There are so many life insurance options in Canada, and that makes it very difficult to pick the right one for you. We have put together reviews for the top life insurance providers and grouped them in specific categories. Regardless of your life insurance needs, personal preferences, or budget, you can shop with confidence and pick a suitable plan and provider.
Since life insurance is a long-term contract, we look at multiple factors while evaluating life insurance carriers. These include:
- Price: How much will the life insurance coverage cost?
- Financial Strength: Is the provider financially healthy? How does their long-term financial forecast look?
- Time: How much time does the life insurance company take to approve applications for life insurance?
- Trustworthiness: How good is the provider when it comes to settling claims? What do their customers say about them?
- No Medical: Does the insurer only offer traditional plans or are no-medical options available?
- Coverage: Does the life insurance company only offer small death benefits, or can you purchase $1 million or more in coverage?
What is life insurance and how does it work?
Life insurance is a legally binding contract between you and an insurer. You agree to pay the life insurance premiums, and, in return, the life insurance carrier promises to pay a specific amount to your beneficiaries upon death. In essence, life insurance protects your loved ones from the potential financial impact when you pass away. The payout can help them replace part, or all your income, and pay off debts. This can ensure they are able to live comfortably after you’re gone.
Types of life insurance
There are different types of life insurance policies to suit different needs, preferences, and budget requirements. These include:
Term Life Insurance
Term life insurance policies come with an expiry date and have one goal — to pay the death benefit. The policy term can be as short as one year, or as long as 40 years. If you pass away during the term life insurance policy term, the life insurance carrier will pay the death benefit to your beneficiaries. If you outlive the term, there will be no payout. However, most providers allow you to renew the term life insurance plan without a medical check, up to a specific age. Term life insurance coverage does not include additional bells and whistles, like cash value. This makes them generally more affordable.
Permanent Life Insurance
Permanent life insurance policies offer coverage you cannot outlive. It is the closest thing to ‘buy it, forget it’ life insurance, because you do not have to renew the permanent life insurance policy again. With permanent life insurance options, you can rest easy knowing your family will receive the death benefit regardless of when you pass away. Many permanent life insurance policies also include an investment component, called cash value. Funds in this account grow tax-deferred, and you can access them anytime you like. Generally speaking, permanent life insurance options are six to 10 times costlier than term life insurance. The two most common types of permanent life insurance coverage are whole life insurance and universal life insurance.
Whole Life Insurance
Whole life insurance is a permanent life insurance plan that gives you lifelong coverage and an investment tool to accumulate money on a tax-deferred basis. A part of your premium goes to cover the whole life insurance cost and administrative fees, while the remainder funds the built-in investment account.
Universal Life Insurance
Universal life insurance is a permanent life insurance plan that provides lifetime protection. The main difference between universal life and whole life insurance is that the former offers you better control over how your money is invested. It also gives you a certain degree of freedom regarding your premium payments and death benefit. You can increase or reduce them within permissible limits if need be. Compared to whole life insurance, universal plans are more complex and require closer monitoring.
No Medical Life Insurance
No-medical life insurance does not require a medical exam to prove insurability. This makes it easier to qualify for, and fast-tracks the application process. On the downside, no-medical policies are generally more expensive than fully underwritten plans. They usually also have smaller payouts.
Simplified Issue Life Insurance
Simplified issue life insurance doesn’t involve a medical, but you will have to answer a few health questions when you apply. The insurer will decide your eligibility and set your premium rate based on your answers. These policies often include a waiting period — which is typically two years. If you pass away during this time, the insurer will not pay the death benefit; instead, it will refund the life insurance premiums you have already paid.
Guaranteed Issue Life Insurance
Guaranteed issue does not require taking a medical exam, nor answering health questions (medical underwriting) to prove eligibility. As such, life insurance coverage is guaranteed as long as you are under a certain age. However, the death benefit amount is rather small. It is usually between $25,000 to $50,000. Most people take a guaranteed acceptance life insurance policy to cover end-of-life expenses or to leave a small legacy to their children or grandchildren.
How do I buy life insurance in Canada?
You can purchase life insurance online, through a broker, or through an agent. Whichever way you buy, make sure you shop around to ensure you are getting the best value for money.
Directly through an insurance company.
You can do so much online these days: order food, book a holiday, rate your previous employer — and even buy life insurance. Buying life insurance online directly from the provider is simple, easy, and quick. If you know what you need and do not need help from a life insurance agent or broker, it may be right way to go.
Through an independent broker.
Life insurance brokers act as an intermediary between insurance companies and consumers. Brokers represent buyers, not insurance providers. This means that they should be able to offer you unbiased advice based on your needs.
Through an independent local insurance agent.
Like independent brokers, life insurance agents act as an intermediary between insurance providers and buyers. Some agents represent only one company and are called captive agents. Others work as independent agents, meaning they represent several providers. Since an independent agent works with many carriers, they can offer you more options. More life insurance options can mean lower premiums for you. However, all insurance agents represent insurance providers, not buyers. So, they might not always offer unbiased advice.
How to choose a life insurance company and policy
Life insurance needs are rarely one-size-fits-all. No single provider can be the best option for everyone. Determining your needs, health, and budget will help you decide which type of life insurance will work best for you. Then, you can start looking for a suitable provider.
For example, if you need life insurance protection only until retirement, you may be better off considering a term life insurance plan. But if you want life insurance for estate preservation purposes, a permanent life insurance policy may be the right option since the payout is guaranteed. On the other hand, someone with a serious medical illness may want to opt for a no-medical life insurance policy. Not sure which type of life insurance product is best for you? Consider speaking to an independent broker, agent, or a representative at Dundas Life, who will help you identify the right solution.
Next, compare quotes from multiple providers. To simplify your search, we have listed the best providers for specific categories.
The Best Life Insurance in Canada
Best Life Insurance Companies for Affordability
Headquartered in Winnipeg, Wawanesa Insurance offers a number of different types of insurance, including home, auto, farm, commercial business and life insurance. They were founded in 1896, and have strong financial health, according to their AM rating. Compared to their competitors, they offer one of the most affordable life insurance policies.
Assumption Life was founded in 1903, and has grown steadily since then, now with over $1.7 billion in assets. They are most known for their no-medical term life insurance policy, however they offer a number of insurance solutions for all Canadians. They offer a variety of affordable life insurance.
Best Life Insurance Companies for Couples
The Desjardins Group is one of the largest financial institutions in Canada, with over 20 subsidiaries. They offer a wide range of products and services, such as life and general insurance, venture capital, securities brokerage and asset management. Desjardins Financial Security is the branch that life insurance falls in, and they have over 6,000 advisors that can help you find a policy. Couples and business partners can split a joint policy into two individual permanent life insurance plans if their needs change in the future. Available for three term life insurance plans — Term 10, Term 20, and Term 30.
Manulife is the largest, and one of the oldest life insurance companies in Canada. They are best known for their term life insurance policies and offer a variety of them to suit the unique needs of Canadians. The rates of Manulife are generally best for people looking for coverage under $400,000, and who are in good health. Manulife’s combined coverage policy is a highly regarded plan for couples.
Industrial Alliance is a wealth management company, and they sell financial products across North America. They are ranked among the top 5 life insurance companies in Canada and provide a plethora of life insurance options that will be suitable for people with a variety of different lifestyles.
Best for Seniors
Equitable Life of Canada was founded in 1920 and specializes in life insurance and group benefit plans. It has a great life insurance policy for seniors, up to the age of 85.
Best Life Insurance Company for Smokers
Foresters Life Insurance is known for their more affordable life insurance policies. Since being founded in 1874, they have over 3 million clients across Canada, the United States and the United Kingdom. They offer a competitive plan for smokers, and they also have a Quit Smoking Incentive Plan which will allow former smokers to have lower rates on their life insurance policy.
Best Life Insurance Company for Pre-existing Medical Conditions
Canada Protection Plan
Canada Protection Plan is a relatively young name in the life insurance industry. Founded in 1992, they specialize primarily in simplified issue, and no medical exam life insurance policies. Their guaranteed acceptance life policy does not involve a medical exam or medical underwriting and is targeted towards individuals who otherwise may not qualify for life insurance, because of their medical conditions.
Best Life Insurance Companies for the Most Coverage
The Royal Bank of Canada (RBC) is one of Canada’s most trusted and well-known insurance providers. They are the largest bank-owned insurance providers in Canada, with over four million customers, and a plethora of life insurance policies. YourTerm Life Insurance is RBC’s flagship product, and it offers coverage up to $25,000,000, with term life insurance lengths ranging from 10 to 40 years.
Manulife is the largest life insurance company in Canada. Manulife’s Family Term Life and Business Term Life Insurance policies both offer coverage up to $20,000,000. These two plans have the most coverage. However, their flagship product Manulife CoverMe only provides coverage up to $1,000,000.
The pros and cons of Manulife can be viewed above.
Best Life Insurance for Flexibility
Empire Life is among the top 10 largest life insurance companies in Canada today. They are very reputable, and have won the Life and Health Insurer of the Year title in 2019, as well as three times prior to this. They are generally very good with their pricing, and offer a variety of term life, permanent life, guaranteed life, critical illness insurance and many more.
Best for Term Life
RBC offers a number of term life insurance lengths, including 10, 15, 20, 30 and 40 year options. However, you also have the option to customize your term life length, as they allow you to pick any length between 10 and 40 years! They have competitive prices, and an impressive amount of coverage associated with their term life insurance policies, depending on which policy you choose.
The pros and cons of RBC can be viewed above.
Industrial Alliance (iA)
Similar to RBC, Industrial Alliance (iA) has a product called Pick-a-Term, where you can choose your own term life insurance length. They allow you to buy a policy that has a term life length anywhere from 10 to 40 years!
The pros and cons of iA can be viewed above.
Best Life Insurance Companies for Whole Life Insurance
Manulife is one of Canada’s largest insurance companies, and the first one to offer e-delivery of life insurance policies. A distinct feature is Manulife’s Vitality program. It lets you earn credit toward your program if you participate in a health program and demonstrate good lifestyle habits.
The pros and cons of Manulife can be viewed above.
Sun Life is currently headquartered in Toronto but is a huge international financial organization with a presence around the world. On top of insurance, they are also well known in the wealth and asset management industry and sell their products through over 112,000 advisors.
Best Value For Your Money Life Insurance
RBC has highly competitive rates while still being a leading life insurance provider in Canada. They offer many options and flexibility for their customers as well. Going with RBC gives you life insurance coverage from a trusted provider while keeping the prices similar to that of a smaller insurer.
Best for Bundling
Ivari is a well established Canadian life insurance company. They offer a wide selection of products and product combinations. They are a great option for individuals who want a highly customizable option for life insurance.
Best Life Insurance for Quick Issue Options
Humania speeds up the life insurance policy process with their online HuGo Life Insurance option. It is a quick and painless way for individuals to get life insurance from a trusted Canadian provider.
Best life insurance for technology
As the largest life insurance company in Canada, Manulife has put in the effort to make the life insurance process easily accessible from your computer. They offer an electronic policy delivery that can provide you with up to 2 million dollars worth of coverage without leaving your house.
Best life insurance for customer service
As one of the largest life insurance providers in Canada, Sunlife has many branches located throughout Canada. Their experience allows them to make in-person insurance quick and easy for their customers.
Best for children
Foresters adds a child term rider to your insurance policy for no added cost. Their child term riders start at a face value of $10 000 but can go up to $50 000 once the child turns 16. It is a great option for parents who need life insurance themselves but, are also considering it for their child.
Best for giving back
Foresters life insurance suits individuals with ever changing life insurance needs. Their term life insurance options are easily exchangeable to longer term life plans as well as permanent life insurance policies. If you are looking for life insurance but, unsure which policy will last, Foresters life insurance is right for you.
Best for member benefits
Manulife Vitality is a unique life insurance product that few other life insurance companies offer. It provides many perks to it's customers beginning with a free Apple Watch and a discount to Goodlife Fitness just from signing up. Manulife Vitality awards points to customers for completing exercise and health goals each week. These points can be spent on many things such as an Amazon gift card. Manulife Vitality is the perfect choice for individuals looking for life insurance that rewards you for being healthier.
Best life insurance for families
Equitable life is a reliable Canadian life insurance company that offers both term life and permanent life insurance policies. What stands out is that Equitable life provides multi-coverage for the same policy, meaning you and your family can all have coverage under the same contract which will help keep life insurance costs lower.
Tens of thousands of Canadians have selected Canada Life as their life insurance provider. They have a strong financial history, and currently boasts $219 million in assets. Although you cannot select your own policy term life insurance length, Canada Life does offer a 5-year policy. Which is incredibly rare, as most life insurance companies start at a 10-year policy. Canada Life has a product called Canada Life My Term life insurance, where a customer can choose their own policy length, from anywhere between five and 50 years, up to the age of 85.
Frequently Asked Questions
What is the best type of life insurance in Canada?
While there is no one-size-fits-all answer, term to 100 life is seen as the perfect mix of both term life and permanent life plans. term to 100 is a permanent life policy that you only have to pay until you turn 100. Even though it is permanent life insurance coverage, the premiums are lower than other permanent life insurance plans. The reason for this is that there is no accumulated cash value with term to 100.
What is the most trusted life insurance company in Canada?
Both Sun life and Manulife rank at the top of trusted life insurance providers in Canada. With their experience, popularity and credibility, you can buy a policy from either of them and feel secure about your plan.
How much life insurance coverage do I need?
It is generally recommended that you purchase a policy with a face value somewhere around 7-10 times your annual salary.
How much does life insurance cost?
Here are life insurance quotes for standard non-smokers with a term-20 life insurance plan and $250 000 of coverage.
At what age should you stop buying term life insurance?
Since term life insurance only lasts for a specific amount of time, it may be hard to know what length of term insurance is right for you. The answer is to have a term life plan for as long as you have high expenses that would hurt your family if you were to pass. Many individuals keep a term insurance policy for as long as they have a mortgage and then discontinue life insurance after that.
Should I buy a permanent insurance policy or a term insurance policy?
Whether you should buy permanent insurance or term insurance depends on your life insurance goals. If you need life insurance because you have outstanding debts that will not last forever but, your family would struggle to pay on their own, term insurance is right for you. If you want life insurance to pay for funeral expenses or leave a lump sum of money when you pass, a permanent life insurance option would better suit your needs.
No single provider offers the number one life insurance in Canada to everyone. Life insurance needs are unique and each provider is different. The life insurance company that works best for your friend may not work for you. Before you start searching for an insurance carrier, first determine the factors that are most important to you. Additionally, regardless of whether you want to buy life insurance online, through an agent, or through a broker, grab as many quotes as possible. At Dundas Life, we work with top-ranking Canadian Life Insurers and can help you find a policy that suits both your long-term financial goals, and your current budget.
Why You Should Trust Us
Our team invested more than 100 hours in researching, evaluating, and reviewing the top life insurance companies in Canada to find the best ones. Want to learn about other life insurance companies, or looking for more options?