Life insurance is a critical financial tool for protecting your loved ones, but understanding the cost can feel overwhelming. In Canada, premiums vary widely based on factors like age, health, and lifestyle. This guide breaks down life insurance cost in Canada , offering actionable tips to secure affordable rates tailored to your needs.
The rates of life insurance in Canada will vary based on many factors and these factors include things like your age, health, lifestyle and the kind of insurance cover you take. The average cost of a life insurance policy can vary between 10 to 70 dollars a month, and it might be much greater in case of a person with health medical issues, dangerous occupation or herbal practices such as smoking.
Yet, many Canadians remain without adequate life insurance coverage. LIMRA 2023 Canadian Insurance Barometer Study reveals that 31 per cent of Canadians or approximately 8.4 million adults feel they need or need more life insurance cover.
We will decompose the life insurance rates in Canada in 2025, the factors that motivate them, and how to get the best insurance cover at the most affordable rate in this blog.
Insurance providers use actuarial science to assess risk. Key factors include:
Age : Younger applicants pay less due to lower mortality risk.
Health : Medical history, BMI, and lab results influence costs.
Gender: Insurance providers often offer more affordable rates to female applicants, as statistical data indicates women generally have a higher life expectancy than men.
Coverage amount and term : Higher death benefits or longer terms increase costs.
Lifestyle : Smoking, high-risk hobbies (e.g., rock climbing), and travel destinations matter.
Here’s a snapshot of average monthly premiums for a 20-year term policy with $500,000 coverage:
Health impact : A smoker in their 40s could pay 2–3x more than a non-smoker. Chronic conditions like diabetes or heart disease also raise rates.
Women pay 10–20% less than men for similar coverage due to biological longevity. For example, a 35-year-old woman might pay $30/month for $1 million term life insurance, while a man pays $36.
Smoking classifies you as high-risk. A 10-year term policy for $500,000 could cost a smoker in their 30s $60–$100/month , versus $25–$35 for non-smokers. Quitting for 12+ months may qualify you for lower rates.
So, what would happen to me should I smoke marijuana?
A vast majority of insurer companies treat the users of marijuana differently to the tobacco users. Most of the time, marijuana users will be able to purchase the policies that suit them and are not charged at the smoker rates.
Insurers evaluate:
Medical exams : Blood pressure, cholesterol, and glucose levels.
Pre-existing conditions : Diabetes, cancer, or heart disease raise premiums.
BMI : Obesity can increase costs by 20–50%.
Family history : Genetic risks (e.g., early heart disease) matter.
Tip: Proactively managing health conditions may result in more favorable premium rates.
Engaging in hobbies like skydiving, scuba diving, or motorcycling may require a risk class surcharge . Traveling often to areas with geopolitical instability may result in elevated insurance premiums.
Your life insurance premiums may increase depending on specific risk factors. Are you a dare devil? Common risky behaviors such as risky hobbies (sky-diving or scuba diving) enhance the risk factor of insuring you.
To top this, the insurance companies can request criminal histories and motor vehicle reports in order to determine whether you are a risky person to insure. Criminal convictions in traffic (or other criminal convictions) can influence your monthly price or even not pass the application, however, there are different rules in each company.
So here is where the math becomes tricky. Your premiums of life insurance are determined using the regular ratings in the industry between A to J or 1-10 with 1 the closest to ideal and 10 the highest risk. You as an example have a couple of high-risk hobbies and your life insurance company puts you in the C rating class. You would end up paying 75% higher on life insurance.
Key Insight: Buying more coverage doesn’t always mean proportionally higher costs.
You can find different types of life insurance policies in Canada, each with a different rate. Coverage options include:
Term insurance
Whole life Insurance policies
No-medical life insurance
Children’s insurance
We can just take an example that when you are taking term life insurance, the premium cost is likely to be cheap. The range of premium charged on whole life insurance policies is normally the higher of the range of policies because you are covered up to your death!
Term life insurance in Canada offers a cost-effective financial safeguard for individuals seeking reliable coverage without excessive expenses. With a coverage value of 500,000 dollars, monthly payments may amount to 14 to 380 dollars, depending on the age of the applicant.
Premiums are raised as people get old or acquire health complications to cover the increased risk of pay-out. This is because; unlike the whole life insurance where a person insures until death, the term life insurance covers a given duration, e.g. 10 years, 20 years, or 30 years and thus it is a cheap option to insure against the monetary future of a family.
Health impact : A smoker in their 40s could pay 2–3x more than a non-smoker. Chronic conditions like diabetes or heart disease also raise rates.
An example is given on the costs of term life insurance of 10 years of individuals of different age brackets taking a cover of 500,000 dollars
A form of permanent insurance is whole life insurance that technically can be said to cost more since it covers you throughout your life. Generally, a non-participating whole life insurance can cost 47 to 245 dollars per month, and a participatory one -54 to 263 dollars per month with 100 thousands of dollars of coverage.
The participating policies are costly due to the cash value element which you can use during your life.
Whole life insurance cost in Canada
Examples of cost on a male person of different age bracket to acquire a whole life insurance cover with a sum of 100,000 dollars of insurance cover on it.
The premium of the policies of life insurance that will not require a medical examination which are also known as no-medical insurance is normally higher compared to both term and whole insurance. Such kind of policy is a favorite among individuals with poor health or individuals who wish to get a cover fast.
This is an example of the price of a 20-year no-medical life insurance with a coverage of a half-a-million dollars under the Simplified Elite policy of Canada Protection Plan.
Canadian Protection Plan's no-medical life insurance rate
Consider a 20-year term life insurance plan with $500,000 coverage that requires no medical exam, offered under the Simplified Elite Policy by Canada Protection Plan.
Planning to get a life insurance policy on their children or grandchildren is a good choice in most cases made by parents or grandparents. Whole life insurance of children is very cheap and the child will enjoy the cash value of the insurance over their lifetime.
Here is what a 20-pay $100 per month whole life insurance for a 5 yr old girl would look like:
Children life insurance cost
An example of the accumulated cash value and death benefit of a 20-pay, $100/month, whole life insurance policy issued to a five-year-old girl
Why it matters : Longer terms lock in rates but increase costs.
Joint policies average $70–$150/month for $1 million coverage. Individual policies may be cheaper if one partner is in poor health.
Term life for seniors over 60: $100–$300/month (if health is good).
Guaranteed issue policies : No medical exam, but coverage is limited ($10,000–$50,000) and costly.
At age 30:
Term life : $750,000–$1M coverage for 20–30 years.
Whole life : ~$100,000 coverage (not recommended for this budget).
Buy young : Lock in lower rates before health declines.
Quit smoking : Save up to 50% on premiums.
Choose term over whole life : Cheaper for most families.
Avoid risky hobbies : Remove exclusions for high-risk activities.
Bundle policies : Combine home/auto insurance for discounts.
Compare quotes : Use platforms like Aarna Insurance to find the best rate.
Review coverage periodically : Adjust as life circumstances change.
Q: What’s the cheapest life insurance in Canada?
A: Term life insurance from providers like Aarna Insurance offers the lowest rates.
Q: Do smokers always pay more?
A: Yes—smoking doubles or triples premiums in most cases.
Q: How much life insurance do I need?
A: Aim for 10x your annual income or enough to cover debts, funeral costs, and dependents’ needs.
Get a quote : Use Aarna Insurance’s free comparison tool to find affordable rates.
Consult an expert : Speak with a licensed advisor to tailor coverage.
Apply : Protect your policy using a simplified medical exam or no-medical exam.
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