following factors to calculate the cost of your monthly premiums.

  • Age
  • Gender
  • Smoking status
  • Health
  • Family health history
  • Risky job or lifestyle (yes: a skydiving habit will raise your rates)
  • The company’s expenses and number of past claims
  • The type of policy you buy (term or permanent)
  • How much you’re covered for ($100,000, $1M, etc.)
  • Term length (10, 20, 30 years, etc.)

Every life insurance company in Canada weighs these factors differently. This is why you can get different rates from different providers.

How much should your life insurance policy cost monthly?

A term life insurance policy should cost $38.84 a month on average in Canada for a 40-year-old non-smoking woman with $500,000 in coverage for 20 years.*

The same policy should cost $51.79 a month on average in Canada for a 40-year-old non-smoking man.**

For example, a whole life insurance policy will be a lot more expensive than a term policy.

Still, your life insurance rates in Canada will be higher or lower than the average based on factors such as:

  • Gender. Men pay more. Statistically, women live longer and are less risky to insure.
  • Age. The older you are, the more you’ll pay.
  • Smokers pay more due to the potential impact on their health.
  • Physical condition. The poorer your health, the more you’ll pay.
  • Medical history can impact your rates depending on the status of your condition and how well it’s being managed.
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In short, if you’re more likely to pass away prematurely, you’re riskier to insure and you’ll pay more for your term life insurance.

The good news: the policy has some of the most affordable term life insurance rates in Canada.

Why? Because we’re a digital provider with less overhead costs, while still being backed by insurance giant Canadian Premier.

What affects the cost of life insurance?

Let’s take a look at how average life insurance costs in Canada vary based on policy type, age, gender identity, smoking status, and lifestyle.

1. Policy type: average life insurance cost

There are two main types of life insurance policies you can buy in Canada: permanent and term life insurance.

Term life insurance tends to be more affordable than permanent life insurance (also called whole or universal life insurance).

In fact, permanent life insurance policies typically cost 5 to 10 times more than term life insurance in Canada.

  • Permanent life insurance covers you for your entire life and sometimes collects cash value through investments, but the premiums are much pricier.
  • Term life insurance covers you for you during the years you really need it, like when the kids are young or while you’re paying off debt. Terms typically come in the 10, 20, or 30-year time frame. It doesn’t have an investment component.

This table stacks up typical term versus whole life insurance rates in Canada.

Here’s our take on term versus permanent life insurance: life insurance is best used to replace your income if you pass away. It’s not necessarily the best way to help you invest your money.

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There are many more profitable ways to invest your money other than through a whole life insurance policy. Investment options like RRSPs and TFSAs will make more money for your loved ones if you pass early.

2. Age: average life insurance cost per month

Life insurance companies provide rates based on life expectancy and risk. As you age, the likelihood of your insurer having to pay out your policy increases, so your rates will also increase. That’s why it’s always more beneficial to get life insurance when you’re young.

The chart below shows how your age influences your monthly life insurance rates.

Generally, the cost of term life insurance will increase every year you get older, so the younger you are, the less your monthly premium will be.

Even though term life insurance has a fixed cost per month once you start your coverage, the cost of life insurance substantially increases during your late 40s, so the earlier you start, the better.

3. Gender: average life insurance cost per month

Your gender identity plays a small but important role, too.

According to a study by Harvard Medical School, women statistically live longer than men. Because of this, women pay less for their life insurance premiums.

Usually, typical policies are based on your self-identified gender instead of your gender at birth.

There isn’t yet an established protocol on gender for transgender applicants.

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