While some may consider age just a number, it’s a fact that as we grow older, our health can change, prompting a shift in our life insurance needs. Many of us start seeking affordable life insurance options to protect our family’s future, leave behind a legacy for loved ones, and cover funeral expenses. Even if you’re over 50, numerous choices are still available for purchasing life insurance.
In this article, we’ll explore the best life insurance policies and the best life insurance companies for seniors in Canada. We will also share some tips on how to choose the right life insurance policies for seniors in Canada.
Whether planning for final expenses, aiming to leave a lasting legacy, donating to your favourite charity, or ensuring your loved one’s financial well-being, this guide will empower you with the knowledge to make informed decisions.
Best Life Insurance Policies for Seniors in Canada
Life insurance for seniors in Canada serves as a lifeline for individuals without savings or burdened by debts and those with dependents who rely on their financial support. This type of coverage offers essential financial security for Canadians typically aged 50 and older, particularly those dealing with pre-existing medical conditions that might otherwise disqualify them from traditional life insurance.
If you’re over 60 and seeking the best life insurance for seniors in Canada to leave a tax-free financial legacy for your loved ones, you’re in luck. Canada has numerous insurance policies specially designed to offer Canadian seniors competitive and comprehensive life insurance coverage.
Term Life Insurance for Seniors: Flexibility and Affordability
Term life insurance offers flexibility in coverage duration tailored to your specific needs. You can select the policy duration, with 15 years being a popular choice. This option is often the most cost-effective for seniors, though age-related restrictions may exist on the available term lengths.
If you’re seeking an affordable life insurance solution, especially as you approach or enter retirement age, term life insurance can provide essential financial security for your family while fitting within a limited budget.
Whole Life Insurance for Seniors: Best for Estate Planning
Whole life insurance for seniors offers coverage for your entire lifetime, remaining active as long as you keep up with the premiums.
A portion of your payments is set aside in a savings or investment component, giving these plans a cash value feature. However, it’s worth noting that whole life insurance for seniors can be costly and have restrictions, particularly when accessing the cash portion.
Whole life insurance is a great choice if you want to cover end-of-life expenses with the assurance that your coverage won’t expire. It also works well for meeting permanent financial commitments, such as providing for a disabled child after your passing.
No Medical Life Insurance for Seniors: A Reliable Backup Plan
No medical life insurance, often called simplified issue life insurance, offers coverage without needing a medical examination. Instead, you’ll typically answer a few basic health questions, and that’s it.
But convenience comes at a cost; premiums for no medical life insurance for seniors in Canada can be quite high.
This type of insurance is ideal if traditional life insurance providers have turned you down and you still need coverage. Think of these policies as your ‘Plan B’ when traditional options aren’t available.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance, often referred to as ‘guaranteed acceptance life insurance,’ is a type of policy that provides coverage to nearly everyone, regardless of age or health status.
While it guarantees approval, it’s important to note that premiums for guaranteed issue life insurance for seniors tend to be the most expensive, and the coverage amount is limited.
This type of insurance is most suitable if you’ve faced rejections from traditional insurers and other no-medical-exam options. Guaranteed issue policies typically offer smaller payouts and come with a waiting period of at least two years. If you were to pass away during this waiting period, the policy won’t pay out the full benefit, but the premiums you’ve paid will be returned to your estate.
Best Life Insurance Providers for Seniors in Canada
Selecting the right life insurance policy is a significant decision at any stage of life, but for seniors in Canada, it is also important that you select the right life insurance companies for your insurance needs.
There are many life insurance providers in Canada, but some offer better and more affordable coverage for seniors. Here are the top five Senior Life Insurance Providers in Canada.
1. Sun Life
Based in Toronto, Sun Life Financial is Canada’s oldest insurance company, with over 150 years of experience in the insurance industry. The company has since evolved into offering wealth solutions and custom health plans for its clients.
In addition to health insurance and life insurance, it also offers wealth management services. Customers across North America, Asia, and the United Kingdom use the company’s products and services.
2. Manulife Financial Corp
Manulife Financial (MFC) is one of Canada’s largest insurance and financial services companies. In its second year on Forbes’ list of the World’s Best Employers, Manulife demonstrated that it builds a culture that supports its mission to help people make better decisions.
Manulife operates in Europe, Asia, Canada, and the United States through its subsidiary John Hancock.
RELATED: Manulife Life Insurance Review (Updated 2024)
3. Canada Life
Canadian Life Insurance Company, called Canada Life, is Manitoba’s largest financial services and insurance company. Founded over 170 years ago, the company has a solid and stable financial history. The company offers various insurance services, including life, critical illness, disability, and health.
4. Canada Protection Plan
With no medical exam and simplified issues, the Canada Protection Plan offers a wide range of life insurance products. The Foresters Financial Company and Canada Protection Plan were approved to merge on Oct. 2, 2020.
You can obtain life and critical illness insurance through more than 25,000 licensed advisors across Canada at no additional cost through the Canada Protection Plan.
RELATED: Canada Protection Plan Life Insurance Review (Updated 2024)
How Much Does Life Insurance for Seniors Cost in Canada?
The cost of life insurance for seniors and elderly parents in Canada depends on various factors like age, gender, term length, and health. Typically, as you get older, your premiums increase. So, it’s smart to secure your rate sooner rather than later.
Life Insurance for Seniors Over 50 in Canada
You might not be considered a senior just yet, but as you approach retirement, having a financial safety net in place for your loved ones is crucial. You might still have debts like a mortgage or car loans, making it a good idea to have at least a small life insurance policy. The good news is that most insurers don’t require a medical exam if you’re under 60 and applying for coverage under $500,000.
Life Insurance for Seniors Over 60 in Canada
Life insurance is a smart choice if you’re in your 60s and looking to take care of smaller outstanding debts. You’re likely entering retirement, which means you may not have an active income. Having life insurance ensures your loved ones can keep your family home if something happens.
Life Insurance for Seniors Over 70 in Canada
Life insurance can be quite expensive for those over 70. At this age, it’s often used to cover final expenses or leave something behind for beneficiaries. Seniors in their 70s typically don’t have significant debts, and their assets may outweigh what they owe. While prices go up, you might not need as much coverage or a long policy term, which can keep your monthly premiums comparable to those in their 30s or 40s looking for longer-term coverage.
Life Insurance for Seniors Over 80 in Canada
Once you reach 80, securing life insurance becomes challenging. There are two main options for 80-year-olds. Firstly, final expense insurance, often for smaller payouts (up to $50,000), is available but tends to be more expensive. Secondly, you can convert an existing term life insurance policy into a permanent one. However, you must do this before the age limit set by your insurer, which is usually around 75. Remember that the older you are, the more expensive the conversion will be. Additionally, some life insurance providers may not issue term policies after you turn 75.
For seniors over 70, especially in your 70s, you may need to complete a medical exam when applying for a term life insurance policy due to the higher risk associated with insuring older individuals. This exam typically includes checking your vitals and fluids, obtaining an Attending Physician Statement (APS), and conducting an Electrocardiogram (EKG).
Benefits of Life Insurance for Seniors in Canada
Senior life insurance in Canada offers a range of advantages for seniors. Here are some key benefits:
- Covering Final Expenses: The costs associated with your final expenses can be substantial. However, a senior’s life insurance policy can shield your family from shouldering these expenses. This type of insurance helps cover funeral costs and other related expenses, ensuring your loved ones are not burdened.
- Supporting Causes You Care About: Many individuals wish to leave a meaningful legacy. Senior life insurance in Canada, especially for those over 60, allows you to contribute to causes close to your heart. By choosing this option, you can ensure that your values live on even after your passing, supporting vital programs.
- Settling Outstanding Expenses: Life insurance steps in to prevent your family and friends from being responsible for your medical and funeral bills. Additionally, it provides the necessary funds to clear any outstanding debts such as mortgages, rent, or unpaid loans, offering financial security to your beneficiaries.
- Providing for Loved Ones: Planning for the well-being of your loved ones even after you’re gone is a wise choice. A life insurance policy is a valuable financial resource for your family, offering financial support when you cannot provide it.
How to Choose The Right Life Insurance for Seniors in Canada
Selecting the right life insurance policy is a significant financial decision, especially since specific health issues don’t limit coverage. So, how can you determine the best policy for your needs? Here are the steps to consider when deciding on the type of life insurance that suits you:
Step 1: Estimate Your Insurance Needs: When planning for your financial future, it’s crucial to take your family’s needs into account. Consider how much financial support they’ll require in your absence.
The ideal life insurance amount depends on your savings, investments, and your family’s living expenses. Be sure to factor in any outstanding debts like mortgages, student loans, lines of credit, or car loans.
However, every senior’s insurance needs are unique. For instance, someone with a substantial estate may have different requirements than a retiree with a steady pension or annuity.
Step 2: Find the Right Insurance Advisor: Choosing the right insurance advisor is another critical step in selecting senior life insurance. Opt for an advisor who specializes in the needs of older individuals.
Seek referrals from friends, family, and colleagues who have worked with insurance advisors. It’s often a good idea to interview multiple advisors to find the one that best fits your requirements.
Arrange a meeting to discuss your specific needs, and don’t hesitate to ask questions about coverage for yourself, your spouse or partner, and any other dependents.
Step 3: Prepare for Application Questions: Before you can secure any life insurance policy, you’ll need to answer questions about your finances, medical history, and lifestyle choices. Preparing for these questions in advance is essential to ensure a smooth application process.
Thoughtfully prepared answers can highlight your strengths and give the insurer good reasons to accept you as a customer.
What Factors Affect The Cost of Life Insurance For Seniors in Canada
Understanding what factors affect the cost of life insurance for seniors is essential to finding a policy that fits your budget. Below are some of the factors affecting senior life insurance rates in Canada:
- Age: Age is the most apparent factor that life insurance companies use to determine premium prices. For example, you’ll be more expensive to insure if you’re over 65 than if you’re over 50. The main reason is that, as you age, your likelihood of dying during your term increases. The rate you will be offered will vary depending on your age when you seek a life insurance policy.
- Coverage Amount: Your choice of coverage is one of the significant factors in determining your insurance rate. The coverage amount is how much the insurance company will pay out after you die. However, the amount of coverage you purchase will depend on your needs. You’ll pay more if you want more coverage.
- Smoking Status: Smoking causes poor circulation, which can result in circulatory diseases such as heart disease and stroke. Life insurance companies will determine that you are at a greater risk of cardiovascular disease than someone who does not smoke. This means smokers will pay higher premiums than non-smokers when purchasing life insurance.
- Health Status: Health is a very relevant factor affecting life insurance rates. The healthier you are, the cheaper your premium will be. Life insurance rates are subsequently high for people with chronic illnesses or unhealthy behaviours. Therefore, it’s worth looking into if you have a history of certain illnesses but haven’t been diagnosed in several years.
Final Thought on Best Life Insurance for Seniors in Canada
Finding the best life insurance for seniors in Canada is a crucial step in securing your financial future and ensuring peace of mind for you and your loved ones. With the right policy in place, you can enjoy your retirement knowing that your family is protected.
If you’re ready to explore your options and make an informed decision, don’t hesitate to contact our advisors. We’re here to guide you through the process and help you find the perfect life insurance solution tailored to your needs.
FAQs on Best Life Insurance For Seniors in Canada
How much does life insurance for seniors in Canada cost?
Seniors’ life insurance costs vary according to their circumstances. However, it’s important to remember that every situation is different, and your best choice is to speak to an insurance advisor who is an expert in senior life insurance quotes.
Can you get life insurance if you are 80 years old?
Yes, seniors over 80 can purchase life insurance. However, the only type of policy usually available is the whole life.
Does life insurance get more expensive as you get older?
Premium rates typically increase by 8% to 10% for every year of age. They can be as low as 5% for people in their 40s but as high as 12% for people over 50.
What is the oldest age you can get life insurance?
Some companies set their maximum issue age at 80 or 75, and very few will issue an insurance policy past the age of 85.
