For more on how to choose between life insurance options, read our in-depth guide, “Term vs. whole life insurance: Which type of policy is best?”
How much life insurance do you need?
The answer to this question depends on the various expenses you’d like covered after you’re gone, such as funeral costs, day-to-day living costs for family members, and debts that will need to be paid off, like a mortgage. An insurance broker can help you with a life-needs analysis, but you can also get a pretty good estimate using an online calculator.
On the other hand, you may not actually need life insurance. If you’re single and have no dependents, and you have enough money to pay your remaining debts and funeral expenses, it may not be worth it. Alternatively, if you do have dependents but have enough assets to support them after your death, you may want to opt out of life insurance altogether.
What factors into choosing or building your policy? Current savings, debt, children, funeral plans—all of these contribute to which policy you require. Then there are additional coverage options with riders, such as critical illness, disability, child death benefit and more.
The younger you are when you obtain whole life insurance, the less expensive the premiums will be. As an example, Roy says if you’re a single 25-year-old renter with no children, you may not need coverage. But if you get married, buy a home and have children, the need for life insurance increases. He adds that although whole life insurance is an option, term life insurance might be a better option as you pay off your mortgage and the amount you owe decreases.
Your age and your overall health when you sign up for an insurance policy will determine your eligibility and your rates. “The younger you are usually [means] the healthier you are, so the cheaper the premium will be,” says Roy. For example, if you were to purchase a whole life insurance policy at age five, your rates would remain the same even when you’re 80. But if you purchase it at age 80, you’d be paying upwards of $1,500 a month for the same policy.
How much does a whole life insurance policy cost in Canada?
Life insurance coverage in Canada really depends on a variety of factors, including your specific needs in a policy and your stage of life. While it’s too complicated to know how much you’d pay as an individual without a detailed quote, it’s possible to calculate a hypothetical estimate. For men, a $250,000 benefit amount can be obtained in your mid-30s for approximately $161 per month. For women of the same age, the same benefit is approximately $139 per month. However, if you start a whole life policy in your 80s, the price can be upward of $1,500 a month. Rates for transgender and non-binary individuals are typically based on the sex identified at birth.
| Benefit amount | Sex | Age | Monthly premium |
|---|---|---|---|
| $250,000 | Male | Mid-30s | $161 |
| $250,000 | Male | Mid-40s | $266 |
| $250,000 | Female | Mid-30s | $139 |
| $250,000 | Female | Mid-40s | $221 |
Can you cash in your whole life insurance policy?
You may have heard people talk about “cashing out” their policies and wondered, “Can I cash out my whole life insurance policy”? The short answer is yes.
