Top 4 Things You Should Know About Life Insurance in Canada

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Top 4 Things You Should Know About Life Insurance in Canada

What to inquire before Buying a Life Insurance in Canada

Life insurance is a really important and essential part of financial planning, but most of the people don’t want to talk about it. After discussions with consumers, we already have identified the most important questions and concerns of Canadians:


  • What amount of life insurance should I choose?
  • What are the best life insurance companies?
  • What kind of life insurance policy do I need?
  • How much insurance protection do I need if I have children?

Question 1: How Much Life Insurance Should I Choose?
If you acquire Life Insurance in Canada, you want make confident that all important financial features are covered so they don’t become a trouble or burden for your family. These aspects can include:

  • Income exchange for your family.
  • Paying down assets(mortgage on your house,car loan).
  • By taking care of your children’s education (college or university costs).
  • Dealing with outstanding financial debt (lines of credit, credit card debt).
  • Other costs (funeral).

Our collected data shows that most Canadians choose life insurance under $500k. We recommend speaking with a well-informed insurance broker or insurance ambassador before making this big decision. There might be other prospective financial responsibilities that you have not calculated. If you have children, the costs can be much higher than you think – just take a look at the next section.

A separate word on Mortgage Life Insurance Protection: In most cases having separate mortgage insurance is not recommended. Having sufficient life and disability insurance can cover a mortgage, avoiding policies overlaps.
If you are looking for insurance only to cover your funeral expenses, the coverage you need, would be lower – about $10-30k. A funeral insurance quote will assist you to realize the exact costs for this type of insurance.

Question 2: I Have Children – How Much Life Insurance Do I Need?
If you have child, there are some areas that you should to calculate into your financial planning (see research published in the Money Sense online journal – link at the end of the article):

  • Food/cooking
  • Clothes
  • Health Care (dental services, braces etc)
  • Personal Care (everything from diapers to deodorant)
  • School and recreation (school supplies, activities, sports etc.)
  • Transportation (public transit or minivan)
  • Housing (larger house with more bedrooms, additional utilities, furniture etc.)
  • Child Care (babysitters, nanny, daycare)

Overall costs add up to $243,660 as the total cost of raising a child to the age 18. This means $1,070 per month over the course of 19 years. You should think about that this number does not include any post-secondary education costs. Having some children will obviously raise this amount equally. Have you calculated these numbers into your life insurance protection?

Question 3: What Are the Best Life Insurance Companies?

This analysis is based on the information or facts from our own independent insurance evaluation platform. We don’t sponsor any insurance companies, but assemble and investigate what other Canadians share about their insurance providers helping to understand what are the best Life Insurance companies in Canada. All companies are evaluated derived from reviews across two dimensions: 1).Customer Service and 2).Value for Money.

According to our statistics, the four life insurance products which have the highest ratings are offered by the following providers:

  • 4.7 out of 5.0 stars: Primerica Life Insurance Company
  • 4.4 out of 5.0 stars: BMO Insurance
  • 3.9 out of 5.0 stars: Great-West Life
  • 3.9 out of 5.0 stars: Sunlife
  • See the full list of insurance reviews for other companies

Rating update from July, 2016 (in descending rating order)

  • BMO Insurance: 3.6 out of 5 stars (9 insurance reviews for BMO Insurance)
  • London Life: 3.1 out of 5 stars (26 insurance reviews for London Life)
  • Primerica: 2.7 out of 5 stars (9 insurance reviews for Primerica)
  • RBC Insurance: 2.5 out of 5 stars (11 insurance reviews for RBC Insurance)
  • Sun Life: 2.4 out of 5 stars (73 insurance reviews for Sun Life)
  • Manulife: 2.3 out of 5 stars (55 insurance reviews for Manulife)
  • Great-West life: 1.6 out of 5 stars (63 insurance reviews for Great-West Life)
  • Desjardins Life Insurance: 1.0 out of 5 stars (6 insurance reviews for Desjardins Life Insurance)

We strongly encourage, support consumers to check the latest version of our Independent Consumer Reviews, find out which companies materialize to be best for them and share their own experiences! Keep in mind, if home or autos insurance protect your assets, then life insurance protects your family!

Question 4: What Type of Life Insurance Do I Need?
There are a number of types of life insurance in Canada – here is short overview of different types of insurance:

  • Term Life: Life Guard that will conclude at the end of a set term (e.g. after 5, 10, 20 years) and which does not build up any value. A Term Life Insurance policy is a pure insurance product: easy and simple understand.
  • Universal Life: It is a mixture, combination of life insurance and an investment section. A portion of your premiums go into your account, increasing your net worth. You can select how the investment module is invested. A Universal Life Insurance Policy typically comes at a higher cost than a Term Policy.
  • Whole Life: One of the most difficult life insurance products. Like Universal Life, a Whole Life Insurance policy also has both insurance and investment factors/components. However, they normally present less flexibility (e.g. the insurer settle on how investment component is invested). This product is also more luxurious than Term Life insurance.

While each type of life insurance has its good and bad site, we believe, the best choice for most people is very often Term Life insurance. It is the simplest product to understand, it’s the cheapest protection you will get, and it fully accomplish its principle – to protect.

One of the fans of simple Term life insurance is Suze Orman, one of the leading personal finance gurus in the U.S.A. This video about Suze’s perspective on life insurance is fully applicable to Canada.

According to our analysis, Term Life is the most popular and accepted life insurance protection type in Canada.

Please talk with a qualified insurance advisor or broker before making any important decisions associated with such a significant topic. An insurance broker can also assist with other types of insurance policies for example disability insurance coverage,dental insurance policy, or burial insurance protection (also called funeral insurance plans). Here please note that this article is provided for educational purposes only.


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