Life insurance is one of the most important financial products you can buy in Canada. Life insurance guarantees financial security for your family and dependents when you pass away.
How much is life insurance in Canada? What does life insurance cost in Canada? Everyone wants to know the cost to see if they can afford life insurance before they go through the application process.
However, the cost of life insurance in Canada is more affordable than most Canadians think. Though complicated, the cost of life insurance premiums is usually based on age, health status, and your specific needs.
So, what’s the right amount you should pay for life insurance premiums? Read on to find out more and get tips on how to find the best deals.
How Much Is Life Insurance In Canada?
The cost of life insurance in Canada is highly variable. It changes from person to person and depends on factors like age, health, gender, lifestyle, policy length, etc.
These factors influence your life expectancy and can determine how much you will pay for a life insurance policy.
The average cost of the monthly premium for a 10-year term policy for a healthy 30-year-old Canadian could cost around $13 for a $100,000 coverage.
However, a 60-year-old smoker can expect an average monthly premium of $100 for $100,000 coverage.
Assuming that you will pay the average cost of a life insurance policy in Canada is unrealistic. Compare quotes from the best insurance companies like Manulife and get a glimpse of how much is life insurance in Canada.
Generally, how much is life insurance in Canada depends on your age and health status. The younger and healthier you are, the less monthly life insurance premiums you will have to pay.
What Influences The Cost Of Life Insurance In Canada?
The cost of a life insurance premium depends on any additional information your insurer collects from you.
Anything that increases your risk of death increases the cost of your insurance policy. Insurance companies charge higher premiums to riskier customers.
Some of the critical factors that influence the cost of life insurance policies that most insurance companies look at include:
Your age is the single most crucial factor determining how much your life insurance premiums will be. The younger you are, the cheaper the premiums you will have to pay.
Generally, life insurance is cheapest when you are young and very healthy; your insurer assumes that your risk of death is low.
For example, if you buy a permanent life insurance policy in your 20s or early 30s or purchase life insurance for your young child. In that case, there is a good chance that you will pay premiums over a more extended period, and the cost and risk spread out nicely throughout your life expectancy.
However, the older you are, no matter how good your health is, you will always have to pay more premium than a younger person, all things being equal.
Your health status is another major factor that can influence the cost of your life insurance policy. A healthy lifestyle benefits your body and also benefits your life insurance premiums.
If you are in a poor health condition or at much risk of poor health, your monthly premiums will be higher than those in a good health condition.
Insurance companies usually reward healthier applicants with lower premiums because they are likely to live longer and have less risk of death.
Insurers get your health status by asking health-related questions and may also require a medical exam, request an attending physician statement, or access to your medical records. However, some life insurance products do not require any medical exams.
Insurers usually ask questions like whether you have any pre-existing medical condition, a history of critical conditions, or a family history of any illness. This information and your medical exam will help your insurer determine your risk rating and use it to determine the cost of your life insurance.
Among the health factors considered by your insurance company, your smoking status is a significant factor.
Smoking is terrible for your health and wealth and is a huge red flag for insurers because smokers have a shorter lifespan than non-smokers.
Being a smoker will significantly increase your premium and might cause it to even double in price. However, if you can stay 12 months without smoking, some insurance companies do not consider you a smoker, reducing your life insurance costs.
People involved in vaping and smoking cannabis are also considered smokers.
In Canada, gender plays a small but also significant role in determining the cost of your life insurance premium.
The life expectancy for women in Canada is 84 compared to men, who have a life expectancy of 80. As a result of this difference, life insurance premiums for women are lesser than for men.
Usually, women pay 10-25% lesser than men.
Occupation and Hobbies
How and what you spend your time will also determine your life insurance costs. Insurance companies look at the kind of occupation you do and what hobbies you enjoy.
Each insurance company has its rules and methods for determining risk. The higher your occupation and hobby risk, the higher you will pay for life insurance.
Canadians with dangerous occupations like roofers, miners, manual laborers, drivers, etc., have a higher risk of death within a given term and will be charged higher life insurance premiums.
People with high-risk hobbies or any hobby that increases the chance of dying an unnatural cause, like surfing, scuba diving, skydiving, rock climbing, etc., will have a higher life insurance premium.
Other Factors That Can Influence The Cost Of Life Insurance
Aside from your age, health, and smoking status, other factors can influence the cost of your life insurance policy.
Other factors like the policy’s term length, the company’s expenses and the number of past claims, the type of policy you are buying, whether term or permanent, and the coverage amount can influence the life insurance premiums.
How Can I Lower The Cost Of Life Insurance?
While many factors influence the cost of your life insurance policy, there are also ways you can lower the cost of your premiums.
Here are a few suggestions to lower your life insurance premium cost.
- Get healthy: Making healthy lifestyle choices will give you the best chance of getting the lowest premiums. The healthier you are, the lesser premiums you pay.
- Quit smoking: Smokers always pay more premiums than non-smokers. Quitting your smoking habits can save you a lot of premiums.
- Compare rates: You can compare rates between different insurance companies and look for the best deals.
- Bundle policies: Buying multiple policies from an insurance company can get you discounts on premiums.
Final Thoughts on How Much is Life Insurance
You can see that the cost of life insurance premiums depends on personal factors and the specific needs of your coverage.
Age, health, and smoking status are the most common factors that can determine how much is life insurance in Canada.
Younger, healthier, and non-smoking Canadians usually get the best premium rates in Canada.
Speak to an experienced life insurance advisor and get the best life insurance policy at the best rate.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
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