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Life is full of uncertainties, but your life insurance doesn’t have to be one of them. Whole life insurance offers lifelong protection, builds cash value, and provides many guarantees, such as level premiums, guaranteed death benefit, and guaranteed cash value growth.
To help you find the best whole life insurance company, we’ve evaluated many Canadian insurers on key metrics such as coverage options, affordability, additional benefits, and ease of applying. These are the ones that came on the top.
Key Takeaways:
- Manulife, Equitable Life, Sun Life, Canada Protection Plan, and RBC are our top picks for the best whole insurance companies in Canada
- Whole life insurance is a permanent life insurance policy with a savings component
- Comparing quotes from multiple providers is the best way to ensure you are getting the best deal
What is Whole Life Insurance?
Whole life insurance is a type of permanent life insurance, providing coverage that doesn’t expire and building cash value that grows a steady rate. Since the policy remains in force for as long as you live (of course, provided you pay the premiums on time), you can rest easy in the knowledge that your loved ones will receive a payout no matter what. In addition to the death benefit, whole life insurance provides benefits to you as well, in the form of cash value.
When you pay premiums, a portion of each payment is funneled toward a built-in savings component. Your policy’s cash value grows at a fixed rate — usually 1.5% to 3.5% — set by the insurance provider each year. It generally takes a few years for the cash value to grow to a usable sum, but once that happens, you can start accessing it through direct withdrawals and policy loans. You can this money to supplement your retirement savings, increase your policy’s death benefit, or cover your premiums.
Some whole life insurance policies, called participating whole life insurance, also give you a chance to earn annual dividends. You can take out dividends as cash, add them to your cash value, or use them to buy paid-up additions to increase your death benefit amount. Participating whole life insurance plans are more expensive than the standard whole life policies.
Here are the main features of whole life insurance:
- Whole life insurance is a type of permanent life insurance that offers guarantees for the death benefit amount, premium costs, and cash value growth
- Your beneficiary typically receives the death benefit, while the cash value is for you (the policyholder) to use any way you like
- Your policy’s cash value grow on a tax-deferred basis at a fixed rate
- Once your policy accumulates a certain amount of cash value, you can withdraw from or borrow against it
- Accessing cash value may have tax implications and reduce the death benefit amount
- You can take out all of the cash value at once by surrendering the policy, but if you do so, you will lose coverage and likely have to pay a surrender fee
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Why whole life insurance is important?
Permanent life insurance coverage and a built-in investment component make whole life insurance a unique product. If you have distinct or permanent obligations, you may benefit from buying whole life insurance.
You may want to look at whole life insurance if you want to:
Cover debts
Your debts do not simply disappear when you die. For instance, the person who inherits your house also inherits any outstanding balance on the mortgage. If you do not want to saddle your estate or heirs with debt, whole life insurance is a good option. Your beneficiaries can use the insurance proceeds to pay off the debt you leave behind.
Pay for funeral and other end-of-life expenses
The loss of a loved one is a stressful event and can cause a major emotional crisis, but that’s not all. With funerals costing upwards of several thousands, it can also lead to a financial hardship on families who must cover the costs. If you do not want to burden your family with your funeral and other end-of-life expenses, consider taking out a whole life insurance plan. Since there is no expiry date on the policy, your family will eventually receive the payout, which they can use to cover funeral and other expenses.
Ensure tax-efficient transfer of your estates
Life insurance provides liquidity to help offset your final tax bill, probate fees, and estate executor fees. These costs can cut deep into inheritances as your estate must pay them off before your assets can be distributed among your heirs. The proceeds of your whole life plan can help cover these costs, ensuring your loved ones receive the exact inheritance you wanted them to have.
Use the cash value to supplement your retirement funds
Whole life insurance is a popular retirement planning product, especially for those in higher tax brackets. Besides providing a lump sum in the event of death, it accumulates cash value. The cash value helps you diversify your investment portfolio, offers protection against market volatility, and can nicely supplement your retirement income. For the right kind of retiree, whole life insurance is a valuable retirement investment.
How does whole life insurance work?
Whole life insurance policies are life insurance and investment products rolled into one. These plans provide lifelong coverage, so your beneficiary will receive the death benefit amount regardless of when you die. The death benefit and premium rate remains the same throughout the duration of your policy.
There are also advantages to whole life insurance beyond the death benefit. A part of your premium payments is used for growing cash value, which grows tax-deferred. In other words, you will not have to pay tax on it while it’s growing. As a result of this, your money can grow faster since it’s not getting reduced by taxes every year. Also, if you access the cash value later in life, when you’re no longer earning a paycheck, your tax bracket is likely to be lower. This means you will pay less in taxes.
Once your policy’s cash value has grown to a certain amount, you can borrow money from your policy. In fact, whole life insurance can be one of the most convenient and low-cost financing options out there. If you borrow money against the cash value, you will not have to pay taxes on the loan as long as the policy in-force. If you directly withdraw from the cash value, the portion of the money that came from interest will be taxed. You can access all of the cash value at once if you wish to. However, doing so will end your insurance contract, so take this route only if you can do without life insurance protection. You may also have to pay a surrender fee, which can be as high as 10% of the cash value in the first few years.
Keep in mind taking out cash value reduces the death benefit for your heirs. If you withdraw from cash value, the death benefit will be reduced by the amount withdrawn. In the case of a policy loan, the loan balance at the time of your passing will be deducted from the death benefit.
Whole Life Insurance Terms and Their Definitions
If you’re in the market for a whole life insurance policy, you’re likely to come across certain technical terms such as:
Level death benefit: A level death benefit means the life insurance payout remains the same through the whole duration of the policy. Your beneficiary will receive the same amount whether you die shortly after buying the plan or many years later.
Level premiums: You pay the same premium rate for the duration of the entire policy.
Limited pay: With a limited pay whole life insurance policy, your coverage lasts but your premiums don’t. You can pay for the policy completely within a fixed period, like 5, 10, or 15 years.
Guaranteed cash value growth: Your policy’s cash value grows at a fixed rate set by the insurer each year. In other words, it is unfettered by outside events like economic downturns or prevailing interest rates.
Participating whole life insurance: A participating whole life insurance policy gives you an opportunity to earn annual dividends, in addition to lifetime coverage and cash value. The annual dividends aren’t guaranteed, but many life insurance carriers have a track record of paying them almost every year.
Dividends: Dividends are returns on the insurer’s investment performance. They are paid on an annual basis, and you can choose to receive them in cash or use them buy additional life insurance coverage or pay off policy loans. Depending on the insurer, you may have the option of leaving the dividend amount with it to accumulate interest. However, you’ll receive a tax bill when you eventually withdraw it.
Best whole life insurance companies in Canada
Manulife, Equitable Life, Sun Life, Canada Protection Plan, and RBC are among our top choices for the best whole insurance companies in Canada. However, it is possible that other providers may fit your situation better. This is why it is smart to get an overview of different insurance companies before you make a decision.
We rated life insurance companies in Canada on a range of key metrics, including coverage options, financial strength ratings, consumer reviews, and ease of applying. Next, we categorized providers based on situations in which they excel the most.
Best Overall: Manulife
Manulife is one of the few Canadian insurance companies that offer both participating and non-participating whole life insurance c.
Manulife’s Whole Life Insurance Plans:
1. Manulife Par
- Lifelong coverage
- Level premiums
- Two premium payment options: 20-pay and 10-pay
- Can cover up to two people
- Participating policy (meaning you’ll earn dividends)
- Minimum benefit amount is $100,000
2. Manulife Par with Vitality
Enjoy all the features of Manulife Par, along with an opportunity to earn value benefits of Manulife Vitality — a unique program that rewards you for healthy living.
3. Performax Gold
- Lifelong coverage
- Two premium payment options: Life pay and 15-pay
- Guaranteed cash value
- Coverage starts at 25,000
- Non-participating
Why We Picked Manulife
Manulife, one of the leading life insurers in Canada, offers three options for whole life insurance and competitive premium rates for all ages. People with an active lifestyle can save money by participating in the Manulife Vitality program.
Pros & Cons
Best for Participating Whole Life Insurance: Sun Life
If you are in the market for a whole life insurance plan that gives you an opportunity to earn annual dividends, Sun Life might be a great fit.
Sun Life’s Whole Life Insurance Plans:
1. Sun Par Accelerator
- Coverage amount ranges from $250,000 - $15 million
- 8 pay (meaning, you will pay premiums for eight years only while the policy remains in force as long as you life)
- Enhanced dividend options
- Premiums may fluctuate
2. Sun Par Accelerator II
- Coverage amount ranges from $250,000 - $15 million
- Three premium payment options: 10-pay, 20-pay, and life pay
- Dividend options include cash payment, yearly premium reduction, enhanced insurance, and paid-up additional life insurance
- Premiums may fluctuate
3. Sun Par Protector II
- Coverage amount ranges from $250,000 - $15 million
- Three premium payment options: 10-pay, 20-pay, and life pay
- Dividend options include cash payment, yearly premium reduction, enhanced insurance, and paid-up additional life insurance
- Premiums may fluctuate
Why We Picked Sun Life
Sun Life offers more options for participating whole life insurance cover than most other insurers we reviewed. Plenty of riders are available with each plan, making it easier for you to tailor the policy to your unique situation.
Pros & Cons
Best Mutual Insurance Company: Equitable Life
Want to only work with an insurance company that is 100% owned by its policyholders? Then Equitable Life might be right up your alley.
Equitable Life’s Whole Life Insurance Plans:
1. Equimax Estate Builder
- Higher long-term cash values
- Coverage amount ranges from $11,000 - $20 million
- Level premiums
- Three premium payment options: life pay, 10 pay, and 20 pay
- Can cover up to two individuals
2. Equimax Wealth Accumulator
- Higher early cash values
- Coverage amount ranges from $11,000 - $20 million
- Level premiums
- Twp premium payment options: life pay and 20 pay
- Can cover up to two individuals
Why We Picked Equitable Life
Equitable whole life insurance offers competitive cash values, an option to add critical illness cover, and an opportunity to earn dividends. While dividends are not guaranteed, the insurer has a good track record of paying them almost every year. Its Equimax Estate Builder plan, which provides higher long-term cash values, is an ideal option for estate planning purposes. In contrast, consider the Equimax Wealth Accumulator if higher early cash values appeal to you.
Pros & Cons
Best for High-Dollar Coverage: RBC
RBC offers two participating whole life insurance plans, both of which cover you for up to $25 million.
RBC’s Whole Life Insurance Plans:
1. RBC Growth Insurance
- Death benefit ranges from $25,000 to $25 million
- Guaranteed cash value (access it after 5th policy year)
- Three premium payment options: life pay, 10 pay, and 20 pay
- Five options for receiving dividends
- Juvenile guaranteed insurability benefit included for free
- Optional benefits such as children’s term rider, additional term insurance, and deposit option
2. RBC Growth Insurance Plus
- Death benefit ranges from $25,000 to $25 million
- Guaranteed cash value (access it after 1st policy year)
- Three premium payment options: life pay, 10 pay, and 20 pay
- Five options for receiving dividends
- Juvenile guaranteed insurability benefit included for free
- Optional benefits allow you to tailor the plan to your needs and budget
Why We Picked RBC
RBC offers whole life insurance cover for up to $25 million. This was one of the highest-value policies of all insurers we reviewed. While the additional coverage likely comes at a cost, it could be a suitable option for high-net-worth individuals or business owners. RBC is also one of the few Canadian insurers that offer juvenile guaranteed insurability benefit, which lets your child or grandchild buy additional coverage after they turn 18 without providing proof of good health, for free.
Pros and Cons
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Best for No Medical Cover: Canada Protection Plan
If you need whole life insurance cover quickly or have a medical condition that disqualifies you from traditional life insurance, Canada Protection Plan could help you secure your family’s future. It offers several plans, making it easier for you to buy no medical cover that best fits your situation.
Canada Protection Plan’s Whole Life Insurance Policies:
1. Deferred Life
- Buy up to $75,000 of coverage, depending on your age
- Transportation benefit and terminal Illness benefit included for free
- Accidental death benefit available as a paid add-on
- Ideal for people with a serious medical condition, such as cancer or heart attack
2. Deferred Elite Life
- Death benefit ranges from $5,000 - $350,000
- Transportation benefit and terminal Illness benefit included for free
- Child term benefit and accidental death benefit available as a paid add-on
- Ideal for people who have a serious medical condition and need higher coverage amounts
3. Simplified Elite Life
- Death benefit ranges from $5,000 - $500,000
- Transportation benefit and terminal Illness benefit included for free
- Hospital cash benefit, child term benefit and accidental death benefit available as a paid add-on
- Ideal for extreme sports enthusiasts who are in relatively good health
4. Guaranteed Acceptance Life
- Death benefit ranges from $5,000 - $50,000
- Transportation benefit and terminal Illness benefit included for free
- Accidental death benefit available as a paid add-on
- Ideal for people who don’t qualify for traditional coverage because of poor health, a high-risk hobby or occupation, or a history of substance abuse
Why We Picked Canada Protection Plan
Canada Protection Plan offers more options for no-medical coverage than most other insurers we reviewed. They also offer no-medical plans with higher death benefit amounts, so you can buy adequate protection for your family but without the hassle of undergoing a medical exam.
Pros & Cons
| Pros | Cons |
| Multiple simplified issue plans | No medical plans tend to be costlier than traditional whole life insurance |
| Buy no-medical cover of up to $500,000 | Not the best option for people who want to treat their policy as a cash asset |
| Simple, straightforward, and shorter application process |
Best for Flexibility: BMO Insurance
BMO Insurance offers two whole life insurance plans, both of which let you manage the insurance coverage if your financial situation changes down the road.
BMO Insurance’s Whole Life Insurance Plans
1. BMO Estate Protector
- Death benefit ranges from $50,000 - $20 million
- Three payment options: life pay, 10 pay, and 20 pay
- Level premiums
- Performance bonus
- Option to make additional premium payments to optimize cash value growth and increase the death benefit
- Option to adjust the coverage if your situation changes
2. BMO Wealth Accelerator
- Death Benefit amount ranges from $50,000 to $20 million
- Level premiums
- Option to adjust the coverage if your situation changes or make additional premium payments
Why We Picked BMO Insurance
BMO insurance whole life plans offer more flexibility than most other policies. You can make additional premium payments to boost cash value or increase the death benefit or manage the coverage in different ways if your life insurance needs or financial situation change.
Pros & Cons
Best for Children’s Plans & Limited Pay Premium Options: Desjardins
If you want to buy a whole life insurance policy for your child or grandchild or are looking for a policy that offers a lot of premium payment options, Desjardins could be a perfect choice.
Desjardins’ Whole Life Insurance Plans
1. Participating Life Insurance
- The death benefit, premiums, and some cash surrender values are guaranteed
- 5 dividend options
- Multiple premium payment options: 5 Pay, 10 Pay, 20 Pay, and life pay
- Wide range of additional benefits, including waiver of premium in the event of disability, guaranteed insurability benefit, accidental fracture, and business insurability coverage
- Best for parents or grandparents who want to gift something valuable, practical, and long-lasting to their child or grandchild
2. Permanent Life Insurance
- Premium payment options include 10 pay, 15 pay, 20 pay, and pay up to age 65 or 100
- Fixed premiums
- Get back part of the premiums paid if you cancel or reduce the coverage
- Reduced paid-up insurance option included
- Option to top up your coverage with long-term care advance or critical illness
- Several paid add-ons available, including including waiver of premium in the event of disability, guaranteed insurability benefit, accidental fracture, and business insurability coverage
Why We Picked Desjardins
Desjardins is the only Canadian insurance company that offers 5 Pay option with its whole life insurance plan. This unique premium payment option makes it easier for parents or grandparents to fund a whole life plan for their child or grandchild. Desjardins also offer more premium payment options than any other insurer.
Pros & Cons
Best for Additional Benefits: Beneva
If additional benefits, like disability of waiver of premium benefit, are a deal breaker for you, you should strongly consider Beneva.
Beneva Whole Life Insurance Key Features
- Offers all the usual benefits of standard whole life insurance (level premiums, death benefit, and guaranteed cash value growth)
- Can cover up to 5 people
- Include 4 free-of-charge additional benefits: waiver of premium in the event of disability, extreme disability benefit, accidental fracture benefit, and accidental death & dismemberment
- Offers two paid add-ons: child rider and critical illness insurance
- Several payment options
- No-medical whole life insurance plan available
Why We Picked Beneva
Beneva offers four additional coverages at no extra cost. You also have the option to top up your policy with critical illness insurance cover and/or child rider.
Pros & Cons
Best for Charitable Giving: Canada Life
Canada Life offers a single-premium payment participating whole life insurance that is designed specifically for charitable giving. Besides that, it also has a whole life insurance plan to help you secure the financial future of your loved ones.
Canada Life My Par Gift: Policy Overview
- One-of-its kind participating whole life insurance plan
- Designed specifically for charitable giving
- Single premium payment allows donors to make a bigger impact with their donation
- The registered charity is the policy owner
- Dividends can be used in many ways
- Builds cash value
- You can claim the single premium payment as charitable donation when you file tax
Why We Picked Canada Life
Canada Life offers a specialized whole life insurance plan for charitable giving.
Is whole life insurance worth it?
Whole life insurance might be worth the cost for you if:
- You need lifelong life insurance coverage and are comfortable paying higher premiums for it
- You are a high-net-worth individual who has maxed out your RRSP
- You are looking for a life insurance policy that can act as an investment tool
- You want policy that promises guaranteed returns on the cash value
- You have a lifelong dependent, like a child with special needs
- You own a business and want to use life insurance to act as loan collateral or fund a buy-sell agreement
- You have a large, complex estate and can benefit from using life insurance for estate planning
What can whole life insurance cover?
Like other types of life insurance, whole life insurance issues your beneficiaries a lump sum payment on your passing. The amount of death benefit your beneficiaries will receive depends on your insurance policy. Your beneficiaries can use this money for any purpose they want. They can use the death benefit to cover expenses such as:
- End-of-life expenses
- Your mortgage and other debts
- Everyday living expenses
- Home repairs
- Education costs
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Find the best rates
Conclusion
Whole life insurance gives you the benefit of lifelong protection and cash value but with guarantees other cash-value plans doesn’t provide, like guaranteed death benefit, premiums, and cash value growth. While whole life insurance is costlier than other types of life insurance, it can be worth the cost of someone who wants to treat their life insurance as a cash asset or needs a policy without an expiry date. Manulife, Equitable Life, Sun Life, Canada Protection Plan, and RBC are among our top picks for the best whole insurance companies in Canada. All the same, it’s possible that other companies may fit your situation better. This is why we recommend collecting quotes from at least three life insurance companies before making a decision. At Dundas Life, you can compare top-rated life insurers at one spot and get transparent, unbiased advice.
FAQs
What is the most popular whole life insurance company in Canada?
Manulife, Equitable Life, Sun Life, Canada Protection Plan, and RBC are among the most popular choices for whole life insurance in Canada.
How much does whole life insurance cost?
How much you will pay for whole life insurance depends on many factors, such as your age, health, gender, and coverage amount. Whole life insurance premiums stay the same throughout, so it makes sense to buy coverage sooner rather than later. It is the most effective way to lower your costs.
These are sample quotes based on a healthy individual. but your rates may differ.
Can I convert my term life insurance policy to whole life insurance?
Whether you can convert your term life insurance policy to whole life insurance or not depends on the terms of the contract. Many term life insurance plans include a conversion clause, which allows the policyholder to convert their term life insurance coverage to whole life without going through medical underwriting. If your policy includes this option, you can switch to whole life insurance. If not, you will have to first cancel the existing policy and then reapply with the current or a new insurer and probably take a medical exam to prove insurability.
The conversion option offers a convenient — and typically cheaper — way to secure permanent life insurance should your life insurance needs change drastically in the future. Of course, your premiums will increase if you opt to convert, but the insurer will not factor in any health changes since the purchase of the term life policy into the price. Your new premium rate will be based and your health as it was when you bought the original plan. In contrast, other insurers will quote a price based on your current age and current health. If your health is not what it was, the conversion option can be considerably cheaper than buying whole life insurance from another insurer.
Can I customize my whole life insurance policy?
Yes, many whole life insurance policies offer the option to personalize the plan with riders to meet your needs. Life insurance riders provide additional protection against certain risks or offer additional benefits at a certain extra cost. Some of the common riders include critical illness rider, long-term care rider, waiver of premium rider, and accelerated death benefit rider.
Steven is a licensed insurance advisor (LLQP) with a deep background in life insurance. At Dundas Life, he's helped 1000s of clients find the right insurance coverage while also training dozens of insurance advisors during his career. Previously at Finaeo, Steven oversaw compliance and coaching for over 350 independent insurance brokers. Steven is also rated the #1 Insurance Agent in Toronto on Rate-My-Agent.
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