Work through the buying process for life insurance in Canada: how term and permanent pricing works, what sets a premium, how to compare quotes on the same basis, and what to check before signing.
Applies in: CA
This guide explains the process of buying life insurance in Canada. It does not advise whether you need cover, how much cover to buy, or which insurer or product to choose. It does not rank insurers or quote rates. No rate, fee, or average premium appears in this guide, because no regulator or industry page stated one that could be quoted as a current figure. Where a figure does appear, it is a contract feature stated on a regulator page, such as a term length or a renewal interval, and the page is named beside it.
Life insurance in Canada is regulated province by province. The Financial Consumer Agency of Canada (FCAC) publishes consumer information about life insurance, while the conduct of insurers, agents, and brokers follows the laws and rules of each province and territory where they do business, as stated in How to file a complaint with your insurance company. Two provincial regulators are named in this guide: the Financial Services Regulatory Authority of Ontario (FSRA) in Ontario, and the Autorité des marchés financiers (AMF) in Quebec. For any other province or territory, use that province or territory insurance regulator, and do not assume an Ontario or Quebec rule applies there.
Work through the steps in order. The comparison in step 4 only means something if steps 1 to 3 have fixed what is being compared.
All policy types boil down to two basic forms, term and permanent, according to A guide to life insurance from the Canadian Life and Health Insurance Association (CLHIA). The same guide frames the distinction by the length of the need: a temporary need, such as a mortgage or the years when children are young, against a need that lasts for life, such as funeral expenses or a child who remains dependent for a lifetime. That framing describes how the two forms are used. It is not a recommendation for any reader.
Term cover pays a death benefit if you die within a specific period, as stated in Life insurance from FCAC. The length is either a fixed period, such as a term of 10 or 20 years, or until you reach a set age, such as 65 years old, on the same FCAC page. Once the term ends, the cover ends and beneficiaries receive no payment. Term policies carry no cash value, so you cannot borrow against the policy and you get nothing back if you cancel, also on the FCAC page. You might be able to renew certain term policies, and premiums may increase at renewal. Term cover usually provides a right to convert to permanent cover with the same insurer without further underwriting, according to Canadian Life and Health Insurance Facts, 2025 Edition from CLHIA. Check the conversion wording and any age limit in the contract you are offered, because the CLHIA wording is "usually," not a promise for every policy.
Permanent cover gives lifetime coverage, with a death benefit payable if you die while the policy is in effect, according to the FCAC Life insurance page. Permanent policies usually build up a cash value, and cancelling returns a cash value that would be less than what you paid in premiums for the insurance costs. You may be able to take out a policy loan or use the policy as collateral for a loan, but a loan must be repaid, and an unpaid loan may reduce the amount your beneficiary receives and the amount you get back on cancellation, on the same FCAC page.
Within permanent cover, FCAC distinguishes two main types on the same page. Whole life cover provides coverage for your entire life, premiums will not change as you get older, and the policy will often have a guaranteed minimum cash value. Universal life cover combines life insurance with an investment account, carries a cash value, and allows withdrawals and loans. Its death benefit and cash value may increase or decrease depending on the investments chosen and their returns, and you may increase or decrease premiums within the limits in the policy, while premiums could increase if investment returns fall.
Group cover sits apart from individual cover. If you are employed, you probably have group life cover through your employer or union, usually term cover issued to a group under a master contract, with a certificate as evidence of your coverage, according to A guide to life insurance. That cover usually ends if you leave the group, so check whether the plan allows conversion to an individual policy. The AMF makes the same practical point in step 4 of its five-steps page: find out the cost of group cover if it is available through your employer, alongside any individual quotes you request.
For couples, FCAC describes two term shapes on its Life insurance page. Joint first-to-die cover pays when the first partner dies, both partners are insured under the same policy for the same amount, and the surviving partner will need to apply for a new policy to continue cover. Single cover gives each partner a separate policy and a separate amount, and changing a beneficiary after a separation is relatively easy. FCAC notes joint cover is usually less expensive than two identical single policies and less flexible if you separate. Compare the two shapes on the same basis if both are offered to you, and check what happens to each shape on separation or on the death of one partner, in the contract wording.
Insurers do not price a policy from a single figure. They make long-term projections based on statistical and actuarial experience, using mortality tables that show death rates at various ages, and assumptions about future expenses, interest rates, and mortality rates, according to A guide to life insurance. Before an application is approved, the insurer assesses the degree of risk involved, pools similar risks together, and classifies applicants into risk groups. Premiums reflect the value of the risk assessed, and the lower the risk of the group, the lower the premium, on the same CLHIA page.
The AMF lists the main factors that affect premiums in The cost of life insurance. Age comes first: the older you are when you take out cover, the higher the premium, because death in the near term is more likely. Health, employment, tobacco use, alcohol use, use of non-prescribed drugs, and participation in a dangerous sport or activity all appear on the same AMF list, with riskier work and riskier activities tending to raise the premium. The AMF also lists gender, noting that a healthy man will pay more than a healthy woman because men have a shorter life expectancy, and place of residence within Quebec, where cover costs more in areas with shorter life expectancy. The CLHIA guide gives the same classification factors in plainer terms, including age, sex, medical history, and physical condition, and notes that women ordinarily pay lower premiums than men on overwhelming statistical evidence that women live longer, and that lower premiums also apply to non-smokers, in A guide to life insurance.
Two features of the policy itself also move the premium, on the AMF cost page. The insured amount matters directly: the higher the amount, the higher the premium. Duration matters through the renewal pattern: a 10-year term premium starts lower than a whole life premium, then rises at each renewal to reflect the change in age, while a whole life premium usually stays the same for life because the increasing risk of death with age is already reflected in the premium at purchase. Economic conditions sit behind both: if insurers cannot invest premiums at high interest rates, cover will usually cost more, because lower investment income leaves more of the cost to be met from premiums, on the same AMF page.
One tobacco detail on the AMF page is worth knowing before you compare quotes. If you were a smoker when you bought cover and you have gone 12 months or longer without smoking, tell your insurer, because you could get a lower premium. If you were not a smoker and take up smoking after purchase, your premium will not increase on the existing policy, but cancelling to take out a new policy would mean paying the smoker rate. Ask the insurer how it defines non-smoker status and what evidence it asks for, rather than assuming a self-declaration is enough.
A quote is only comparable when every input except the insurer is held still. The AMF five-steps page puts this as a warning: do not just compare premiums, and make sure the products are similar, checking whether the insured amount is fixed and guaranteed, what exclusions apply, and whether premiums are fixed or rise over time, in Five steps before buying life insurance. Build one written basis and send the same basis to every insurer or advisor you approach:
Keep the written quotes and any illustrations together. If one quote arrives on a different basis, ask for it to be re-quoted on your basis before you compare it. Do not adjust the basis mid-comparison to make a quote look better, because the comparison then stops measuring the same thing.
Shop around. Prices vary from one insurer to the next, for premiums and for contract features such as a fixed premium, a premium that increases over time, and administration fees, according to the AMF Five steps before buying life insurance page. No insurer has the best premiums and benefits for every type of cover and every person, on the same page. The AMF also states, in step 3 of that page, that you should find out what premiums will be not only for the first few years but for the entire time you plan to hold the policy. Ask for that full schedule in writing for each quote, and record the renewal figures beside the first-period figure in your comparison, so a low opening premium with a steep renewal is visible at a glance.
If you work through an agent or advisor, check authorization and disclosure first. In Ontario, the agent must hold a licence to sell life insurance in Ontario, must disclose in writing the insurers represented and the products and services authorized to be sold, and must disclose in writing any relationship or interest that could compromise recommendations based on your needs, according to What You Need to Know Before Purchasing Life Insurance from FSRA. In Quebec, step 1 of the AMF five-steps page is to make sure the person or firm offering the cover is authorized, by consulting the Register of firms and individuals authorized to practise, and a financial security advisor offering cover must first analyze your needs by evaluating your current policy features, family obligations, financial situation, and income. For any other province or territory, check the equivalent register or licensing route with that province or territory insurance regulator before you rely on a seller. FSRA also notes that some products are designed for higher-net-wealth individuals who have maximized registered account contributions, and that committing to a product with an investment component while carrying high-interest debt, or without being able to commit to regular premiums for many years, deserves a direct question to the agent about options. Ask those questions in those terms, and keep the answers with the quote.
When the quotes arrive, compare them on the basis from step 3, line by line. Confirm the insured amount and whether it is fixed and guaranteed, the premium in each period, the renewal and conversion terms, the exclusions, the riders and whether each rider you asked for is present, the administration fees, and the cash value and dividend wording with its guarantees stated. If a quote includes a policy illustration, treat it as an estimate: the Ontario consumer page states that illustrations are estimates with no guarantees, that illustrations are not part of the contract, and that not all features shown, such as cash value, dividends, premiums, and death benefits, may be guaranteed, in Tips on your life-health insurance contract. Ask the seller to mark which figures in the illustration are guaranteed and which are projected, and keep the illustration attached to the quote for the check in step 6.
If you already hold cover, compare it against the new quote before you change anything. The AMF step 3 asks you to compare current coverage with your needs, taking account of children you have and children you plan to have, and notes that some types cover permanent needs with premiums that do not change with age while others cover temporary needs with lower premiums that rise over time. In Quebec, if replacement is proposed, the advisor must complete a Prior Notice of Policy Replacement form listing the features of the existing and proposed policies and the advantages and disadvantages of replacing, and must explain the form and the impact of the change, according to the AMF five-steps page. Read that form carefully, allow a few days to think, and confirm the tax implications and any fees tied to the change. Do not cancel the old policy until the new one is in effect, on the same page.
When you buy cover, you complete forms, some of which may include questions about your health, according to step 5 of the AMF Five steps before buying life insurance page. Answer honestly. You must notify the insurer of any fact that may influence it in setting your premium, and if you do not, the insurer may refuse to pay benefits or reduce the amount of cover you thought you held, on the same page. The Ontario consumer page makes the same point from the other side: be frank and open about your life, health, and short- or long-term financial goals, expect personal questions including what you can or cannot afford, and note that information you provide is confidential, in Tips on your life-health insurance contract.
Expect the insurer to assess risk before approving the application, as described in step 2. Ask what evidence the insurer will request for your application, how long the assessment is expected to take, and whether the quoted premium can change after the assessment. If the assessment places you in a different risk group from the one quoted, ask for the revised premium schedule in writing, on the same full-period basis as step 3, before you accept the policy. When paying premiums, the AMF states to make any cheque out to the insurance company, not to the financial security advisor. Keep a copy of the completed application with the policy, since the Ontario consumer page notes that in most cases your application should be attached to the policy.
Do not sign on the strength of a quote or an illustration alone. The Ontario consumer page lists the checks to run on the contract itself in Tips on your life-health insurance contract: double-check the spelling of all names, addresses, and phone numbers, the insurer contact information, the duration of the policy, the beneficiaries, and the premiums; get familiar with the definitions, which should be written in plain language; know the coverage details, riders, and exclusions, with any illustrations discussed attached; and check eligibility requirements and that any riders you requested are represented correctly. If anything is unclear, ask the agent or company before signing, and keep a note of the answer.
Three further checks belong in this step. First, naming a beneficiary: FCAC states you may name a spouse, another family member, a friend, or a charitable organization, you may name more than one beneficiary with different proportions, and a revocable beneficiary can be changed at any time without telling them, while an irrevocable beneficiary must give written permission before changes are made, in Life insurance. In Quebec, a spouse named as beneficiary is presumed irrevocable unless otherwise specified, and you must check the revocable box if you want to change that, on the same FCAC page. Confirm the beneficiary wording on your own contract matches what you intended, and consider naming an alternate beneficiary, as FCAC suggests.
Second, the two-year window: the AMF states that the insurer can cancel the contract or reduce the insured amount during the first two years the contract is in effect if you omitted information or made a false statement, and after two years it can cancel only if it determines the false statement or omission was made with the intention of defrauding the insurer, in The cost of life insurance. That window is a reason to answer the application carefully in step 5, and to correct any error you spot in the attached application promptly, in writing, rather than leaving it for a later claim.
Third, the cancellation window: check the clause in your own contract and the rule in your province or territory. The AMF states a 10-day no-penalty cancellation for online purchases in Quebec without an advisor, as set out in the FAQ above, and no regulator page stated an Ontario day-count, so confirm the window that applies to your own contract before it closes. Confirm the start date of the window, the method of notice the contract requires, and whether premiums paid are refunded, before the window closes. Keep the contract, the application, the illustrations, and the quote together, and re-check beneficiary designations from time to time, as FCAC advises.
If a premium, a claim, or the conduct of an agent or broker is disputed, follow the insurer complaint-handling process first, then the external route. FCAC sets out that order in How to file a complaint with your insurance company: prepare with your policy number, the agent or broker name, the key facts, the resolution you want, and copies of related documents; follow the company process, which may include a customer service representative, a complaint department, or a senior employee; and ask for a letter stating the insurer final decision. If the resolution offered does not satisfy you, contact OLHI for life and health complaints, or the AMF if you are a Quebec resident, for an independent, free, and impartial review. You may also file a complaint with your province or territory insurance regulator at any point in the process, on the same FCAC page. Take notes of conversation dates, employee names, and what was discussed, as FCAC advises.
Premiums vary from one insurer to the next, for both the premium itself and the contract features that sit behind it, according to the [five steps before buying life insurance](https://lautorite.qc.ca/en/general-public/insurance/life-insurance/five-steps-before-buying-insurance) from the Autorité des marchés financiers. The same page warns against comparing premiums alone and lists the checks that make a comparison valid, including whether the insured amount is fixed and guaranteed, what exclusions apply, and whether premiums stay fixed or rise over time. Insurers also classify applicants into risk groups before approving an application, using mortality tables and assumptions about expenses, interest rates, and mortality, as described in [A guide to life insurance](http://clhia.uberflip.com/i/405151-a-guide-to-life-insurance/11) from the Canadian Life and Health Insurance Association. A quote that looks lower on the first year may carry a steeper renewal schedule, so ask for the premium over the entire period you plan to hold the policy.
It depends on the coverage shape you hold. With whole life cover, premiums will not change as you get older, according to [Life insurance](https://www.canada.ca/en/financial-consumer-agency/services/insurance/life.html) from the Financial Consumer Agency of Canada. With term cover, premiums are generally set by the length of the term and may increase when you renew, so a premium on a 5-year renewable policy would increase every 5 years, on the same FCAC page. With universal life cover, the death benefit and the cash value may rise or fall with the investments held in the account, and premiums could increase if returns on the chosen investments fall, also on the FCAC page. The Autorité des marchés financiers adds that a 10-year term premium starts lower than a whole life premium and rises at each renewal to reflect the change in age, and that renewal could cost significantly more, even up to twice as much, depending on age and insurer, in [Life insurance](https://lautorite.qc.ca/en/general-public/insurance/life-insurance/). Ask for the renewal schedule in writing before you sign, rather than relying on the first-year figure.
Before an application is approved, the insurer has to assess the degree of risk involved, and it looks at factors such as age, sex, medical history, and physical condition, according to [A guide to life insurance](http://clhia.uberflip.com/i/405151-a-guide-to-life-insurance/11). The Autorité des marchés financiers describes the same step as assessing insurability, and notes that some insurers may agree to insure a person who is already ill, with premiums that will be much higher, in [Life insurance](https://lautorite.qc.ca/en/general-public/insurance/life-insurance/). This guide does not state what evidence any one insurer will ask for, because that varies by insurer and by application. Ask, before you apply, whether a medical questionnaire, an exam, or a report from your doctor will be requested, and what happens to the quoted premium if the assessment places you in a different risk group. Answer every question honestly: the AMF five-steps page states that you must notify the insurer of any fact that may influence it in setting your premium, and that failing to do so may lead the insurer to refuse benefits or reduce the amount payable.
If you do not pay your premiums, your insurer may cancel your policy, according to [Life insurance](https://www.canada.ca/en/financial-consumer-agency/services/insurance/life.html) from the Financial Consumer Agency of Canada. The same page states that term policies carry no cash value, so you cannot borrow against the policy and you will not get cash value back if you cancel. Permanent policies usually build up a cash value, so cancelling returns a cash value that would be less than what you paid in premiums for the insurance costs, on the same FCAC page. Some permanent policies also carry options that let cash value continue protection if premiums are missed, as shown in the policy-type table in [A guide to life insurance](http://clhia.uberflip.com/i/405151-a-guide-to-life-insurance/9). Do not assume your own contract carries such an option. Check the cancellation and non-payment wording in your own contract, and check before replacing a policy, because the AMF states that your new policy should be in effect before you cancel the old one.
Check the cancellation wording in your own contract and the rule that applies in your province or territory, because this guide does not state one Canada-wide cancellation rule. One regulator source states a 10-day window in the context it covers: the Autorité des marchés financiers states that, if you buy insurance online in Quebec without the help of a financial security advisor, there is no penalty if you cancel it within 10 days, in [Five steps before buying life insurance](https://lautorite.qc.ca/en/general-public/insurance/life-insurance/five-steps-before-buying-insurance). An Ontario consumer page also describes a 10-day change-of-mind window, in [Tips on your life-health insurance contract](https://insurancestoronto.ca/tips-on-your-life-health-insurance-contract/), but no regulator page stated the Ontario window, so this guide states no Ontario day-count. Ask the insurer or advisor to point to the cancellation clause in your own contract, confirm the date the window runs from, and confirm whether a refund of premiums paid applies, before the window closes.
Start with the insurer complaint-handling process, which every insurer has and which you can find on the insurer website, according to [How to file a complaint with your insurance company](https://www.canada.ca/en/financial-consumer-agency/services/insurance/make-complaint.html) from the Financial Consumer Agency of Canada. Have your policy number, the name of the agent or broker, the key facts, the resolution you want, and copies of related documents ready before you start, and ask for a letter stating the insurer final decision. If you are not satisfied with the resolution offered, the same FCAC page directs life and health complaints to the OmbudService for Life and Health Insurance, known as OLHI, for an independent, free, and impartial review. Quebec residents contact the Autorité des marchés financiers instead. You can also file a complaint with your province or territory insurance regulator at any point in the process, on the same page.
No rate, fee, or average premium is stated in this guide, because no regulator or industry page stated one that could be quoted as a current figure. Where a number appears, it is a contract feature from a page named beside it, and the reader is directed to confirm the figure that applies to their own contract and province.