What is the cost of life insurance?

By June 12, 2024 July 3rd, 2024 Advisor, Blog, Consumer, News
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Life insurance is an essential part of a well-rounded financial plan, as it can help ensure that your family’s lifestyle remains stable if something unexpected happens to you. If the cost of life insurance seems prohibitive, you might be surprised to find that it’s often more affordable than you think.

You may be wondering, what is the cost of life insurance? While it really depends on the individual, the average cost of life insurance in Canada for a 10-year term policy with $100,000 coverage for a healthy 30-year-old typically ranges around $13 per month1. By checking real quotes, you get a clearer picture of what you might expect to pay. Let’s demystify the process of determining the cost of insurance—life insurance.


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Personal Risk Factors Impacting Life Insurance Premiums


Younger individuals typically face lower cost of insurance & life insurance premiums due to their longer life expectancies and lower risk of illness. Premiums can increase with each additional year of age, so making an early purchase is advantageous. This trend becomes particularly noticeable after the age of 50, when premiums can rise more steeply.


When looking into what is the cost of life insurance, statistics show that women generally live longer than men by nearly five years2, resulting in lower cost of insurance & life insurance premiums for women due to their extended longevity.


Smokers usually pay significantly higher cost of insurance & life insurance premiums, sometimes more than double, due to the increased health risks associated with smoking. This can include the occasional use of cigarettes, cigars, or vaping products.


Underwriting commonly includes a medical exam noting key health indicators like height, weight, and cholesterol levels. Well-managed health conditions can lead to more favourable rates, while “no exam” policies may cost more.


Your job can significantly affect your life insurance premiums. Engaging in high-risk professions such as mining, construction, or firefighting, where the risk of injury or death is higher, often results in higher insurance costs compared to less hazardous occupations.


Engaging in high-risk activities, such as car racing, scuba diving, or rock climbing, or working in dangerous professions like mining or law enforcement, can lead to higher cost of insurance & life insurance premiums.

Family Medical History

A family history of serious illnesses like cancer or stroke can increase your premiums, especially if these conditions have led to early deaths in your family.

Policy-Related Factors Influencing Life Insurance Costs

When considering the question, what is the cost of life insurance, the specifics of the policy itself play a significant role in determining the premium costs. Here’s a more detailed breakdown:

Policy Face Value

Generally, the higher the face value of your policy—that is, the amount the policy will pay out upon death—the higher your premium will be. This is because the insurer is taking on a greater risk of a larger payout

Type of Policy

The type of life insurance policy you choose affects your premium. Term life insurance is typically less expensive than permanent (including whole life) insurance. This is because term life only covers you for a specified period and does not build cash value, so there is a chance you will outlive the policy without the insurer needing to pay out.

Length of Term

For term life insurance, the duration of coverage is also a factor. Longer terms generally cost more than shorter terms because they extend the period during which the insurer might be required to pay the death benefit.

Policy Features

Additional options like convertibility (the ability to convert from a term to a permanent policy without further medical examination) or renewability (the option to renew the policy at the end of its term without requalifying) can increase the cost of a policy. These features add flexibility for the policyholder but also increase the insurer’s risk.

Premium Structure

Premiums can be level (the same throughout the term), increasing, or decreasing. Level premiums are typically higher initially than increasing premiums but can be more cost-effective over the life of the policy.

Riders and Add-ons

Adding riders—like those for accidental death, child insurance, or critical illness—can provide additional benefits but also increase the premium cost since they expand the coverage.

Why Choose Canada Protection Plan’s Simplified & No Medical Life Insurance?

Canada Protection Plan’s Simplified & No Medical3 Life Insurance offers a straightforward, hassle-free way to secure life insurance coverage, ideal for those who want to avoid the complexities and intrusiveness of traditional medical exams. Our insurance policy is perfect for individuals with pre-existing conditions, those concerned about lengthy approval times, or anyone seeking immediate coverage. With its quick application process—often just a few simple health questions—you can gain peace of mind knowing your loved ones will be financially protected without the need for medical tests.

What is the average cost of life insurance that doesn’t require medical exams? It can be a bit more expensive than traditional policies and may come with lower coverage limits, but it provides an essential safety net for those who might otherwise be uninsured. It’s particularly beneficial for older adults or those with health conditions that make other insurance options prohibitive. Canada Protection Plan ensures that more people have access to essential life insurance, making it an inclusive option for ensuring your family’s future is secure.

How Much Life Insurance Should You Get?

Determining the amount of life insurance you need should be a thoughtful process that considers your unique financial circumstances and future goals.

Income Replacement

Calculate how many years your family would need financial support if you were no longer able to provide for them. For instance, if you earn $60,000 annually and want to support your family for ten years after your death, you will likely want at least $600,000 in coverage.

Debt and Obligations

Add up all your debts, including mortgage, car loans, credit cards, and other liabilities. It would be prudent to ensure your life insurance coverage is enough to clear these debts so they don’t burden your family.

Future Educational Expenses

If you have children, consider the costs of their education. Include potential college or university fees to help ensure their educational paths are secured.

End-of-Life Expenses

Factor in the costs of funeral expenses and any medical bills that might be outstanding at the time of death. These can often amount to tens of thousands of dollars.

Estate Taxes

Although less common, if your estate is large enough to incur estate taxes, additional insurance can help cover these costs without requiring your heirs to liquidate assets.

Lifestyle Maintenance

Beyond just replacing income, consider what it will take to maintain your family’s current lifestyle. This can include the cost of extracurricular activities, home maintenance, and anything else they regularly enjoy.

Adjust for Inflation

Consider the impact of inflation on future financial needs, especially if you are planning long-term. This ensures that the life insurance payout maintains its purchasing power over time.

Are you curious about the average cost of life insurance in Canada? Discover affordable options with Canada Protection Plan. Whether you’re looking for term or whole life coverage, we offer competitive rates that fit your budget and coverage needs without the hassle of medical exams. Call a Canada Protection Plan agent so we can help you determine what is the cost of life insurance for your particular circumstances. Start your journey to helping secure your family’s financial future with us today.

Canada Protection Plan is one of Canada’s leading providers of No Medical and Simplified Issue Life Insurance. Our mission is to provide reliable protection and compassionate service from coast to coast with easy-to-purchase life insurance, critical illness insurance and related products. Our expanding product choices will help you get the coverage and peace of mind you need for a better financial future. Canada Protection Plan products are available through over 25,000 independent insurance advisors across Canada.

423574 CAN (06/24)

To learn more about Canada Protection Plan and our line of comprehensive No Medical and Simplified Issue life insurance solutions, call Broker Services at 1-877-796-9090 and we will be happy to assist you or put you in contact with Sales support in your region.

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