How Much is Life Insurance in Canada?
Life insurance is an important part of financial protection. It provides peace of mind, and allows loved ones to continue their quality of life after the death of the policyholder. However, for many people, they fear the cost of life insurance and how it can fit in with their budget.
The cost of life insurance can vary, so it’s important to know the factors that influence it and how they apply to your situation. Here, we’ll look at that, but also some figures to give you a better understanding of what you’ll have to pay.
How Much is Life Insurance in Canada?
It’s almost impossible to give an accurate number to this question without knowing someone’s personal circumstances. There are many factors that go into the cost of a policy, with the biggest being the type of life insurance and your age.
Due to this, it’s better to look at a breakdown of average costs per age group, while also looking at the different types available and all the relevant factors. This will give you a much more accurate figure on what you’re likely to pay.
Related Article: https://www.rjins.com/resources/our-blog/why-is-spending-on-life-insurance-coverage-worth-it-a-complete-guide/
Types of Life Insurance in Canada
Life insurance can generally be split into two types: term life insurance and permanent life insurance. Before you even consider the cost of a policy, it’s vital to know which of these plans you should opt for.
Term Life Insurance – As the name suggests, this covers you for a specific term, such as ten years. Once those ten years expire, you are no longer covered by the policy should you pass away. This can be more appropriate for those with specific coverage needs, and due to the chance of the policy expiring, it is cheaper and more straightforward.
Permanent Life Insurance – As long as you keep up with the premiums, this policy will cover you until your death. There is often also a cash value component that grows over time. As this is sure to pay out, it is more expensive and more complicated than a term policy.
Factors Influencing Life Insurance Costs
Once you have decided on which type of policy to opt for, the other price factors will then come into play. Whether you choose a term or life plan, these factors are equally applicable to both.
Age – Of course, the younger you are, the less you’ll have to pay for your premium. A younger person would be deemed as a lower risk of a payout. They also have more time to contribute to their life insurance policy.
Health – The healthier you are, the less you’ll pay for your premium. It’s important not to lie about your health record, as this can invalidate your policy.
Lifestyle – Non-smokers and those with a healthier lifestyle won’t have to pay as much for their policy. As above, there is a significant risk of not being truthful about this.
Coverage Limit – The coverage limit is the maximum that will be paid out on a policy. The higher it is, the higher the premiums will be.
Gender – Women often pay lower insurance premiums. This is partly due to women being less likely to have dangerous jobs and longer life expectancies.
Average Costs of Term Life Insurance by Age Group
Now we look at the average costs per age group. Even now, it can be hard to give an accurate range due to all the factors above. Here we will look at an example of someone with a 20-year term plan who is in good health, with $100,000 coverage.
Ages 20-30 – $8-$15 per month
Ages 31-40 – $12-$20 per month
Ages 41-50 – $20-$35 per month
Ages 51-60 – $40-$70 per month
Ages 61-70 – $80-$150 per month
Ages 71+ – Over $150 per month
And for reference, here would be the premiums for the same situation but with a 500,000 coverage amount instead.
Ages 20-30 – $15-$30 per month
Ages 31-40 – $25-$40 per month
Ages 41-50 – $40-$70 per month
Ages 51-60 – $80-$150 per month
Ages 61-70 – $150-$300 per month
Ages 71+ – Over $300 per month
Average Costs of Permanent Life Insurance by Age Group
Permanent life insurance is more expensive than term insurance. This is due to both the lifelong coverage and the cash value component. Here, we’re looking at the same parameters of a $100,000 policy for someone in good health.
Ages 20-30 – $40-$75 per month
Ages 31-40 – $60-$100 per month
Ages 41-50 – $90-$150 per month
Ages 51-60 – $130-$200 per month
Ages 61-70 – $180-$300 per month
Ages 71+ – Over $300 per month
And again, here are the same figures but with a cash benefit of $500,000.
Ages 20-30 – $150-$300 per month
Ages 31-40 – $250-$400 per month
Ages 41-50 – $350-$600 per month
Ages 51-60 – $500-$800 per month
Ages 61-70 – $700-$1,200 per month
Ages 71+ – Over $1,200 per month
Tips for Reducing Life Insurance Costs
Life insurance is an important investment, but that doesn’t mean you should take the first quote you’re offered. Here are great ways to reduce your costs.
Start Early – The younger you start, the more spread out your payments are expected to be. This is why you get cheaper premiums when you’re younger.
Maintain a Healthy Lifestyle – If there was ever a time to stop smoking, now is it. Along with other healthy lifestyle choices, this can lower your premiums.
Compare Quotes – Insurers all look at risk differently. Shop around to find the best quote, or let an insurance broker do it for you.
Consider Term Length – If you’re on a budget right now, shorter term policies may be the best bet until your financial situation improves.
Final Thoughts
Life insurance is a critical safety net but it can also come at a significant cost. Thankfully there are ways to reduce this financial burden, whether it is making lifestyle changes or switching to cheaper term plan.
The only way to know for sure what you’ll pay is by getting a quote. Here at Ron Johnston Insurance, we can help you do just that. Get in touch today, and we’ll not only see what premium you’ll be looking at but also answer any other questions you may have.