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How Much is Term Life Insurance in Ontario?

Ontario is home to the largest number of insurance company headquarters of any province or territory in the country. Whether you’re shopping around for your first term life insurance policy, looking for additional coverage, or planning to switch providers, there are plenty of good reasons to buy your policy from a licensed agent located in the province and up to speed on local regulations.

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How life insurance policies work in Ontario

There are lots of ways to buy life insurance in Canada. You can purchase it online, or sign up for a group plan where you work. But if you prefer to work with a licensed agent, you need to select one with the right credentials and the authority to sell insurance in your province or territory.

In Ontario, life insurance providers are licensed by the Financial Services Regulatory Authority (FSRA). The FSRA ensures that safeguards are in place to protect the rights of policyholders. This should give you the confidence to work with a professional advisor who will identify a policy to match your needs.

Life insurance options

A life insurance policy is a contract between you (the policyholder) and an insurance provider (the insurer) that guarantees your beneficiaries (i.e., your loved ones or groups who will receive the money) a lump sum payment upon your death. Policies fall into two categories in Canada: permanent life insurance and term life insurance.

Option 1. Permanent life insurance

Whole life insurance is one type of permanent coverage that stays in effect for life and is guaranteed to pay out a lump sum of money to your beneficiaries. Because both coverage and payments are guaranteed for life (regardless of any changes to your health or diagnoses), the up-front cost is high.

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Option 2. Term life insurance

Term life insurance is a temporary option that expires at the end of each term, unless you decide to renew or convert to a longer term or to permanent coverage. You choose the length of time that you want to be covered, based on your life stage and income. For example, from age 30 to 60, you’d likely have the greatest financial responsibilities. Replacing your income, by leaving your loved ones a lump sum of money, will help them carry on in the event of your death.

For a more in-depth comparison of whole life and term life insurance, visit this article to find out if term life vs whole life is right for you.

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Enhanced protection with living benefits

Your licensed Ontario insurance advisor can help you choose between whole life and term life insurance, based on your income, goals, and financial situation. During your discussion, you’ll likely be offered the opportunity to buy insurance that doesn’t depend on your death to pay out. Instead, it steps in to replace your income should you become disabled or suffer a critical illness.

This kind of insurance protects you from having to use your money, investments, or other assets to replace your income while you recover. It’s referred to as “living benefits” coverage because it provides relief and peace of mind while you’re alive.

Critical illness insurance

Recovering from a critical illness can take time and money. You may have to stop working for a while and you could get hit with out-of-pocket expenses. Critical illness insurance provides you with a one-time payout that you can use for living expenses, treatments, or services. Here are just a few of the things it can be used to cover:

  • Treatment at a private clinic
  • An extended vacation to ease recovery
  • Prosthetics and wigs
  • In-home care
  • Cleaning and lawn-care services
  • Modifications to your home to improve accessibility

Disability insurance

Disability insurance can provide you with a source of income that lasts until you are able to return to work or reach the age of retirement. For example, disability insurance might pay you 65 per cent of your current salary from the time your claim is approved until you either go back to work or retire. This steady cash flow can help you pay your mortgage, and keep up with expenses, without having to liquidate assets.

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How much does life insurance cost in Ontario?

The cost of life insurance and living benefits such as critical illness and disability insurance is based partly on how your provider determines your level of risk and partly on what you’re trying to achieve financially.

You can’t do much about risk because it’s a formula based on factors such as your age, gender, your health, your lifestyle choices, and sometimes, your occupation. But you can give some thought to what you’re trying to achieve when buying coverage in the first place. This is where the guidance of an insurance advisor licensed in Ontario can be invaluable.

For example, if your goal is to replace your income for the balance of your working life, term life insurance, with some living benefits, may fit the bill. If you’re looking for ways to reduce taxes and transfer wealth to your children, a more comprehensive plan built on a foundation of whole life insurance may be the better investment. Here’s a quick comparison and an example of how premiums may increase due to age and certain lifestyle choices.

Term life insurance

Term life insurance expires at the end of your 10, 20, or 30-year term. It can be renewed, but the cost will increase with age. Coverage typically ends when you retire or feel that you have sufficient wealth to ensure your loved ones are cared for. Learn more about buying term life insurance.

Female
Age 30
Female
Age 40
Female
Age 30
Female
Age 40
Non-smoker
Smoker
Coverage Amount
$250,000
$250,000
$250,000
$250,000
Monthly Payment - Term 10
$10.80
$14.40
$17.78
$32.18
Monthly Payment - Term 20
$13.95
$20.70
$27.23
$55.58

Whole life insurance

Whole life and other forms of permanent life insurance can be paid for a set number of years, or for life. If you opt for the former, you will own the policy after you’ve completed making your payments. That means your payments stop after 20 years, for example, but two important things keep going:

  • Your insurance coverage stays in effect for life, unless you cancel it.
  • Your investment account, called the “cash portion,” continues to grow.

Did you know whole life insurance offers a lifetime of tax-effective rewards?

Female
Age 30
Female
Age 40
Female
Age 30
Female
Age 40
Non-smoker
Smoker
Coverage Amount 2
$250,000
$250,000
$250,000
$250,000
Monthly Payment for life.
$267.75
$396.00
$387.00
$549
Guaranteed death benefit at age 65
$250,000
$250,000
$250,000
$250,000
Potential value of the policy at age 65 with current dividend scale 3
$575,496
$460,202
$699,470
$518,273

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When is the best time to buy life insurance

The cost of life insurance coverage goes up as you get older, while potential changes to your health make it more difficult and more expensive to obtain coverage. In extreme circumstances, such as a serious medical diagnosis, a hazardous occupation, or dangerous lifestyle choices, you could even be denied life insurance coverage if you don’t have an existing policy in place. Another reason to secure coverage while you’re young and healthy!

For most first-time buyers of term life insurance, the process is quick and easy, with no need for a medical exam. You can get started online by answering a few simple questions:

  • What is your date of birth?
  • Are you a smoker?
  • Do you want coverage for 10, 20 or 30 years?
  • Would you like additional coverage, such as disability insurance?
  • Are you comfortable paying monthly, quarterly or annually?

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Once you receive your quote by email, we’ll set up a quick, 15-minute call to get a little more information and give you a chance to ask questions. If you’d prefer to speak with a Serenia Life advisor, you can book a no-obligation chat with one of our friendly representatives. This confidential call should take about 15-30 minutes, depending on your medical history. In addition to the basics above, you’ll want to gather information about:

  • Your short- and long-term financial goals
  • Your life insurance needs (for yourself and/or your family)
  • Your age and smoking status

This is also your opportunity to ask your own questions about term life insurance and how it fits into your financial plan. If, after speaking with your advisor, you decide you’d like to move forward with an application for term life insurance, be prepared to answer some more specific questions about your health. This helps the advisor determine if you are eligible for term life coverage. You will be asked to share details, like:

  • Any medications you are currently taking
  • Any medical conditions
  • Any pending medical tests
  • Any hospitalizations or surgeries you have had
  • Your current height and weight
  • Your family’s health history (including the onset of any conditions for your parents and siblings)
  • The name and address of your family physician
  • (If you are applying for any Child Benefit), the child’s accurate height and weight

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A quick guide to life insurance rules in Ontario

Can I name anyone as my beneficiary?

Pretty much. You can name your spouse, children, another family member, a friend, or even a charitable organization, or you can designate a trust in your will. You can also name multiple beneficiaries.

Are there any restrictions? Or do my beneficiaries need to live in Canada?

You can name anyone as your beneficiary, even if they reside outside of Canada. However, you need to explore the tax consequences in their jurisdiction. Your licensed Ontario advisor will have access to this information.

Can I change the beneficiary on my life insurance policy?

You can typically change the beneficiary of your life insurance at any time, unless you list them as “irrevocable beneficiaries.” (More info below.)

Are there circumstances where I cannot change the beneficiary on my life insurance policy?

Yes. An “irrevocable beneficiary” is a person who cannot be taken off your life insurance policy without their consent. This might happen when one person wants to secure a loan by ensuring that a life insurance payout will cover the outstanding balance or when one spouse wants to ensure that children receive a fair inheritance.

What if someone doesn’t want to name a beneficiary?

When you die without naming a beneficiary, the insurance provider gives the money to your estate (i.e., the value of all the assets you leave behind when you die) and it’s up to the government to decide whether or not it will get taxed. On the other hand, if you name a beneficiary, they get the money right away, tax-free.

Why should you choose Serenia Life for term life insurance?

As a member-based organization that’s been around for nearly 100 years, we encourage kindness by sharing our profits through community outreach, fundraising, and unique member benefits that help Canadians support their family, their community, and the causes they care about. The more we grow, the more we can give.

We provide members with access to a growing collection of member benefits that make a positive impact on their lives and the lives of others.

Benefits, such as:

  • $1,000 post-secondary scholarships
  • $250 seed funding towards fundraising events
  • Free digital wills (value: $189), or money towards drafting/updating a will through a lawyer
  • and much more!
  • View a full list of our member benefits.

Together we continue to make a difference.

Let us help

Choosing the right life insurance for you is easier when you work with a Serenia Life advisor. We’re here to answer your questions, personalize your coverage, and stay with you over the years to make any adjustments for all of life’s big events.

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Frequently Asked Questions

Should you get life insurance if you’re single or young?

Before purchasing life insurance at any stage of your life, it’s a good idea to meet with an advisor to review your current financial situation, as well as both your short- and long-term goals and your budget. Keep in mind that it is always more affordable to purchase life insurance when you are young and healthy, and it’s a great way to guarantee insurability as you age. New diagnoses or risky occupations result in higher payments, and in some cases, could make you uninsurable.

Should you consider life insurance for your child?

Life insurance for a child is a great way to complement existing investments, like an RESP. A participating whole life insurance policy has a cash value portion whose value will grow over time. When your child is older, they can access this money to help fund post-secondary education, a wedding, or even a downpayment on a home. A 20-pay whole life policy allows you to make affordable payments for 20 years, at which point they stop. Yet your child will remain insured for life.

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Are there life insurance options for seniors?

There are options, but you may or may not be declined or “rated” based on your current health status. In the event you are rated, your payments may go up significantly. Keep in mind, most insurance providers in Canada stop offering life insurance to seniors after a certain age (in the 80-85 range). Serenia Life product options include: Term to 100 (up to age 80), Whole Life (up to age 80), and Term 10 (up to age 75), Term 20 (up to age 65), and Term 30 (up to age 55) – but unlike purchasing life insurance when you are young, payments will be very expensive, even if you are in good health.

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Can I get life insurance if I’m a new Canadian?

Yes, but you must be a legal resident of Canada to purchase life insurance from Canadian providers. Temporary residents, such as international students or temporary foreign workers, who are legally residing in Canada on a student or work visa are generally eligible to apply for life insurance coverage, as long as they’re applying 3-6 months after landing on Canadian soil. Convention refugees (i.e., refugees that have been accepted by the Immigration and Refugee Board of Canada) are also eligible. Note that insurers will also take into account whether or not you intend to stay in Canada permanently (e.g., are you applying for permanent residency?) when considering your eligibility. They will also look at your age and health status, and your financial situation.

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Can I get life insurance if I just moved from another Canadian province to Ontario?

Yes, as long as the insurance provider is licensed to operate in Ontario.

How long does it take for life insurance to pay out in Ontario?

The timing can depend on a number of things, including whether the claimant has submitted all completed documents that are required during the claims process in order for the Claims department to assess the claim in a timely manner.


Disclaimers

1 The Canadian Life & Health Insurance Association’s 64 member companies account for 99 per cent of Canada’s life and health insurance business. Forty-two companies have a head office in Ontario. Canada Life & Health Insurance Facts. 2023 Edition. Page 7. Source.

2 Values as at February 2024, premiums paid monthly, buy paid-up additions dividend option, Illustration of non-guaranteed values using the current dividend scale.

3 Dividends are not guaranteed and are paid based on the overall experience of Serenia Life Financial, considering all risk factors. Dividends may be subject to taxation. Dividends will vary based on the actual investment returns in the participating account as well as mortality, expenses, taxes, lapses, withdrawals, and other experience of the participating block of policies. These factors have the potential to increase the value of your policy above the guaranteed amount, depending on the dividend option selected.

4 Online quotes only apply to residents of Ontario, Manitoba, Saskatchewan, Alberta, and BC.