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Rates.ca Life Insurance

Welcome home. Rates.ca is Canada's premier destination for finding the best auto, life, travel and property insurance rates.

We are your one-stop site for finding the life insurance coverage you're looking for at the lowest rates. Rates.ca makes it easy for you to compare life insurance quotes, policies and providers.

Life insurance premiums are calculated based on many factors & differ by companies. Compare your life insurance quotes from top companies to get your best rate now!

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What is Life Insurance? Why do you need it?

What is Life Insurance? Why do you need it?

If you are someone who has dependents who rely on you financially, you should be thinking about getting life insurance. It’s as simple as that. Life insurance helps you protect the ones you love in the event of your untimely death, by providing them money to pay for the things that your income was taking care of like a mortgage, groceries, bills, etc. Your life insurance should ideally be able to replace your income—before tax—should something happen to you. Are you young and single, and wondering if it is important? You should still consider life insurance, even if you do not have a partner or a child depending on your income.

Life is unexpected, and it is important to prepare for sudden changes and unforeseen circumstances, regardless of what stage of life you are in!

An online life insurance calculator is a great tool for getting a rough estimate of your life insurance needs based on your financial situation. Rates.ca can connect you to an advisor today to learn about what coverage you need and the protection that is right for your unique needs.

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The quickest way to get your life insurance quote

Ready to compare quotes and save?

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1. Tell us about your lifestyle and health

Answer a few basic health-related questions. A standard medical exam will follow.

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2. Compare your quotes

See quotes from 30+ insurance companies side by side.

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3. Choose the right coverage

Find the right security for your future and your family.

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4. Secure your rate

Connect with the provider and finalize your rate.

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What are the different types of life insurance in Ontario?

You can purchase a single policy, or a combination of policies if that suits your needs. How much life insurance you need would depend on what you would like to accomplish with your policy. Ideally, you would need to have an amount of coverage that is five to ten times your annual before-tax income.

Although there are many types of life insurance policies in Ontario, they generally fall into two categories, Term and Permanent/Whole Life.

Term Life Insurance

Term Life Insurance

Term Life Insurance policy will provide the policyholder protection over a specific period of time/term. If the term expires within your timeline, there is no payout and you then have the choice to renew the coverage or find a new policy. It is better to make sure that your term life insurance policy is renewable, or convertible into a permanent policy.

Term life insurance is usually purchased for terms like one, five, ten, 15, 20 or 30 years, or until a specific age like 60 or 65. Term life insurance policies can be renewable at a higher premium when they expire. Since term life insurance policies have lower premiums than a permanent life insurance policy, this is the most commonly purchased and recommended, especially for younger adults who may have higher living expenses, like mortgages, car loans, student loans, credit card debts, line of credit, child care, or education costs.

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Permanent Life Insurance

Permanent Life Insurance

Permanent Life Insurance is also sometimes called Whole Life Insurance policy, and the main difference between this type and term life is the cash value. The money that builds up in this policy can be used to pay your premiums, or used as collateral on a loan, whereas, for term life policy, you cannot borrow against the policy. The premiums are fixed and are higher than for term life insurance.

You can ask your life insurance agent about the details of each policy before making a decision.

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What factors affect your life insurance rates in Ontario?

Life insurance premiums are calculated based on many factors and they are so much more than just your average overall health.

Age

Premiums are always lower when you are younger, because of the likelihood of death, and health related illnesses as you grow older. The younger you are, the lower your insurance premiums will be.

Policy type & Coverage

The larger the lump sum amount of your death benefit payout, the higher your premiums, obviously. Also, the longer the term of your policy, the more expensive your premiums. This also explains why Permanent Life Insurance policies cost more than Term Life policies.

Gender

Statistically, women tend to pay a little less than men on life insurance premiums, because of a generally longer life expectancy and health compared to men.

Health History

If you have a health-related condition or a family history of serious health issues or illnesses, you will be paying more on your premiums. If you are a smoker, your premiums will be higher as well, because of the risks involved. This is the same for alcohol consumption, and heavy drinkers often incur heavy premiums.

Lifestyle

This one should be obvious; the riskier your lifestyle, the more you will pay for insuring your life. If you are into extreme adventure sports or indulge in rock climbing, scuba diving, work at hazardous places, travel to dangerous places for work or even drive long-distance, you may come in the bracket of being high risk. Again, it is wise to be honest on your application and ask your insurance advisor so that they can assess your exact situation.

What is the average life insurance cost per month in Ontario?

Let's say you have an annual income of $24,000, and you want to replace your income for your family, for the next 30 years. At the most basic, for a coverage amount of $750,000 in the city of Toronto, and for a 35-year-old non-smoking man or a woman in good health, here is what average premiums look like on a term life insurance policy:

Term Male (35)
non-smoker
Female (35)
non-smoker
Male (35)
smoker
Female (35)
smoker
Term (10-year) $34 $25 $78 $56
Term (20-year) $53 $39 $140 $104
Term (30-year) $99 $74 $232 $173
Term 100 $491 $418 $705 $563

When you actually look for an accurate estimate, you will also need to factor in inflation and interest rates. These premiums will be varied depending on several factors.

Now let’s input the same variables; coverage amount of $750,000, 35-year-old male, on a 10-year term life policy for a smoker. The average premium comes to $66.45 per month. That’s double the amount! Term life insurance also gets expensive as you get older, which is why the earlier you get it, the better. Again, if we input the same variables for a 60-year-old non-smoking male, the average monthly premium for a 10-year term policy comes to a whopping $293.33 per month!

Once you are retired with children who are grown-up, life insurance may not really be necessary. Unlike what it might look like, the monthly cost for life insurance is not at all expensive if you are a healthy person between 20 and 50!

Rates.ca can help you connect to life insurance experts who will work with you in calculating how much insurance you need and picking the policy that is best for you and your needs. Start off by looking at a few quotes!

How can you obtain life insurance in Canada?

How can you obtain life insurance in Canada?

Life Insurance provides financial security and protection to the surviving loved ones, in the event of the untimely death of the insured. Before you purchase a life insurance policy, you need to sit down and make an assessment about your financial situations, and the standard of living that you would need to provide your dependents after your death. This is where your insurance agent will help you, by establishing the kind of life insurance you need, since each policy is unique to the insured. Make sure you review your policy document thoroughly before you finalize your coverage. So how can you start?

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Before you buy life insurance:

Always compare quotes

Purchasing life insurance is the same as with anything else; if you do not take the time to shop around, it’s almost guaranteed that you will end up paying more than you really need. Whether that is for a basic life insurance coverage or a joint coverage, the Rates.ca calculator that doubles up as a comparison engine does the job for you in a few minutes. Life insurance doesn’t renew every year, it’s something that will stay for either a period of time or lifelong, so make sure that you are comparing your quotes to pin down the best rate.

Talk to your insurance agent

You have shopped around and compared your quotes. Now is the time to connect to your insurance agent, a licensed expert, to discuss all aspects of the coverage. Things you can discuss with your broker or agent could range from your current financial situation, and your goals, to whether the coverage meets your needs, advantages and drawbacks of different options.

Your insurance broker will ask you personal medical questions as well, which is necessary to give you an estimate that is accurate. Be honest, as this will be verified during your medical exam after you apply for insurance.

Submit your application

You will need to submit your application, which will include forms that you will need to fill out. You can totally be at ease because with Rates.ca, you do not have to go through this process alone! Our insurance agent will be there through each and every step of submitting your application.

Take and complete a medical exam

Once your application has been submitted, you may be required to take a medical test, where a medical professional, typically a nurse, will do a physical examination. Your insurer will have a nurse sent over to your home to go through your medical history, take your blood pressure, weigh you, and draw a blood sample/collect a urine sample that will be tested for glucose, cholesterol, tobacco and drug usage, and other illnesses.

If you have been truthful about your health on your application, this is not a worrisome process, but not being accurate could risk your claim being denied.

Review and finalize your quote!

In over a few weeks, your medical results and application will be looked into by your insurer to determine whether to approve you for your life insurance coverage, approve your original quote that was given, or whether to adjust the quotes according to any conditions that may have come to light during the medical exam. You can now finalize your quote after thoroughly reviewing the papers, and rest assured that you have a solid financial plan for your family.

What type of life insurance is best?

What type of life insurance is best?

Thinking about life insurance can be daunting and choosing to go for the right policy can be confusing. Identifying your budget, lifestyle, and your goals for your family can be helpful in knowing what is best for your unique needs.

There is no 'one-size-fits-all' insurance policy. When you are looking for temporary insurance coverage for a shorter, specific period of time, term insurance is the best to go for. It can either be renewed while your long-term goals change with time, or be converted into permanent coverage. Term life insurance policies are cost-effective in the earlier stages since premiums remain the same throughout the term. Once your term expires though, expect to pay a higher premium for the next term.

Let’s look at the advantages and disadvantages of term life insurance and permanent/whole life insurance.

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Term life insurance

Pros Cons
Is initially less expensive than permanent or whole life insurance Gets more expensive as you get older
Can usually be renewed for another duration or converted into a permanent policy or other policies Is temporary coverage, and will eventually run out if it isn’t renewed
Is for a more temporary, immediate need Will have premiums that increase on each renewal when the term expires (5, 10 15, 20, 30 years)
Has no additional cash value to borrow against

Permanent/Whole life insurance

Pros: Cons:
Has a cash value that builds and can be cashed in, saved for retirement, or used to take out a loan Has more expensive premiums compared to term life insurance in the early stages
Is a policy with fixed premiums and a steady death benefit payout Returns and benefits can be complicated and difficult to understand without professional guidance
Is inexpensive compared to term life insurance as you grow older Will begin to earn returns only after you have held it for a number of years (20+) and built up a sizable value
Is great for people with long-term goals and estate planning Cannot be converted into any other types of policies

So, which is best?

If you are a wealthy enough family, in your 40’s and want to use your policy as part of your estate planning, permanent or whole life insurance might be best for you.

If you are younger, and only need temporary coverage maybe until your mortgage is paid off, or until your children grow up and become financially independent, term life insurance may be better.

Don’t hesitate to ask your insurance professional questions! They can provide you with helpful advice.

About Critical Illness Insurance and Accidental Death Insurance

About Critical Illness Insurance and Accidental Death Insurance

Critical illness insurance is a kind of health insurance that provides a lump-sum payment in the event of being seriously ill. The types of illnesses covered by critical illness insurance differ from company to company, but typical illnesses and diseases that are covered include cancer, heart attack, stroke, blindness, Alzheimer’s, organ transplants, paralysis, etc. The coverage can also be dependent on the severity of the illness.

Make sure to ask your insurance agent questions and also have them explain the details of the coverage. Critical illness insurance is not the same as disability insurance.

When you are covered under accidental death insurance, your dependents/beneficiaries are provided financial security in the event of your death in an accident. Accidental death insurance is not a replacement for life insurance and is a good option for people who work in potentially life-threatening, risky, or dangerous environments. This is not to be confused with being active in high-risk activities or hobbies, or illegal activities.

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Can I name my underage children as beneficiaries in Ontario?

Can I name my underage children as beneficiaries in Ontario?

Usually, when you purchase a life insurance policy, you need to name a beneficiary. A beneficiary can be a person or persons who receives the death benefit from your life insurance policy, in the event of your death. Beneficiaries can be your partner, spouse, children, dependents, family members, a friend, or a charity.

But what if you wanted to name your minor child as a direct beneficiary for your assets? The law around this in Ontario states that children under 18 do not have the authority to receive or use the death benefit amount left to them through an insurance policy. If you want your minor kids to receive your death benefits, naming an adult and setting up a trust is the wise way to go. If you don’t, the court can appoint someone to do this and it is an expensive process to go through.

After your death, this trustee takes care of the benefit in trust for the children until they turn 18 years old and can use the money. You can name a court-approved trusted adult who will be responsible for dealing with your death benefit and distributing them properly. Naming your spouse makes the process easier and hassle-free since this is the person most likely to be caring for the children when you are no longer around. It’s always a good idea to consult with a lawyer or an advisor to get legal advice if you have concerns.

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Frequently Asked Questions about Life Insurance in Ontario

How much life insurance do I need?

Generally, you should aim for life insurance coverage of five to ten times your annual income (before tax).

However, the amount of life insurance you need depends on your unique situation. Your life insurance should be enough to cover your:

  • Funeral expenses
  • Outstanding debts
  • Total bills and payments
  • Loans
  • Future bills including your mortgage
  • Income that your partner and children relied on

If you are a parent, you will want to think about your children’s education/college and university expenses. You also have to factor in that university tuitions can also increase as the years go by. If you are single, without kids, perhaps you might want to leave something for a parent, or a charity. If you have a partner who doesn’t earn, you might want to make sure that a comfortable life is provided until they are on their feet in case of the inevitable.

How do I calculate the amount of life insurance I need?

First, identify your goals for your family, then plan for the costs.

An average traditional funeral in Ontario costs anywhere between $1,500* and $20,000*, depending on individual preferences. The average cost of a traditional funeral that includes a service, preparation of the body, cremation or interment, visitation, etc. in the province of Ontario is around $5,000 according to the Ontario Board of Funeral Services. Don’t forget attorney charges too, which is never a one-size-fits-all fee; some can charge by the hour, and some lawyers charge anywhere around $1,500 to $3,500* for estate planning.

*According to data collected from statistics laid out by various funeral homes and probate lawyers.

Add another 2% - 3% as the yearly estimated inflation rate and calculate in 5% as the after-tax investment yield (what the return of your investments are, after applicable taxes have been paid). Future education for children? Going by the costs of a Canadian university education (with all the expenses that include in with tuitions), prepare to factor in another $10,000 to $20,000 a year per child. Rates.ca’s life insurance calculator helps you figure out an estimate of what your coverage costs and helps you get an idea of the life insurance needs of you and your family.

Which life insurance company has the best rates?

There is no one answer for this, but the easiest way to find the best rates is to compare quotes. Once you have your quotes, it’s up to you and your insurance expert to go for the policy that meets your needs. At Rates.ca, getting life insurance quotes from many of Canada's most respected life insurance companies is fast, easy and free. Compare life insurance quotes today!

What is a death benefit?

Life insurance helps your loved ones, or dependents deal with the financial impact of your death. A death benefit is that sum of money that is paid from a life insurance policy as a one-time, lump-sum, tax-free amount, to a named beneficiary. This death benefit amount can be used by your beneficiary after you are no longer with them to:

  • Replace your income and maintain their standard of living
  • Provide for your children’s education
  • Pay for your funeral expenses and other needs
  • Pay off your outstanding debts, or mortgage
  • Paying taxes; buying stock
  • Make a gift to charity

You may also choose to leave the money to your estate or to a trust.

What if I never claim my critical illness insurance?

If a claim is never made, the premiums you have been paying may be refunded to your named beneficiary, depending on your policy. There are plans that return the premium, or a portion of the premiums paid during the term of the policy, if the policy matures and no claim had been made.

Does life insurance cover accidental death & dismemberment?

If you are covered under accidental death insurance and dismemberment (AD&D), you are only given coverage for accidental death, or if you have suffered a severe injury. Life insurance covers you for death under accidental circumstances, but only if you only have AD&D.

You aren’t covered in the event of death from suicide, drug overdose, drunk driving, illness or disease. AD&D is usually purchased as a standalone insurance product or as a rider on your life insurance policy.

If you lose your eyesight, hearing or body part due to an illness, and not due to an accident, you may not be covered under Accidental Death & Dismemberment, or you may only be partially covered. There are exact terms and payouts that will be written in the policy. Make sure you read the policy thoroughly. AD&D can be a supplemental coverage to an already existing life insurance policy, not a replacement.

What if the life insurance policy holder committed suicide?

On all life insurance policies, there is a little clause—a suicide clause exclusion— that states that if the policyholder commits suicide or dies as a result of self-inflicted injuries, within the first two years of the policy being active, then the beneficiary receives none of the benefits, and in most circumstances, will be only paid a sum of the premiums paid.

Although suicide affects everyone involved, and it’s often never really controllable or understood, there is always the fine print. The reasoning for this ‘two-years’ clause is that someone who is planning a suicide may go and buy a policy right before taking that step. Not everyone who commits suicide is buying the policy, with the intent of committing suicide, but there are situations and they happen. Even if the policyholder has committed suicide after two years of the policy being effective, the beneficiary may still be denied, or else the road to payment may well be a very long, hard, and excruciating one. Make sure you have read your policy carefully and ask your insurance expert tons of questions if you have any concerns.

*If you feel like either you or a loved one is depressed, going through a crisis, or could be considering suicide, please seek professional help through your local resources and crisis centres.

How is the death benefit paid out? How long does it take?

Firstly, make sure you have communicated with your beneficiaries about the policy, and they know some of the key details like the policy number, the face value, term length, and expiration date if it applies. Typically, the beneficiary would be needed to contact the insurance provider, and once all the supporting documentation is provided, the claim process will start.

The beneficiary would need to then fill out the death claim and submit it along with the death certificate of the insured. The benefits payout happens in 30 days of submitting a claim. In Ontario, payouts are done either in lump-sum or through installments, as a tax-free amount

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