4 reasons why term life may be right for you

Term life insurance is the best option if:

1. Your needs are temporary
2. You have a tight budget
3. Your needs are simple
4. You’re still deciding

1. Your needs are temporary

Term life is a good option if you want to cover short-term things like paying off a mortgage or providing future college tuition for your children. You can match your term length to your mortgage, or to coincidence with your child reaching adulthood, for example.

2. You have a tight budget

Term is the cheapest type of life insurance policy. It’s a good option if you’re on a budget and you want financial protection that doesn’t come at a high cost. Because it only lasts for a set period of time, term life is not too expensive.

3. Your needs are simple

Term insurance policies are very straightforward and easy to understand. This makes them a great choice if your needs are also simple or you want to cover one or two specific things.

4. You’re still deciding

Maybe you’re still deciding on your coverage needs but want the peace of mind of protection while you weigh your options. Term life is a good option to cover you while you’re thinking about if you should convert a policy into permanent life insurance or buy more coverage.

6 reasons why whole life may be right for you

Whole life insurance is the best option if:

1. You want to be covered into old age
2. You prefer to have the same rate for your entire life
3. You want to cover final expenses
4. You want built-in cash value to help supplement retirement income or to cover other financial needs
5. You want to leave funds behind for family or dependents
6. You don’t have a strict budget

 1. You want to be covered into old age

Whole life is a good option if you want to make sure you have financial protection for the rest of your life, so you don’t have to worry about it when you’re older.

2. You prefer to have the same rate for your entire life

A whole life policy is also the best option for you if you want to keep the same rates for the rest of your life.

While term life is the cheaper type of insurance to start with, premiums can increase dramatically if you want to renew your policy later on. With whole life, you get the same cost no matter how long you keep your policy.

3. You want to cover final expenses

Many Canadians get whole life insurance to pay for end-of-life expenses like funeral costs, estate taxes, any outstanding loans/bills, etc. This makes sure that your family doesn’t have to pay for those things instead.

4. You want built-in cash value

If you like the idea of having some savings with your policy, then whole or permanent insurance may be the right protection for you. A savvy money-mover may be better off doing their own investment, but this type of policy can be a good option for a hands-off approach.

5. You want to leave funds behind for family or dependents

A whole life plan gives you a guaranteed way to leave a large amount of money to your family, dependents, or even a charity, group, or association. If you want to provide a legacy no matter what, this is a good way to do it.

6. You don’t have a strict budget 

Whole life policies are the more expensive option for life insurance. But the extra cost can be well worth the price. There are also options to pay all of your insurance premiums early. This way, you would still have lifelong coverage but you won’t have to actually pay for it anymore by the time you reach retirement age.

Should I get a whole life or term life insurance policy?

Whether you should get term life or whole life insurance plan depends on you and your family. The differences between these two types of insurance policies will help you to figure out which would be best.

Still, it’s not always easy to figure out which one you need. Budget constraints might be enough for some Canadians to choose. For others, the choice between the two is not as simple as reading an article.

But you can always get professional help if you need it!

Contact us

Our friendly, licensed advisors are all licensed and have years of experience helping Canadians choose what kind of protection is best for their needs and their budget.

Schedule a call today and let our experts assess your unique circumstances. They’ll walk you through the best coverage options and help empower you to make the right decision for your family.

In this article, we provide specific quotes for life insurance based on some of the most common factors, like age, amount of coverage, and policy type. And, we tell you how you can lower your premium costs.

The cost of life insurance in Canada

The cost of life insurance in Canada varies based on factors like age, health, coverage amount, and policy type. In general, you can expect to pay around $10 a month for $100,000 in coverage for a 10-year term policy. A participating whole life policy can cost between $44 to $54 for a $100,000 coverage for a 20-year-old Canadian. 

Life insurance rates by age in Canada

Age is one of the biggest factors in the cost of life policies, because it’s directly linked to your life expectancy.

Check out our life insurance rates by age charts for Canada below to see the average life insurance cost per month for someone in their 30s, 40s, 50s, and 60s.

Average Term Life Insurance Premium Costs by Age

This quote is for a 20-year term for an individual in good health and a non-smoker, organized by gender. Please note that coverage for a 20-year term is only available up to age 65. 

Life insurance rates by coverage amount

Canadian life rates vary a lot based on the amount of coverage you buy. This is how much your family would get when you pass away, and is usually the same thing as the life insurance death benefit amount.

Check out the quotes prices below to see rates for insurance by coverage amount at different ages.

Average Term Life Insurance Premium Costs by Coverage Amount

This quote is for a 20-year term for an individual in good health, organized by gender and smoking status. Please note that coverage for a 20-year term is only available up to age 65. 

How much life insurance coverage do I need to buy?

In general, you should get at least 10-15x your annual income in coverage. But, the amount you need depends a lot on your individual circumstances and needs. You should think about how much your family would need for things like:

• Your outstanding debts like student loans, credit card bills, etc.
• Your end-of-life expenses like funeral costs and other final expenses
• Future estate taxes or capital gains taxes on your assets
• Their everyday household expenses and other long-term financial goals
• Childcare costs and future education funds
• Replacing your income
• Supplementing any other existing insurance coverage
• Any other special factors unique to your family

Use our free calculator to help figure out how much coverage you should buy, or book some time with one of our licensed advisors for personal help.

Life insurance rates by policy type

Different types of life insurance policies have different premium costs. How much you pay will vary based on if you have:

• Term
• Whole (permanent)
• No-medical
• Children’s insurance
• Seniors’ insurance
• Couple’s insurance (joint policies)
• Smokers’ insurance

Keep reading to see costs for each of these below.

Term life insurance quotes in Canada*

*Quotes based on $500k in coverage for a non-smoker in regular health.

Whole life insurance quotes in Canada*

*Quotes based on $100k in coverage for a non-smoker in regular health. Participating policies have cash value and dividends. Non-participating policies only have cash value.

Average cost for life insurance for couples

The average cost of life insurance for couples can vary depending on the combined coverage and whether the policy is joint or separate. Below are some sample premium costs based on a $500,000 term life insurance policy.

*Sample quote: Actual premiums, coverage options, terms, and conditions may vary based on factors including, but not limited to, group size, demographics, geographic location, industry, and underwriting criteria.

Average cost of life insurance for seniors

Life insurance for seniors tends to be more expensive due to increased risk factors. Here’s a look at the typical costs for a $250,000 term life insurance policy.

How much does life insurance cost for kids?

Life insurance for children is generally inexpensive, as the coverage amount is low and the risk factors are minimal. 

Life insurance rates by health and lifestyle factors

Your health, lifestyle, and job can significantly impact the cost of your life insurance premium. Below are some key factors that affect rates.

How smoking affects the cost of life insurance

Smoking is a significant factor that can significantly increase life insurance premiums. Insurers view smoking as a major health risk, leading to higher rates for smokers compared to non-smokers. The difference in premiums can be substantial, often doubling or more, especially as you age.

How health and family history affect the cost of life insurance

Your personal health and family medical history are critical factors in determining your life insurance premiums. 

Insurers assess your health status and look at your family’s medical history to gauge potential risks. If you have pre-existing conditions or a family history of serious illnesses, you can expect higher premiums.

High-risk activities and lifestyles that affect the cost of life insurance

Engaging in high-risk activities or having a lifestyle that includes extreme sports or dangerous hobbies such as skydiving, scuba diving, or mountain climbing, can lead to higher life insurance premiums. Insurers consider such activities as increased risks, which directly affect the cost of your policy.

How your job impacts the cost of life insurance

Your occupation is an important factor that insurers consider when determining life insurance premiums. Jobs that are considered high-risk due to the nature of the work, such as construction, mining, or aviation, typically lead to higher insurance costs.

How do insurance companies calculate the cost of your life insurance premiums?

Insurance companies base your premiums on your risk profile — this is their assessment of how risky it would be for them to cover you.

• Insurance companies want to avoid risk as much as possible
• The shorter your life expectancy, the higher the chance that they will have to pay out a lot of money soon — and that’s a risk for them
• Insurers look at personal information about you and your lifestyle to gauge your life expectancy
• They then compare your life expectancy against how much you’re asking them to cover you for, and use that to decide how much it will cost you — and whether to cover you at all

How can I lower the cost of my life insurance premiums?

There are some ways you can lower your insurance premium.

• Change your payment method: Insurance premiums are usually paid monthly. But, many providers give you a discount if you pay yearly instead
• Don’t skip the medical exam: Some policies and options let you skip doing a medical exam. But, policies that are fully underwritten, meaning they require a health test, often cost less than other types
• Compare quotes: You’re allowed to shop and find a better policy. And, trustworthy, reliable life insurance professionals like us will encourage you to do so!
• Improve your health: Committing to a healthy lifestyle can help you save on insurance costs, such as quitting smoking, losing weight, lowering your cholesterol to bring your blood pressure down, etc

Frequently asked questions

What are life insurance premiums?

Premiums are the amount you pay for your insurance policy. This is the same thing as your rate, price, cost, etc.

Is life insurance paid monthly?

Life insurance payments can be made either monthly or annually. Most people choose monthly payments. But, you can get lower prices by switching to a yearly plan.

For permanent insurance, you also have the option to condense your payments so you only pay for a certain amount of years. This is called a limited-pay plan.

What is the cheapest life insurance?

The cheapest form of coverage is term life insurance. This type of insurance policy provides coverage for a set period of time or term. So, term life insurance rates tend to be less than permanent coverage that lasts your entire life.

Learn more about the cheapest life insurance in Canada.

How can I get preferred rates for life insurance?

Preferred rates are only offered to people who have a low-risk profile. This usually means they:

• Maintain excellent health
• Don’t smoke or have quit smoking
• Don’t participate in risky activities like extreme sports
• Have regular checkups

Learn more about how life insurance ratings work.

Is life insurance worth the cost in Canada?

Yes, life insurance is well worth the cost. Especially since premiums are often very affordable. You get the benefit of:

• Financial security for your family
• Peace of mind in knowing that they’ll be provided for
• Reliable estate planning
• A way to clear outstanding debts
• Future college funding for young children
• A business continuity strategy
• Tax-free savings

Does inflation affect the price of life insurance premiums in Canada?

Yes, inflation can affect life insurance rates by:

• Increasing the cost of new premiums
• Making the death benefit have less buying power
• Making your whole life cash value increase

Learn more about how inflation affects your life insurance.

What is term life insurance?

Term life insurance is a type of life insurance that lasts for a specific period of time known as a term, which can be a fixed number of years or until you reach a certain age. This is why it’s called “term life insurance”.

Term life policies are usually offered for periods ranging from 10, 20, or 30 years to specific ages such as age 65. Some companies will also allow you to pick a term, in which case you can choose your own life insurance coverage period to meet your needs.

Key features of term life insurance

• Temporary
  Term life insurance lasts for a specific period of time, usually 10-30 years.
• Affordable
  This type of policy has the lowest cost. Some policies can cost less than $20/month for young, healthy people.
• Flexible
  You can have a term policy for 5, 10, 20, or 30 years. Some insurance companies let you pick your own number of years too. So, you can match your term length to anything you need it to cover.
• Simple
  Term life insurance is very easy to understand because it doesn’t have an investment or savings component like some other types of life insurance do.
• Renewable
  At the end of your term, you have the option to renew your policy for another set number of years. Although, this may not always be the most affordable option. We’ll explain more later on.
• Convertible
  Term life insurance policies can be changed into permanent life insurance without having to take a medical exam.
• Level premiums
  The amount you pay an insurance company every month or year is called a “premium“. Term life insurance premiums stay the same for as long as the term lasts.

Should I get term life insurance? 

You should get a term life insurance policy if you:

• Want affordable life insurance for a set number of years
• Are going through a major life event as a young adult, like getting married, having children, buying a home, etc.
• Have temporary needs like supporting a financial dependent, paying school fees, paying debts, etc.
• Have outstanding mortgage payments
• Are on a tight budget

Term life insurance has many uses that can help your family cover the cost of temporary needs if you unexpectedly pass away in the near future and they don’t have your income to support them anymore.

For instance, most Canadians buy term policies to protect their mortgage or make sure young children can go to college in the future.

If you’re not sure about whether term insurance is a good plan for you, speak with a licensed life insurance broker. We’ll be able to assess your unique circumstances and give you personal, honest guidance to make the best choice.

What are the advantages of term life insurance?

The main advantages of term life policies are:

• Affordable coverage
• Simple to understand
• Flexible
• Renewable
• Convertible
• Level premiums

What are the disadvantages of term life insurance?

The main disadvantages of term life policies are:

• Temporary
• No cash value, investment components, or dividends
• Premiums increase dramatically on renewal
• Death benefit not guaranteed if you outlive your policy

How does term life insurance work?

With term life insurance, you pay a certain amount of money, called a premium, to an insurance company for a set number of years. In turn, the company agrees to give money to anyone you choose if you die within your term.

The person you choose to receive the money is called your beneficiary. Most people choose their close relatives, like their spouse, children, or parents. But you can pick a friend, business, or charity too if you want.

Let’s look at how some of the key factors of term life insurance work.

What happens when my term ends?

If you reach the end of your policy’s term, you have a few options:

1. Let your policy expire
2. Renew your policy
3. Get a new policy
4. Convert your policy

1. Let your policy expire

You can stop paying premiums and walk away from your insurance coverage.

2. Renew your policy

If you still need insurance, you can renew for another term. We don’t recommend this because your premiums will be a lot more expensive.

The insurance company won’t ask you to do a medical exam again if you renew. So, they won’t be sure about your risk profile. Because of this, they’ll charge you more.

3. Get a new policy

This is a better option if you still need coverage. Buying a new term life policy will often cost less than if you renew your old policy.

4. Convert your policy 

You could also change your term life policy into a permanent life policy. There are some rules about doing this. Some life insurance companies may ask you to wait until a few years into your policy to convert. Or before you reach a certain age.

You don’t have to do a medical exam to switch your policy from term to permanent coverage. So, it’s a good option if your short-term needs are over but you still have long-term needs.

Renewing vs converting your policy

There’s no one-size-fits-all answer for whether you should renew your term life insurance or switch to a permanent policy. It will depend on your unique situation and needs.

➡️ If you renew:

Term life insurance policies can get much more expensive on renewal. This is because the insurance company will not ask you to do a medical exam. So, they can’t be sure of your health and how risky it would be for them to give you a policy.

At the same time, by the time your policy ends, you will be older. And, as we’ve noted, life insurance costs more the older you get.

Learn more about the pros and cons of renewing your policy.

➡️ If you convert:

You can convert your term life insurance into permanent life insurance if you need it for long-term needs like covering funeral costs, estate taxes, or other end-of-life expenses.

Your premiums will be more expensive if you choose to convert, but it’s normal for permanent life insurance to cost more than term life insurance. This is because most permanent policies come with a savings and investment component that lets you access what’s called cash value during your lifetime.

So, while you will pay more, you also get more benefits too. And you would not have to take a medical exam to convert.

Learn more about term vs whole life insurance in Canada.

If you’re unsure about your options, speak with one of our licensed insurance experts. We can take a look at your current needs and help you determine which course of action would be in your best interest.

How much does term life insurance cost?

Term life insurance costs vary depending on several factors. In general, people who are young, healthy, and don’t smoke get the lowest life insurance rates in Canada.

Term life insurance products are the cheapest in the market. Premiums are often lower than it would cost you to buy a cup of coffee every day.

Take a look at the chart below to see some of the average Canadian term life premiums from some of the country’s leading companies.

Term life insurance quotes in Canada

 *Quotes based on $500k in coverage for a non-smoker in regular health. 

What affects term life insurance premiums?

Term life insurance premiums depend on factors like:

• Age
• Sex
• Health
• Medical history (including family history)
• Smoking status
• Occupation
• Lifestyle/hobbies
• Type of policy
• Term length
• Amount of coverage

Life insurance costs less the younger you are because, in most cases, you don’t have a high risk of passing away soon. This is why it’s a good idea to sign up when you’re young, because then you can get low prices and keep that same low price for as long as your term lasts.

Policies also cost less if you don’t smoke or do risky activities like skydiving. And, they also often cost less for women because Canadian statistics show women tend to live longer than men.

Things like term length and coverage amount don’t work this exact same way. You may think that a shorter term means a lower price. Sometimes that is the case. But sometimes it may be more cost-effective to go with a longer term.

How much term insurance coverage should I buy?

A general rule of thumb is to get at least 10-15x your yearly income in life insurance coverage. But how much coverage you should buy also depends on things like:

• Your budget
• Any bills or outstanding debt that would have to be paid off
• How much your family would need to keep up with the cost of living
• Inflation

Most of us would want to leave a lot of money behind for our loved ones. But you may not really need a million-dollar policy.

The best way to find out how much term insurance you should buy is to use a life insurance calculator. We have a free one you can use to find out how much insurance you would need in minutes.

When is the best time to buy term life?

The best time to get term life coverage is when you’re young and healthy. This is when your premiums will cost the lowest. And, this is when you’re most likely to benefit from a term life policy.

The best time to buy life insurance will always be today. Your premiums will always cost less the younger you are, and you can also avoid the risk of something happening without having the coverage you need.

How to get the lowest term life insurance quotes in Canada?

If you’re ready to start checking out term life insurance options, you can get the lowest term life insurance quotes in Canada all in one place on PolicyAdvisor.com!

Our easy platform lets you compare online quotes from the best providers. This is an easy way for you to find the lowest rates and best deals.

Or, you can speak with our licensed life insurance brokers. We’re here to help, so book a call and let us help you find the lowest rates!

How can I apply for term life insurance?

You can apply for term life insurance online at PolicyAdvisor.com. Our easy-to-use platform lets you browse plans and submit an application in minutes. It’s a simple process. Just input your preferences and some information. We handle the rest!

Connect with an advisor 

Compare the best term life insurance quotes on PolicyAdvisor.com. And our expert life insurance agents are happy to connect if you need some help!

We’ll answer your questions, explain everything in simple terms, and help you find the best life insurance plan for your family. You don’t have to pay a dime either! We offer personal help free of charge. There’s no obligation to buy.

Frequently asked questions

Do I have to do a medical test to get a term insurance policy?

It depends. These days, insurance companies may not ask for a medical test in many cases. They may just ask a few health questions.

In general, if you’re a Canadian citizen or resident in good health and you’re getting under $500K in coverage, you will probably not be asked to take a medical exam.

Do I get a refund if I cancel my term life insurance policy?

No, you will not get money back if you cancel a term life policy. Think of it this way: term life insurance coverage is like renting an apartment. During your “lease” term, you get the benefit of housing. When the lease is up, you walk away.

Term life policies work the same. During the term, you have the benefit of financial protection. Once the term is up, you can walk away knowing you had peace of mind for the agreed term.

What are the other kinds of life insurance?

Aside from term, the other kind of life insurance you can get in Canada is called permanent life insurance. These policies cover you for the rest of your life and have an investment component.

Some of the most common types of permanent life insurance are:

• Whole
• Universal
• Term-to-100
• Participating
• Non-participating

Most people who buy permanent life insurance get a whole life policy.

If you’re not sure which is better for you, contact us. Our friendly licensed advisors are here to help and happy to help you figure out which plan would work best!

What is whole life insurance used for?

Whole life insurance can be used in many ways, depending on individual circumstances. You can use it to:

Should I get whole life insurance?

You should get whole life insurance if you:

• Want to be covered into old age without having to worry about it later in life
• Want a built-in option to help supplement income in retirement or to cover other financial needs
• Want to pay the same rate your entire life
• Don’t have a strict budget
• Want to make sure your surviving family doesn’t have to pay for your end-of-life expenses

Whole life insurance is ideal for people who have long-term needs. It’s usually more popular with older Canadians because of this. Young Canadians can get it too, to help lock in low life insurance rates permanently.

Because it lasts forever and has a cash value component, this type of policy can be pricey. It is usually more expensive than term life insurance policies. But these added benefits are often worth the cost if your budget has room for it.

Is whole life insurance worth it?

Yes, whole life insurance can be worth it if it meets your needs. You get the advantage of living benefits that you can use now, plus a guaranteed death benefit for your family. In that case, it’s like having your cake and eating it too from an insurance perspective.

Remember, whole life insurance is most valuable to you if you can let it grow over time. And if you don’t need it to cover immediate needs. If you’re young and thinking about long-term protection, then whole life is definitely worth the cost. By the time you reach retirement age, your cash value would have grown significantly.

If you need coverage for short-term needs like paying off a mortgage or something that would be taken care of by the time you reach a ripe old age, then term life insurance is probably a better option for you.

What are the advantages of whole life insurance?

The main advantages of whole life policies are:

• Lifelong coverage – Your policy will never expire once premiums are paid
• Cash value growth – Premium payments are reinvested and grow cash value that you can access during your lifetime
• Dividends (participating policies only) – Annual dividend payments can be used to reinvest, withdraw, buy more insurance, or more
• No market volatility – The investment component is managed by the insurance company and it does not fluctuate with the market
• Guaranteed death benefit – Life insurance will pay out when you pass away no matter what
• Death benefit growth – Your death benefit or coverage amount can grow over time with cash value or dividends
• Level premiums – The cost of your policy will remain consistent as long as your policy
• Limited pay options – Your policy can be paid off in a short time frame so you don’t have to worry about it later

What are the disadvantages of whole life insurance?

The main disadvantages of whole life policies are:

• Premiums can be expensive – Whole life policies can cost more than other types of life insurance, like term
• Not as flexible as term life insurance – You cannot select coverage for just a set period; it can only last forever
• Investment potential may not be as large as with other investments – Growth from a portfolio managed by the insurer will be moderate

How does whole life insurance work?

With whole life insurance, you pay a certain amount of money, called a premium, to an insurance company. This premium stays the same for however long you have the policy.

When you pass away, anyone you choose will receive the life insurance payout we mentioned earlier. This is a lump sum, tax-free payment that life companies will only give out once.

Let’s look at how some of the key factors of whole life insurance work.

How can I find cheap whole life insurance quotes in Canada?

Find the cheapest whole life insurance quotes when you compare the best companies online at PolicyAdvisor.com! Our platform scans the Canadian life insurance market in minutes to bring you the best rates in seconds, making it quick and easy to find your life insurance match.

You can also speak with one of our advisors to find out how to get the best premium deals on life insurance. Or, check out our listing of which Canadian companies are currently offering promotions on insurance.

Speak with an advisor

Knowing which policy is best for you really depends on what your financial goals are. We know there are a lot to choose from, so our advisors are happy to help with your permanent life insurance needs!

Our team has in-depth knowledge of the Canadian insurance industry, so we can guide you based on the different benefits and drawbacks of each company. Let our licensed experts help you compare and make an informed choice. Book some time with us to see what your coverage options are and if whole life insurance coverage is right for you.

Frequently asked questions

What is cash value?

Cash value is the part of a whole life insurance policy that builds value over time. It can also earn dividends for some policies.

Policyholders can access cash value to withdraw it or use it for a policy loan if they need to. Access to this cash value is called a living benefit.

You should also know the difference between the policy’s cash value, and the cash surrender value.

➡️ Cash value is the sum of money that builds inside your insurance policy from investments.

➡️ Cash surrender value is the amount of money from your cash value that you can get if you cancel your whole life policy, minus any cancellation fees.

When can I cash out my whole life insurance policy?

It depends on your provider. Most Canadian companies will let you access your policy’s cash value anytime after the 4th or 5th year of your policy being active.

But you may want to wait. The longer you let the cash value accumulate, the more value it will have.

For example, after a few years, your policy may only have a couple of hundred dollars in cash value. That amount would be small compared to if you waited a few more years, when it may have increased to thousands.

Are whole life insurance policies taxable?

The death benefit of a life insurance policy is NOT taxable. However, things may get a little bit complicated if you want to cash in on your policy dividends.

If you reinvest your dividends into the policy, they won’t be taxed. But if you decide to cash out your policy or try to access the cash value in a way where you make a financial gain, you may be taxed.

Additionally, if you put the policy in your business’s name, your premiums may be tax-deductible. It’s always best to speak to a financial advisor about your specific plans for your whole life policy to know for sure.

Can I use a whole life policy to “be my own bank”?

No, you cannot use your insurance policy to become your own bank.

You may have seen this claim on social media platforms like TikTok, where some people claim you can use whole life insurance for “infinite banking.” But we would warn you that if something seems too good to be true, it usually is.

While the concept of “infinite banking” does exist, it’s very complicated. And it doesn’t work the way some catchy videos suggest.

What are the other types of life insurance in Canada?

Aside from whole life, you can get other types of permanent life insurance plans or something called term life insurance. In Canada, permanent and term are the two main types of life insurance.

A term life policy covers you for a specific period of time, called a term. Unlike whole life insurance, it does not have an investment component, cash value, or dividends. Because of this, it has more affordable coverage.

Other types of permanent coverage include:

• Universal life
• Term to 100

If you’re not sure which is better for you, contact us. Our friendly licensed advisors are here to help and happy to help you figure out which life insurance plan would work best!

Merger and consolidation as Beneva

In 2020, La Capitale announced that it would be merging with SSQ Insurance to form a new group called Beneva. This major change took effect at the start of 2023. Both La Capitale and SSQ — two separate Canadian life insurance companies — shed their names for this merger. They are now consolidated as a single company operating under the Beneva name, but with a combined expertise in insurance.

The point of merging was to create a larger and more diversified company, with better products and services to offer customers. And the merger has achieved just that. Beneva has more than 3.5 million customers across Canada and $25 billion assets under management. It has also kept the mutualist values of the companies that formed its roots, so policyholders have a small say in how the organization is run.

Read our full Beneva Life Insurance Review and Beneva Critical Illness Insurance Review.

About SSQ Insurance

 SSQ Insurance was a well-known mutual insurance company. It was also founded in Quebec but in 1944 — just a few years behind when La Capitale was founded. Like La Capitale, SSQ grew significantly over the years and expanded outside of Quebec. It was one of the biggest life insurance companies in Canada up until its merger with La Capitale. SSQ was also one of the few Canadian insurance companies offering an Extreme Disability Benefit, which was built into its life insurance policies.

Read more about what happened to SSQ Insurance.

What products does Beneva offer?

Beneva provides a wide range of affordable insurance products, including traditional life insurance and health insurance, as well as financial services. In addition to the products already offered by La Capitale and SSQ Life Insurance, Beneva also plans to offer new products and services to customers, thanks to the increased scale and resources of the merged company.

Beneva Insurance offers clients insurance solutions that can be tailored to fit different needs, as well as additional professional services through Beneva Investment Services Inc. These enhanced service offerings include:

• Term Life Insurance
• Permanent Life Insurance Options (Whole Life Insurance and Universal Life Insurance)
• Critical Illness Insurance
• Disability Insurance
• Group and Individual Health, Dental, and Travel Insurance, and other Workplace Benefits
• Property and Casualty Insurance
• Wealth Management and Investment Products

How do I submit a claim to La Capitale?

You can submit insurance claims easily online through the Beneva website, or by contacting the company or your insurance advisor directly. You will have to use the same La Capitale insurance claim forms from before, so there’s no major difference in how claims are handled under Beneva.

How do I contact La Capitale?

You will have to contact Beneva, either through their website, via email, or by calling them at 1-855-747-7712. You can also head into one of their offices near you, if you’d prefer something in-person. Details of their office locations are available on their website.

Does life insurance cover suicide?

In most cases, life insurance policies will only cover death by suicide 2 years after the policy starts. If the insured person dies by suicide before that time, the insurance company will not give a cash payout to that person’s beneficiaries.

Just about every life insurance policy in Canada includes what’s called a “suicide clause“, which states this. But there can be rare exceptions. And in the case of medically-assisted death or medical assistance in dying, it’s not always so clear cut.

What’s a suicide clause?

A “suicide clause” is a standard part of most individual life insurance policies issued by Canadian insurers. It states that if the policyholder dies by suicide within a certain time frame, the insurance company will not make the death benefit payout to surviving family.

The suicide clause usually lasts for 2 years from the start of the policy. In other words, for the insurance company to agree to pay out for someone’s life insurance plan, that person must not die by suicide for at least the first 2 years after they signed up.

How does suicide affect life insurance payouts?

What happens with a life insurance payout when someone dies by suicide depends on:

• What kind of life insurance policy it was. Joint policies that are shared by two people would be handled differently than if there was just one person on the policy.
• When the suicide takes place. If it was during or after the suicide clause.
• The insurance company’s own rules. Your policy wording will normally state exactly how your provider would deal with a death by suicide.

We’ll go over these scenarios below. But first let’s take a quick look at how life insurance works to better show how it can be affected in different ways.

How does life insurance work?

Life insurance, very simply, is an agreement between you (the policyholder) and an insurance company. Under this agreement, you pay a certain fee (premium) to the insurance company every month or year. In turn, when you pass away, the insurance company will give a one-time, tax-free lump sum payout to whoever you named as your beneficiary or beneficiaries. Most people name their family members as their beneficiary — usually a spouse, child, sibling, or other close relative.

Life insurance costs depend on factors like age, sex, health, medical history, and lifestyle, among other factors. It also depends on the types of life insurance purchased — for instance, term life insurance or permanent life insurance. And, it is possible for someone to be denied life insurance if the company considers them too much of a risk.

A life insurance payout is referred to as a death benefit because the policyholder must pass away before the payment will be given to their beneficiary. But this payment can be used however the beneficiary sees fit. They can use it to help cover expenses like funeral costs, mortgage payments, and outstanding debts. Or, they could use it to take care of kids, pay for college tuition, maintain a certain lifestyle, or even travel the world. At the same time, a life insurance payout is not always guaranteed.

During the suicide clause period

If someone dies by suicide before the two-year period of their life insurance suicide clause is up, the company will not pay the death benefit.

However, some Canadian providers will refund any premium payments that had been made towards the policy up until that time. For example, providers like Desjardins and Empire Life both state in their policies that they will return payments made or the policy’s cash value if the insured person dies by suicide before the 2-year period is up.

On the other hand, some providers might deduct surrender fees or other penalty costs. In this case, they may refund premiums paid up until that point but only after subtracting the amount of fees from it first.

After the suicide clause period

Once the two years stated in the clause are up, the life insurance policy will function as normal. The provider will pay out if the individual passes away for any of the typical covered reasons, including suicide. You can see a list of the typical reasons below.

For joint policies

Joint policies are usually bought by couples. They cover two or more lives and can either be:

• Joint first-to-die: The policy pays out when the first person dies.
• Joint last-to-die: The policy pays out only after both people have died.

If someone with a joint last-to-die policy dies by suicide before the two-year suicide clause period is up, there will not be any change to the policy. The surviving policyholder will still be covered as usual.

Joint first-to-die is a bit more complex. The life insurer could simply refund any money paid toward the policy up until that time, as in other cases. Or, they could give the surviving person the choice to change the policy to joint last-to-die.

For instance, Industrial Alliance (iA) is one Canadian insurance company that provides this option. Its suicide clause is fairly extensive, and it states that it will change the type of policy to joint last-to-die PLUS recalculate premium costs based on the surviving person’s age.

This could leave the surviving partner paying much heftier costs than before, and just goes to show how complicated the impact of suicide on life insurance can be.

Does life insurance cover medically-assisted death?

Medical assistance in dying (MAID) may be considered its own special category by Canadian life insurance providers. Research and debate are still ongoing about whether MAID is considered suicide, since it’s only available for eligible individuals who are suffering from severe mental health issues.

For providers who consider medically-assisted death its own category, they will still pay the death benefit even if it’s before the 2-year period stated in the suicide clause.

But other providers consider it the same as death to illness. For instance, Edge Benefits refers to MAID as assisted suicide, but treat it as an illness-related death. So does Industrial Alliance (iA). Both of these providers would still provide a death benefit to an insured person in this circumstance.

Foresters does not consider MAID as suicide, but instead as its own category that will be covered. However, if it takes place during the 2-year period or contestability period, the company said it will check the medical reports very closely to make sure it’s not a false report before paying a claim.

So, different companies take slightly different approaches to this.

What to do if an insurance claim is denied because of suicide?

If a life insurance claim is denied because of suicide, it can be a particularly difficult time. However, it’s important to know that you have options. Here’s what you can do:

1. Review the policy. Before taking any action, it’s important to thoroughly review the deceased person’s life insurance policy and understand the terms of the policy. Check whether there was a suicide clause or other additional exclusions.
2. Contact the insurance company. If you believe the claim was denied in error, you can contact the insurance company and ask for an explanation of their decision. In some cases, and especially if you have new information to provide, you can also ask for a review of the claim.
3. Consider hiring a lawyer. The next step if you believe the claim was unjustly denied is to consider taking legal action. Many lawyers or other legal professionals specialize in life insurance claims and claim denial. They would be able to help you understand your legal rights and options, as well as guide you through the process of appealing the denial of your claim.
4. File a formal complaint. You can also file a complaint with an official body in your respective province, such as the Financial Services Commission of Ontario (FSCO). The FSCO and similar organizations are responsible for regulating insurance companies in each respective province. They also serve to help resolve disputes between policyholders and insurance companies.

It’s important to remember that if your life insurance claim is denied because of suicide, it’s not a reflection of your loved one’s worth or value. Rather, it’s a result of the terms of the policy and the insurance company’s interpretation of those terms.

How do life insurance companies determine if someone died by suicide?

Once an insurance claim is submitted, your insurance company will do its own investigation before making a payout. In the unfortunate instance of deaths by suicide, life insurers will usually look into the cause of death. This may include reviewing medical records, checking with law enforcement reports or police records, or even talking to family members or friends. After their investigation is done, they will determine whether the death benefit is payable or not.

Does life insurance ever pay out for suicide?

Deaths by suicide can be covered by life insurance companies in some cases, but it depends on several factors. As we said, suicide is a sensitive matter and there are many factors to take into consideration, even with a suicide clause in place.

Canadian life insurers may make special consideration if the life insurance policyholder was known to have suffered from mental health issues for a long time, and if the insurance company believes the individual was not of sound mind at the time of their death.

We always recommend reading the actual wording of your insurance policy to know exactly what will and will not be covered by your insurer. But we know it can be complicated to understand how things will play out if something unexpected happens.

If you have questions about your life insurance coverage, you can always speak with our  insurance experts.

What other factors could affect whether insurance companies pay out for suicide?

Aside from the suicide clause, some other factors that may affect whether an insurance company pays out for suicide in Canada include:

• Age and health status at the time of death
• Mental health history
• Prior suicide attempts
• Alcohol/substance abuse history
• Recent changes in behavior or circumstances (such as job loss, divorce, etc.)

What are other reasons why life insurance wouldn’t pay out?

There are several reasons why a life insurance policy may not pay out in Canada. Some common reasons include:

1. Suicide clause:

As mentioned earlier, most life insurance policies in Canada have a suicide clause that states they will not pay out in the case of suicide within the first 2 years of the policy.

2. Misrepresentation:

If the policyholder provided false information on their life insurance application, the policy may be declared void and the insurance provider may refuse to pay out.

3. Non-payment of premiums:

If the policyholder does not keep up with their monthly or annual payments for a long period of time, the policy may lapse. This could be grounds for denial of a claim.

4. Dangerous activities:

An insurance company may not pay out if someone with extreme, dangerous hobbies like skydiving or bungee jumping unfortunately passes away while doing one of these risky activities.

5. Contestability period:

Most traditional life insurance policies have what’s called a contestability clause or contestability period, which is usually 2 years. During this period, the insurer can investigate and deny a claim if it’s found that the covered person was not honest on their original life insurance application.

These are all more reasons why it’s so important to read through your insurance policy and understand the terms and conditions before you decide to buy.

If you need any help with reviewing an insurance policy to find out exactly what’s covered and what’s not, or for help with finding the right policy for your needs, you can always speak with the friendly insurance agents at PolicyAdvisor. We’d be happy to provide tailored guidance to make sure you have the best insurance policy for you and your family.