What’s the Best Term Life Insurance in Canada?

What is the best term life insurance company in Canada?

Choosing the right term life insurance policy can feel overwhelming, especially with so many options available in Canada. Do you choose your current  bank? Or do you go with a dedicated insurance provider? Questions, questions, questions.

The truth is, it’s hard to define what’s “best” because life insurance depends on your needs and goals. Do you want the feeling of security attached to a traditional bank? Or do you prefer the seamless, convenient signup offered by a newer provider?

After comparing 20 of the best life insurance companies in Canada, we can confidently recommend 3 winners for term life insurance: PolicyMe, RBC, and Sun Life. Their rates, application process, approval times, and customer reviews are among the best in the nation.

"Term life insurance is a simple and affordable way to protect your family’s financial future. The key is finding a policy that balances affordability with the right coverage amount." – Christelle Arouko, Licensed Insurance Advisor

Best term life insurance companies in Canada

The best term life insurance providers in Canada are PolicyMe, RBC and Sun Life.

To create this list, we looked at each company’s rates, approval times, application process, customer reviews and quality of customer service vis-a-vis their term life insurance products.

Each company has advantages and weaknesses, so consider them carefully against your life insurance needs. 

1. Best term life insurance in Canada: PolicyMe

Score: ★★★★★ (4.4/5)

PolicyMe is an online insurance solution based in Toronto, Ontario, specializing in fully-underwritten term life insurance. Using technology, we’ve eliminated traditional insurance headaches such as lengthy applications and long approval times.

With PolicyMe, you pay only for the coverage you need, without the added cost of bricks-and-mortar stores, broker commissions, and underperforming savings funds. Chat with our team of insurance experts to see how we put your needs first with straightforward advice and upfront pricing.

[fs-toc-h2]PolicyMe term life Insurance

PolicyMe insurance pros & cons

Pros:

• $100,000 – $5,000,000 in coverage available for 10 – 30-year terms
• $10,000 of complimentary coverage per child
• 10% off for couples during their first year.
• Apply in 20 minutes or less and get an instant decision.
• Full underwriting process provides superior competitive rates.
• Option to bundle critical illness insurance to term life insurance policies.
• Renewable and convertible term policies.

Cons:

• No brick-and-mortar locations.
• No additional riders available, except for free child coverage.

Customer review

“The process was quick, support was top notch and the price was competitive.” – Verified customer on Reviews.io.

2. Runner-up: RBC Insurance

Our score: ★★★☆☆ (3.3/5)

By assets, RBC Insurance is the largest bank in Canada and a sure bet for continued financial stability. It offers two term life insurance plans and a variety of optional riders, but online reviews suggest its customer service department is slow to respond.

RBC Insurance pros & cons

Pros:

• $50,000 – $25 million of coverage available for 2 types of plans with 10 – 40-year terms
• 5 optional riders available to customize coverage
• Convert your term life insurance to permanent life insurance with no medical exam until the age of 71.
• Simplified issue life insurance policies available with no medical exams required (though at a much higher cost).

Cons:

• Above-average rates for life insurance for smokers.
• Customers complain of long waiting times surrounding applications, claims, and cancellations.
• Premiums include the cost of bricks-and-mortar stores and services.

3. Second runner-up: Sun Life

Our score: ★★★★☆ (3.7/5)

Sun Life offers the largest range of term life insurance and rider options on this list, including life insurance for diabetics and the choice of increasing coverage as you need it. Unfortunately, you pay for the added customizability with above-average premiums.

Sun Life Insurance pros & cons

Pros:

• $50,000 – $25 million of coverage available for 4 types of plans with 5 – 40-year terms.
• 6 optional riders to customize coverage.
• Convert your term life insurance to permanent life insurance until the age of 75.
• Simplified issue and term life insurance for diabetics available.

Cons:

• Above-average rates for all applicants.
• Approval may take up to 5 business days.
• Premiums include the cost of bricks-and-mortar stores and services.

Methodology: Best life insurance in Canada 

To find the best life insurance companies in Canada, we evaluated over 20 of the largest and most well-known insurers in the country using three categories:

• Affordability: To determine which insurers charge the lowest premiums, we gathered over 2,000 life insurance quotes. Our price data spans smokers, non-smokers, and birth sex, across six age groups from 18-70 and five products (including term and permanent life insurance).
• Customer service: To find out which life insurance companies offer the best customer experience, we averaged review scores from the Better Business Bureau, Trustpilot, Insureye and Google. We also counted the number of contact methods each insurer offers to its customers.
• Industry reputation: To ensure our recommendations were financially sound, we reviewed each life insurance company’s financial stability ratings from leading credit agencies A.M. Best, Morningstar DBRS and S&P Global. We incorporated Glassdoor reviews to reflect each insurer’s ability to manage and support its employees.

All three categories got a final, averaged score out of 5. We combined these three categories into a final overall quality score on a 10-point scale. 

PolicyMe does not receive compensation for any life insurance reviews.

How to choose the best term life insurance policy

Your family is as unique as your financial goals. So don’t compromise on life insurance by going with a limited option that doesn’t feel quite right. Life insurance coverage is fundamentally about getting peace of mind for you and your family.

To get the best term life insurance coverage for you, take your time, shop around, speak to advisors, get quotes.

1. Coverage amount

Did you know the average life insurance coverage amount in Canada in 2023 was $483,000? But how do people like yourself choose the amount of coverage they need? The good news is it’s not a mysterious random number. Coverage should be based on the kind of payout your family would need to maintain their lifestyle and achieve all the financial goals you’ve planned if you were to pass.

Calculating this is easier than you might think: 

• Use your annual income as a baseline. If your family depends on your income, then they will still need this amount every year to maintain their lifestyle and the goals you’ve planned for
• Think about how many years away your financial goals are from being achieved. How many years are left on your mortgage? How long until the kids leave home? Your coverage should make sure that your family can still achieve these goals.
• Now combine your annual income with how many years away your financial goals are from being achieved. This is the life insurance amount you need during the years your family is financially dependent on you and while you have a lot of financial obligations (like a mortgage).
• Finally, consider any other debts that may impact your family if you were to pass before the debts are paid off.

2. Term length

You may be thinking: don’t I always need life insurance? It’s a good question. But consider this: your financial stability usually increases as you get older.

This is because you pay off your financial obligations over time, such as your debts and mortgage. After you’ve done that, you can focus more and more on building your wealth through savings instead of paying monthly premiums for permanent life insurance. 

Think about how short term or long term your financial goals are (in number of years):

• Short-term (10-15 years) may be best if you: 
  
  • Are part way through paying your mortgage 
  • Have kids that are aged between 10 - 15, so you’ll be covered until they’re financially independent
  • Have smaller amounts of debt that you plan to have paid in a shorter timeframe
• Medium-term (20-30 years) may be best if you:
  
  • Have just started a family (have kids aged 5 or below) 
  • Recently purchased a mortgage. Mortgages are usually 30-year terms, which is why buying a home is usually when people start looking for life insurance
• Long-term (30+ years). Purchasing term life insurance coverage for longer than 30 years might not be the right fit.
  
  • You’ll likely have fewer financial obligations as you age, so you’re paying premiums when your beneficiaries might not need the coverage
  • It may be a better option to renew your current policy than opt for a longer one 
  • Check that your provider offers term renewals 

3. Premium costs

Every term life insurance policy comes with monthly premium payments. So think about what you’re able and willing to budget every month to pay those premiums. If you stop paying premiums, your policy may be cancelled. So make sure it’s an amount you can comfortably afford. 

Here are some key considerations for considering your life insurance premium costs:

• Know that term life insurance is 5-15x cheaper than whole life insurance, making it suitable for most Canadian families.
• Plan around your existing budget. If you’re already paying for diapers and daycare, you don’t want premiums that are so high they’ll swamp your budget.
• The younger you are, the more affordable your term life insurance rates will be. Like most financial steps forward, the younger you start, the better off you’ll be.

"Most people only need term life insurance, not permanent coverage. It’s cost-effective and provides essential financial protection during key earning years." – Christelle Arouko, Licensed Insurance Advisor

What is the advantage of getting term life insurance?

The big advantage of term life insurance is that it’s simple and budget-friendly. You get coverage options for a set period of time—say 10, 20, or 30 years—at a lower cost compared to other types of life insurance.

It’s perfect for when you need solid protection, like while raising a family or paying off a mortgage. Since there’s no investment side to it, every dollar you pay goes straight to keeping your loved ones financially secure if something happens to you.

Is term life the best option for Canadians?

Term is a great option for many Canadians, offering affordable life insurance coverage for a specific period, like 10, 20, or 30 years.

This makes it ideal for covering needs like paying off a mortgage, supporting children until they are independent, providing income replacement, or covering final expenses. For the majority of Canadians, term life insurance is an effective way to get financial security for their loved ones without straining their budget.

However, the best option can vary depending on your personal needs and long-term goals. While term life insurance suits those seeking temporary protection for a set period of time, it doesn’t build cash value and can become costly if renewed later in life.

If you have more complex needs, such as long-term financial planning or providing for dependents with lifelong needs, a permanent life insurance policy might be more appropriate. But do take note that you’re likely to pay much higher premiums for permanent coverage.

How to find cheap term life insurance quotes

When considering term life insurance rates, it’s best to apply for a fully-underwritten policy first, even if you think you might not be approved. The underwriting process helps insurance companies accurately assess your risk, and you may be pleasantly surprised by the quotes you receive. The effort it takes to get a medical exam can pay off with big savings.

You can always turn to simplified, no medical, or guaranteed issue life insurance after you’ve explored a fully-underwritten option. Just don’t be surprised if you’re quoted with much higher premiums.

“To keep premiums low and still get meaningful protection, buy the amount of coverage your family would truly need for things like the mortgage, education, and living costs. Apply early while you’re young and healthy, since that’s when rates are lowest and you can lock them in for your full term.” – Jeremy Burbano, Life Insurance Advisor

Next steps: Best term life insurance in Canada

1. Decide how much coverage you need to replace your income and for how long. Use our life insurance calculator if you're not sure. Our calculator will even tell you if you don't need term life insurance at all!

2. Decide if you value optional riders (critical illness, accidental death, etc.) or conversion options to a permanent policy.

3. Shop around for the best rate. Then check whether these policies have the term lengths, coverage amounts (death benefit) and optional features you want.

4. Apply and get a decision. If you're denied, you may want to look at no medical options.

5. Read your policy closely before signing.

6. Sign your policy and add your payment information.

Want to learn more about other life insurance options? Here are more reviews of Canadian life insurance companies:

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