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September 2, 2025
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International Life Insurance for Canadians Abroad
International life insurance, or expat life insurance, provides coverage for Canadians living abroad. It protects your family by paying a lump sum to your beneficiaries upon your death, regardless of where it occurs. Expats need life insurance for income replacement, debt payoff, inheritance purposes, and investment opportunities.
While living and working abroad can be exciting, it does not negate your need for life insurance.
A local insurance plan may not offer adequate coverage for Canadians living abroad, making it essential to consider other options.
Individuals living abroad require life insurance just as much as those residing in Canada.
This is where international life insurance comes in. Explicitly designed for expats, it allows you to protect your family’s financial future.
What is international life insurance?
International life insurance, also known as expat life insurance, is designed for Canadians living outside their home country. This type of coverage pays a lump sum to your beneficiaries upon your passing, regardless of whether you die overseas or in your home country.
The payout aims to replace your income, ensuring that your family can maintain their standard of living even in your absence. Your loved ones can use the proceeds to cover everyday living expenses, monthly bills, and debts such as the mortgage and tuition fees.
Why do expats need life insurance?
Here are a few reasons why you may need life insurance if you live outside Canada (or plan to move out of Canada). Having an expat life insurance policy is crucial for adequate coverage while living abroad.
Income replacement: If you pass away, the insurance payout can replace your income, helping your family maintain their standard of living.
Pay off debts:Your spouse can use the insurance proceeds to pay off debts such as mortgages, car loans, and credit card loans.
Leave an inheritance: This can be an affordable and effective way to pass on wealth. Your beneficiary receives the death benefit directly upon your passing. They are free to use it however they choose and typically don’t have to pay income tax on the amount received.
Build an investment: Some insurance policies include cash value that increases over time. A part of your premium payments is used to build cash value, which grows tax-deferred. As a policyholder, you can access this money anytime while alive.
How does international life insurance work?
International life insurance works the same way as other life insurance. International life insurance ensures financial protection for loved ones regardless of the insured's location.
You choose coverage that works best for you and pay premiums on time. In exchange, the life insurer pays a death benefit to your beneficiary when you pass, as long as the death occurs while the policy is active.
International life insurance policies usually require paying premiums in the national currency, but some plans may accept specific foreign currencies. These policies pay a death benefit even if you are living or working abroad at the time of your death. However, they may still include elusions and limitations.
For example, some plans may have war exclusion clauses. If you have such a policy, your beneficiary will not receive a payout if your death is directly or indirectly a consequence of war. Therefore, carefully read the fine print before signing to ensure you understand.
What types of international life insurance are available?
Canadians moving or living abroad typically have two options for an international life insurance policy: term life and whole life.
Global term life insurance is a coverage option specifically designed for expatriates. While both pay out a death benefit when you die, they work differently. There’s a considerable price difference, too. Knowing these things can help you choose the right plan for your unique situation.
Term Life Insurance
Term life insurance covers you for a set period. Generally, these policies are available for 10, 20, or 30 years. Depending on the insurer, other term-length options may also be available. Ensure the term length you select is neither too short nor too long. Otherwise, coverage may end while you still have significant financial obligations, like child-rearing expenses or a mortgage, or continue even when you no longer need it.
To ensure you choose the correct term length, ask yourself: What is my most significant financial obligation, and how long will it likely last? Like most Canadians, if a home mortgage is your major financial commitment and will last another 18 years, a 20-year-term life plan may be right for you.
Your policy pays out if your death occurs during the policy term. If you outlive this period, your beneficiary will not receive a death benefit.
At the end of the policy term, if you still need coverage, you can renew it. Most policies don’t require a medical exam at the renewal, but some do. Read the policy document to understand its terms and conditions. Either way, your premium rate will go up.
Pros
Cons
Affordable premiums
Comes with an expiry date
Provides cover for as long as you need it
No cash value
Easier to understand
Who Should Consider It?
Married couples or people who split expenses with their partners. Term life insurance can replace your income and provide financial stability to your spouse.
Parents and people planning to have kids. Term life insurance offers an affordable way to secure the financial future of your family.
Homeowners with a mortgage. Your term life plan proceeds can help your loved ones pay off the remaining mortgage balance.
Whole Life Insurance
True to its name, whole insurance covers your entire life. Your beneficiary will eventually receive the sum assured, provided you keep up with the premium payments.
Along with the death benefit, these policies build cash value. You can access the cash value anytime during your lifetime by withdrawing it or taking a policy loan. Most people use their policy’s cash value to fund a big purchase, like a home down payment, meet a financial emergency, or supplement retirement income.
The cash value grows at a fixed rate on a tax-deferred basis, meaning the CRA doesn’t take a cut as it grows. You pay tax on the interest and earnings of the cash value only when you use them. Accessing the cash value post-retirement, when you’ll likely be in a lower tax bracket than the one you’re in now, could save you money on your taxes.
Pros
Cons
Combines permanent life insurance coverage with cash value
Expensive premiums (up to 10 times costlier than term life insurance premiums)
Zero risk as the cash value grows at a fixed rate every year
Other investment vehicles may offer better returns
Withdrawing from or borrowing against the cash value is easy, simple, and quick
Who Should Consider It?
Those who want a policy to last their entire life. Whole life insurance doesn’t have an end date, giving you peace of mind that your beneficiary will receive a death benefit no matter when you die.
High-net-worth people have maxed out their other investment vehicles. Whole life plans double up as investment tools, allowing you to diversify your investment portfolio.
Those who want to leave money to a charity. Because the payment of a death benefit is guaranteed, whole life insurance can be used for leaving an inheritance or other purposes, such as estate planning.
How much does international life insurance cost?
Life insurance companies calculate premiums using age, health, policy type, and coverage limits. They may also factor in their calculations in the foreign country you are living in or moving to. Your premium rate may increase if that country has political unrest or poor healthcare infrastructure.
Generally speaking, the younger you are, the more affordable life insurance premiums. This is why financial experts recommend putting coverage in place when you’re still young. It allows you to lock in a low rate for the duration of the policy term. Good health and an active lifestyle also help you save money on insurance premiums.
On the other hand, a serious underlying illness or multiple minor health concerns can push up the premium rate, as can unhealthy lifestyle choices like smoking. The coverage type (and the death benefit amount) you opt for also impacts the premium cost. Term life can be up to 10 times more affordable than domestic life insurance policies.
Does international life insurance require a medical exam?
If you are living outside Canada, you will usually have to go through the same application process as anyone applying for coverage in Canada. You will be asked a set of health-related questions and might be asked to take a medical exam, depending on the level of coverage you have applied for and your age.
The life insurance medical exam is similar to the annual physical and usually takes 15 to 40 minutes. During the exam, a paramedic will note your height, weight, blood pressure, and pulse and collect your urine and blood samples. Some other tests, like ECG, may be carried out if you have certain health conditions.
The life insurance medical exam is a crucial part of the application process. It allows the insurer to calculate the risk of insuring you and determine your premium.
Not all life insurance plans require a medical exam, but most traditional term life and whole-life policies do. Policies that let you skip the exam are usually a bit pricier.
How do you choose between international life insurance companies?
It is important to understand the tax implications and beneficiary arrangements with a life insurance company, as these can vary significantly depending on the beneficiary's country of residence. Select a financially sound company with a good reputation, which offers the type of coverage you need and offers competitive premiums.
International Life Insurance for Groups and Employers
International life insurance for groups and employers is a valuable benefit that can be offered to employees as part of a comprehensive compensation package. This type of insurance provides coverage for employees and their families, regardless of their location worldwide. By offering international life insurance, employers can demonstrate their commitment to the well-being and financial security of their employees.
Key benefits of international life insurance for groups and employers include:
Attracting and retaining top talent: In a competitive job market, offering robust life insurance plans can make your company more attractive to potential employees.
Providing peace of mind: Employees can feel secure knowing that their families are financially protected, no matter where they are in the world.
Enhancing employee benefits packages: A comprehensive benefits package that includes international life insurance can improve overall job satisfaction and loyalty.
Demonstrating commitment to employee well-being: Offering such benefits shows that the employer values the financial security and well-being of their employees.
Employers can choose from a range of international life insurance plans, including term life, whole life, and universal life insurance. These plans can be tailored to meet the specific needs of the employer and their employees, ensuring that everyone receives the appropriate level of coverage.
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While international life insurance policies provide comprehensive coverage, there are some common exclusions that policyholders should be aware of. These exclusions may vary depending on the insurance company and the specific policy, but common exclusions include:
War and terrorism: Death or injury resulting from acts of war or terrorism is typically not covered.
Self-inflicted injury or death: Policies usually exclude coverage for self-inflicted injuries or suicide.
Hazardous activities: Participation in dangerous activities, such as extreme sports, may be excluded from coverage.
Criminal activity: Death or injury resulting from involvement in criminal activities is generally not covered.
It’s essential to carefully review the policy terms and conditions to understand what is covered and what is excluded. Policyholders should also ask questions and seek clarification if they are unsure about any aspect of the policy. Understanding these exclusions can help you make an informed decision and ensure that you have the right life insurance coverage for your needs.
Why Trust a Reputable Insurance Company?
When choosing an international life insurance policy, it’s essential to select a reputable and trustworthy insurance company. A reputable insurer will provide policyholders with peace of mind, knowing that their claims will be paid promptly and fairly.
Key characteristics of a reputable insurer include:
Financial stability and strength: A financially stable insurance company is more likely to honor claims and provide reliable coverage.
Excellent customer service: A long history of providing excellent customer service indicates that the insurer values its policyholders and is committed to meeting their needs.
Wide range of policy options: A reputable insurer offers a variety of life insurance policies with flexible coverage terms to suit different needs.
Strong industry reputation: An insurer with a strong reputation in the industry and among policyholders is more likely to be trustworthy and reliable.
Regulatory compliance: A reputable insurer complies with regulatory requirements and industry standards, ensuring that they operate ethically and transparently.
By choosing a reputable insurer, policyholders can ensure that they receive the coverage and support they need, whenever and wherever they need it. This peace of mind is invaluable, especially when living or working abroad.
Moving overseas after purchasing life insurance — will your coverage remain in force?
Most of the time, if you have a life insurance policy from a Canadian provider and you immigrate to another country, there’s no issue as long as your plan has no travel exclusions. The life insured should check for any travel exclusions in their policy. Your coverage will remain valid despite the address change. Upon your death, the insurer will pay a lump sum to the designated beneficiary.
Most term life and permanent life insurance policies don’t have any international travel exclusions. Nevertheless, checking this with your provider before you board the plane is a good idea. The last thing you would want is to pay premiums for a policy that won’t pay out because you moved outside Canada.
You’ll likely be asked to continue making premium payments from a Canadian bank account. This ensures your policy doesn’t lapse due to non-payment because of a delay in international money transfer or any other such issue.
Along with international coverage validity, check if your policy has any other limitations or exclusions, such as a death in a war zone. If it does and you are moving to a country where a war is going on, such as Ukraine, explore other options for coverage. Working with an experienced, independent insurance broker may improve your chances of securing a suitable life insurance policy.
Conclusion
International life insurance is an option for people living or moving outside Canada. It pays a tax-free, lump-sum amount to your beneficiary when you die. The two most common coverage options are term life and whole life.
Regardless of which one you need, Dundas Life can help you lock in a low premium rate. And if you’re unsure which one is a better fit, we can help you with that too. Drop us a line or have us call you to secure the right coverage for your family at a great price. Book a call to speak with one of our licensed advisors today.
Frequently Asked Questions (FAQs)
What happens if I move to a new country after purchasing an international life insurance plan?
Life insurance policies are typically valid globally. If you move to a new country, your insurance contract remains valid if you keep up with the premium payments. Your beneficiary will receive a death benefit upon your passing, regardless of where you live when you die.
What happens when I fail to make my premium payments?
If you miss a premium due date, you will likely get a fixed extra time — called the grace period — to pay. The grace period usually lasts 30 or 31 days, depending on your policy and insurance carrier. No interest is charged if you pay the premium within this period. But if you miss the grace period, too, the policy lapses. Your beneficiary will not receive a death benefit, and you’ll lose all the premiums you’ve already paid.
What is the best time to buy international life insurance?
Life insurance needs vary from individual to individual, so there’s no single recommended time to purchase life insurance. That said, most people tend to buy life insurance at significant life events, like marriage, the birth of a child, a house purchase, etc.
How much life insurance do I need?
You need enough life insurance to cover all your financial obligations after death. There are multiple ways to figure out the right coverage amount, such as the “multiply your income by 10 or 15” method and the DIME method, which factors in your debts, income, mortgage payments, and education expenses for your children. However, none of these methods provide an estimate tailored to your situation. It’s best to speak with a licensed insurance broker for a customized estimate.
Do I need private coverage if I have life insurance coverage through work?
Group life insurance through work is usually capped at one or two times the annual salary and is not portable, meaning you’ll lose coverage if you switch jobs. For these reasons, getting private coverage is a bright idea, especially if you have a young family and several dependents.
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