Who Has The Lowest Rates for Life Insurance in Canada in 2020?
Life insurance pricing is very competitive in Canada- especially in recent years. We have seen life insurance providers continuously make changes to their rates (especially term life insurance) to undercut competitors in a bid to gain more market share. This is definitely a win for the Canadian consumer because high quality life insurance companies are reducing their pricing to make life insurance more affordable.
What is Your Need for Life Insurance?
Sometimes your need (the reason you are buying life insurance) determines if you should purchase the lowest priced life insurance policy. If you are looking just strictly for life insurance with no bells or whistles, have no interest in any additional benefits then you may want to opt for the lowest priced life insurance policy.
If you are wanting to have additional options later in life such as the ability to convert your term life insurance policy to a permanent life insurance policy or lower pricing for term life insurance renewals then we recommend reaching out to us to discuss your options in more detail.
What Company Has The Lowest Term Life Insurance Rates in Canada?
There are different factors which determine which company has the lowest rates. Some of these factors are the length of the term (e.g. 10 years, 20 years, 30 years, etc.), the amount of coverage (e.g $500,000, $1,000,000, etc.), smoking status of the insured (e.g. smoker or non smoker), age of the insured and more.
Here are some examples of a few different scenarios based on rates calculated on September 24 2019…
Male, Age 35, $500,000 Coverage, 20 Year Term Life Insurance, Non Smoker
– $32.85 per month, Wawanesa Life Insurance Company
– $33.30 per month, Bank of Montreal
– $33.74 per month, Western Life Assurance Company
– $33.75 per month, La Capitale
– $34.07 per month, RBC Life Insurance Company
As you can see, pricing is very competitive which is why we recommend that you reach out to us to see which company would be your best option.
Female, Age 55, $250,000 Coverage, 10 Year Term Life Insurance, Smoker
– $103.73 per month, UL Mutual
– $104.40 per month, Canada Life Insurance
– $104.63 per month, SSQ Insurance
– $105.08 per month, Empire Life Insurance
– $105.25 per month, Equitable Life Insurance Company
Again, pricing is very competitive but in this scenario we have a complete different set of companies than before. Different companies specialize in different age groups, smoking status, coverage amounts, etc.
Is The Lowest Price Always The Best?
This really depends on what you are looking for as a consumer. For some of our clients the lowest priced policy could potentially be the best solution for them while for others it is not. Depending on your situation, it may be worth spending an extra $5-$10 per month to purchase a policy from an A+ rated life insurance company.
Typically (but not in every case), the life insurance companies with the lowest rates do not offer many options for “converting” your life insurance policy to a permanent life insurance policy. The renewal rates for term life insurance from lower priced policies are also usually higher than other companies rates. See below for more information.
Conversion (Convertible Option)
Most life insurance companies who offer term life insurance offer a feature within the policy called “conversion” or “convertibility”. This feature allows the policy owner to switch their life insurance policy from a “term life insurance” policy to a “permanent life insurance” policy regardless of the insured persons health. They do not require any medical questions to be answered or a medical exam to be completed.
Life insurance companies with the lowest life insurance rates may not offer this feature OR they have very limited or non-competitive) permanent life insurance policies to convert to. We highly recommend that you reach out to us if this is something you are considering so we can explain in more detail.
Renewal Rates (Renewable Option)
With term life insurance, at the end of the term most life insurance companies in Canada offer the policy owner to continue their term life insurance policy at an increased cost regardless of the insured persons health. They do not require any medical questions to be answered or a medical exam to be completed.
This can be very beneficial if you have developed a serious illness while you have your term life insurance policy and cannot get approved for a new policy. This “renewal option” would allow you to continue your policy regardless of your health- you just have to pay the increase in price.
If you opt for a life insurance company with one of the lowest life insurance rates, you may find that their renewal rates are higher than a competitors who has a slightly higher initial cost, but lower renewal rates. Again, we highly advise you to speak with a broker if this of concern to you so we can compare companies quality, pricing, etc. in more detail.