Most googled questions about life insurance in Canada: ANSWERED

When it comes to buying coverage, Canadians have plenty of questions, and for good reason. Understanding life insurance can feel complex, especially when you’re just getting started. 

That’s why we’ve gathered the most googled questions about life insurance in Canada and provided clear, straightforward answers you can trust. From eligibility and medical exams to coverage options and policy types, this guide breaks down what Canadians search for most when exploring life insurance.

We’ll address the most common questions Canadians have about life insurance, helping you navigate the key considerations and decisions.

In this guide, we’ll cover the questions people ask before buying, during the application process, and after getting insured, so you can make confident, informed decisions about your coverage.

What is the first step for getting a life insurance policy?

When you consider getting a life insurance policy, the first thing to determine is how much life insurance you need. You can calculate your life insurance needs using the DIME method, which factors in Debt, Income, Mortgage, and Education expenses. Once you know how much you need, you need to figure out what type of policy you can afford. 

You will also need to see if you qualify for the policy based on factors like your age, health, and the insurer’s requirements. For example, term life insurance gives you much more coverage than permanent insurance for the same monthly premium. However, if building up a cash value savings component is important, you might consider a permanent policy.

When applying for a new policy, keep in mind that the size and approval of your coverage will depend on your income, age, and the insurer’s guidelines.

Can you use life insurance while alive?

Yes, you can use your life insurance policy while you are alive. This is one of the most misunderstood aspects of life insurance. Life insurance, in fact, is more than just a death benefit. Term life insurance has riders you can purchase, such as critical illness and disability insurance, so you can use them as a living benefit.

 Permanent life insurance builds up a cash value you can borrow to buy whatever you need. Some people use the cash value from permanent life insurance to supplement their income during retirement. Permanent insurance policies remain in place as long as the premium is being paid and have a cash value that increases over time.

What is the two-year waiting period for life insurance?

Many life insurance policies have a mandatory two-year waiting period from the date of purchase before the death benefit can be paid out; this is called the contestability period. If you die within two years of taking out the policy, your beneficiaries will not receive any benefits. 

Insurers will use a contestability period to prevent fraud due to the insured’s dying of underlying causes that would typically not be insured at all. Additionally, group life insurance from an employer can be lost if the employee changes jobs.

Can you get life insurance on your deathbed?

No. Terminally ill people will not be able to get insurance.

Can someone take out a life insurance policy on me without my knowledge?

No, for anyone to buy life insurance on you, they must obtain your consent and participation. 

What is considered high risk for life insurance?

When it comes to life insurance, many factors play into whether or not you’re considered high-risk. If you’re young and healthy, you’re usually not regarded as high-risk and can get lower rates.

People who have dangerous jobs, such as coal miners, commercial fishers, hunters, or hobbies (like skydiving or rock climbing), are generally considered high-risk. This is because there’s a greater chance that something could happen to them, and they would need to make a claim on their life insurance policy.

Insurers also take into account your medical history when determining your rates. If you have any pre-existing medical conditions, such as cancer, diabetes, heart disease, and other conditions that lead to premature death, you may be classified as high-risk. This is because your condition could lead to an early death, which would result in a payout from the life insurance policy.

Lastly, your lifestyle choices can also impact your life insurance rates. Things like smoking and drinking heavily can make you high-risk in the eyes of insurers. Your smoking status is a major factor in determining your premiums, and non-smokers often receive lower rates.

Your age, health, lifestyle, and occupation may all be considered when determining your rates. If you think you may be regarded as high-risk, it doesn’t mean that you won’t be able to get life insurance. It just means that you may have to pay higher premiums than someone who isn’t considered high-risk.

How much does the average person have in life insurance?

According to the Canadian Life and Health Insurance Association 2021 report, 22 million Canadians own $5.1 trillion in life insurance coverage. The average life insurance protection per household in Canada is $442,000. The Canadian life insurance industry has a claims payout rate of about 99%.

Does life insurance pay for funeral costs?

Yes, there are life insurance policies specifically issued to cover final expenses. 

Can you cash out a life insurance policy before death?

Yes, permanent life insurance policies have two ways to cash out. The first option is to surrender the policy. The second way to cash out is to borrow money against the cash value accrued.

What do life insurance blood tests detect?

When you apply for life insurance, the insurer will require you to take a medical exam to determine your insurability. Part of this exam involves giving a blood sample, which will be tested for various markers that indicate your health status.

Simply put, the life insurance blood tests detect how much risk you pose to the insurance company. The company will determine whether to offer you coverage and at what rate based on your results. Blood tests will indicate if the applicant has indicators of high-risk conditions such as:

• • high Cholesterol

• • high glucose levels

• • high blood pressure

• • nicotine use

• • drug use

What questions do life insurance companies ask?

When you apply for insurance, the insurance company will ask about your health, occupation, and lifestyle. The insurance company will want to know about any current health conditions, past illnesses, and prescriptions you may be taking. They will also want to know what your occupation is to determine if your work can lead to disease in the future or has the risk of death.

Your lifestyle is also essential when assessing risk to the insurer. For example, people who skydive or do freestyle rock climbing are at a higher risk to insure, and the company will need to factor that into the policy. Underwriting can result in an application being instantly approved or requiring a medical exam based on the initial assessment.

Do insurance underwriters talk to customers?

No, underwriters will only speak with personnel inside the insurance company. 

Do you have to wait two years for life insurance to become effective?

Not all life insurance policies require this two-year waiting period. Many policies are effective immediately after the policy is issued.

What if I lie about smoking for life insurance?

Misrepresenting the truth when you apply for insurance can put you at risk of having your claim denied when you die. Insurance companies carefully review claims and if they find that you’ve lied about your health history, they may refuse to pay the death benefit. That means your beneficiaries would get nothing in the event of your death. 

What prescriptions cause life insurance denial?

Each insurance case and company is unique when evaluating risk based on medications used by the applicant. However, here is a list of medications that would be red flags for the insurance company and may cause it to deny your application:

• • Hydrocodone, oxycodone, morphine – Opioids

• • Xanax (alprazolam), Ativan (lorazepam) and Valium (diazepam) – (Benzodiazepines) – Anxiety medications

• • Lithium and Divalproex – Bipolar medications

• • Paxil (paroxetine), Lexapro (escitalopram), Celexa (citalopram), Zoloft (sertraline) – Antidepressants

• • Plavix (clopidogrel) – Coronary artery disease medication

• • Arimidex (anastrozole) or tamoxifen – Breast cancer medications

• • Naltrexone, Campral or Antabuse (disulfiram) – Alcohol abuse medications 

• • Harvoni, Sovaldi, and Viekira Pak – Hepatitis medications 

• • Atripla and Genvoya -HIV medications.

Any of these medications will cause the insurance company to take a closer look at the underlying conditions they treat and, in most cases, be a cause for denial of insurance coverage.

Can insurance companies ask for bank statements?

Yes, insurers may request copies of your bank statements if they deem it necessary. It is rare, but it does happen. Your choices are simple: provide them with the requested documents or go elsewhere for your insurance. 

Can you get in trouble for lying on a life insurance application?

Lying on your insurance application is not a legal offense. However, your coverage may be declined, or, worse, your claim may be denied, and your beneficiaries will not receive the death benefit.

What are they looking for in a urine test for life insurance?

Insurers request urine tests to find out if the applicant uses drugs, smokes, or has other health conditions such as kidney disease. 

Do life insurance companies contact beneficiaries?

Life insurance companies will contact the beneficiary if a claim is filed.

Can you be denied life insurance for anxiety?

Each insurance company has its policies and criteria for insurance approval. Although there is no general rule for anxiety, it does fall under the category of mental illnesses, and it could be a cause for denial of coverage.

What medical conditions affect life insurance?

Common conditions that have an impact on life insurance are high cholesterol, cancer, obesity, high blood pressure, and mental health conditions.

Does depression affect life insurance?

Yes, depression is considered a mental health condition that insurance companies take into account when evaluating an insurance application.

Can you be denied life insurance for pre-existing conditions?

Yes, many policies will be denied if you have pre-existing conditions.

What pre-existing conditions are not covered?

The following list of conditions are typically not covered if they are pre-existing before applying for new coverage:

• • high cholesterol

• • asthma

• • diabetes

• • depression

• • cancer

• • high blood pressure

• • obesity

• • epilepsy

• • heart disease

What kind of blood work is done for life insurance?

Life insurance blood tests are standard lab work to determine if the applicant has certain disease-related conditions.

How does high blood pressure affect life insurance rates?

High blood pressure increases the insurance company’s risk, and your rates will be higher.

Why do they test urine for life insurance?

Life insurance companies want to insure applicants and offer them rates appropriate to the risk they present. A blood test helps assess the applicant’s health condition and determine the risk level.

How do you pass a life insurance blood test?

You can increase your chances of an acceptable blood test by avoiding activities that increase the number of elements in your blood tests that could cause concern. Here is a short list:

Avoid fatty and salty foods a few days before the exam;
drink lots of water;
and don’t drink coffee or smoke before the exam.

Does high cholesterol affect life insurance?

Applicants with high cholesterol will pay higher insurance rates.

What do life insurance companies test blood tests for in Canada?

Diseases that blood tests reveal include sexually transmitted diseases, HIV and AIDS, low levels of triglycerides, and high cholesterol.

Why do life insurance companies do blood tests?

Life insurance companies want to insure applicants and offer them rates appropriate to the risk they present. A blood test helps assess the applicant’s health condition and determine the risk level.

Do you need a health check for life insurance?

Not all life insurance requires a health check or medical exam. You can buy a guaranteed issue or simplified issue policy, neither of which will require a medical exam. To be eligible for some of these policies, you must be a Canadian resident. Such policies are designed for people who may not qualify for traditional coverage due to health issues.

Do all life insurance companies require a physical exam?

Some life insurance companies will require you to have a physical exam before they will issue a policy, while others will not. Whether or not you are required to have a physical exam will likely depend on several factors, including your age, health history, and the amount of coverage you seek.

If you are healthy and do not have any major health concerns, you may not need to take a physical exam to get life insurance. However, if you have health issues or are concerned about your health, it is probably worth getting a physical exam. Each life insurance company has its underwriting guidelines, so it’s important to shop around to find the right fit for you.

How do insurance companies know about pre-existing conditions?

A life insurance company will learn about pre-existing conditions by asking questions during the application. Many policies also require a medical exam that may include blood work and urine tests, which will also reveal underlying health issues. Insurance companies also request records from the Medical Information Bureau, a repository of information on insurance applicants that includes past health conditions.

What happens if you don’t disclose a pre-existing condition?

Your insurance application may be denied if you lie on it and the company finds out. Your beneficiary may also be denied the death benefit claim if the company contests the claim and finds out you misrepresented your health condition.

How long after quitting smoking can you get life insurance?

The best scenario to get good insurance coverage at a non-smoker rate is once you are tobacco-free for 12 months.

How much do you have to smoke to be considered a smoker?

In most cases, you are considered a smoker if you have smoked even one cigarette in the past 12 months.

What should I disclose for life insurance?

Be honest on the application, as any misrepresentation of facts could result in a denial of coverage. Insurers deny a claim if they believe you lied on your application – for example, if you failed to disclose a pre-existing medical condition.

If you do find yourself in the unfortunate situation of having your life insurance claim denied, don’t give up hope. You may appeal the decision or file a lawsuit against the insurer. An experienced attorney can help you navigate this process and fight for the benefits you and your family deserve. 

The prudent answer is to disclose anything that, if found out later, would deny a claim payment. 

How long does it take for life insurance to pay out?

When the insured dies, and a claim is filed, the death benefit can be paid in a few weeks. Most life insurance policies have a clause that stipulates the insurer will pay out the death benefit within 30 days of receiving all the necessary documentation. However, there are a few things that can delay the payout of a life insurance policy. If you die within the first two years of your policy, it is possible that your beneficiaries will not receive the death benefit right away. This is because insurers typically have a two-year death waiting period within that time frame.

This waiting period gives the insurer time to investigate the cause of death and to make sure that it was not due to suicide or any other exclusionary clause in the policy. If it is determined that your death was due to one of these excluded causes, your beneficiaries will not receive the death benefit. However, if your death is ruled to be natural and not due to suicide or any other exclusion, your beneficiaries will likely receive the death benefit within a few weeks to a few months after your passing. 

If you have any questions about how long it will take for your life insurance policy to pay out, be sure to speak with your agent or representative. They can help clarify the timeline and ensure that your loved ones are taken care of in the event of your death.

Is your spouse automatically your beneficiary on life insurance?

In Canada, most life insurance policies allow the policyholder to name a specific beneficiary rather than having a default beneficiary like a spouse.

This means that you need to specifically name your spouse as the beneficiary for them to receive the death benefit from your policy. If you don’t name a specific beneficiary, the death benefit will usually go to your estate, which can then be distributed according to your will. However, some insurers do have default beneficiaries, so it’s always best to check with your insurer to find out their specific policies.

Except in Quebec, the beneficiary’s spouse is automatically considered an irrevocable beneficiary. However, the policy owner can change the beneficiary with the spouse’s consent.

What are 10 things you absolutely need to know about life insurance?

The most googled questions about life insurance in Canada – Conclusion

Learning the answers to the most googled questions about life insurance in Canada is the first step toward making confident financial choices. Whether you’re wondering how policies work, what affects your premiums, or how to choose the right type of coverage, understanding these essentials can help you protect your loved ones and plan for the future.

If you’re ready to take the next step, it only takes a few minutes to see your options. Get a free life insurance quote at Oneday and find the coverage that fits your needs today.