Cost of term life insurance in Canada: Example rates and factors

Understanding the cost of term life insurance in Canada helps you balance affordability with adequate protection. Term life coverage offers financial security for your family at a fraction of the cost of permanent insurance, but your rate depends on key factors such as age, health, and lifestyle. The cost of term life insurance in Canada can range from $15 to $300+ per month, depending on these factors.

In this guide, you’ll see how rates are determined, average monthly premiums by age and gender, and practical ways to lower your costs while maintaining sufficient coverage. Term life insurance is generally more affordable than whole life insurance, making it a popular choice for many Canadians.

How much does term life insurance cost in Canada?

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. Typically, younger and healthier applicants pay lower premiums for term life insurance. 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. In comparison, 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 monthly premiums. To better understand how premiums are calculated, let’s review how rates are determined.

How are life insurance rates determined?

The applicant’s life expectancy determines the cost of life insurance premiums. Insurance companies consider several characteristics of the applicant to calculate how long they are expected to live. Below are the primary factors that determine life expectancy and, by extension, life insurance costs. Insurance premiums typically increase as applicants age or develop health conditions.

Age

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. Women generally pay less for life insurance than men because they have a longer life expectancy.

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 will pay higher term life insurance rates. Healthier individuals generally receive lower life insurance premiums than those with health issues.

Occupation

The type of work the applicant does also carries different levels of risk. For example, an office worker carries a lower insurance risk 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

Some health conditions are known to be hereditary. Diseases such as heart disease, diabetes, and blood clots are passed on from generation to generation. Insurance applicants with families known to have these traits will also pay higher life insurance rates.

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 they are 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, you must 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 this would be considered discriminatory. 

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. 

Methodology: The chart above reflects average life insurance premiums for a female non-smoker in a standard health classification for a 10-year term life insurance policy with $250,000 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 marketplace.

Life insurance coverage is much more affordable for younger people. That said, 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 term or whole life insurance quote, 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 expect to pay slightly higher premium amounts when buying life insurance.

Methodology: The chart above reflects average life insurance premiums for a 32-year-old male and female, non-smoker, in a standard health classification, buying a 20-year term life insurance policy. Prices in the table are determined by internal actuarial rate tables for Canada’s top life insurance carriers that offer policies through the marketplace.

Regardless of gender, a term life insurance policy is affordable and can meet 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 is the length of the term you will be covered for. Term life insurance plans are typically offered in terms of five to twenty years. Term life insurance products only cover a need for a specific time.

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.

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 marketplace..

The average cost of life insurance by coverage

Term life insurance policies are sold in different amounts of insurance coverage. The cost of life insurance depends heavily on the coverage amount. Here are a few examples of term life 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, male, non-smoker.

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 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 marketplace.

A life insurance policy provides financial security for your family. Term life insurance offers affordable coverage amounts at a reasonable rate.

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 sometimes be advantageous. The cost of purchasing a life insurance policy that covers a couple may offer some discounts. Sometimes buying a joint policy is cheaper than buying two separate policies. 

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, life insurance products are available. There are life insurance companies that specialize in providing coverage for seniors. It is advisable to buy life insurance as soon as possible if you have a pre-existing condition to lock in lower rates.

Here are some examples of term life insurance costs based on age:

Methodology: The chart above reflects average life insurance premiums for a male, non-smoker, in a standard health classification, buying a term life insurance policy with a 10-year length for $100,000 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 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

The cost of a permanent life insurance policy is higher than that of a term life insurance policy. As with term life insurance, several factors 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. Whole life insurance premiums are usually higher compared to term life due to guaranteed payouts.

Although the cost of permanent life insurance is higher than term life insurance costs, keep in mind that you are building up cash value with a whole life insurance policy.

Cost of term life insurance – Conclusion

Term life insurance provides affordable, flexible protection for your family’s financial future. By comparing rates and applying early, you can secure large coverage amounts at minimal cost. Many insurance providers allow you to compare life insurance rates online. To explore your best options, get a personalized term life insurance quote with Oneday. Rates for eligible applicants are subject to underwriting and provincial regulations.

Frequently asked questions about term life insurance rates Canada

Sources:

Health Canada, “Tobacco and premature death”

Capital Estate Planning Corporation “What is Term Life Insurance“