It would make shopping for life insurance a lot easier if the answer to what would life insurance cost me were simple. The reason it’s not is because, there are so many variables to life insurance. Also, it is an individualized product. Meaning that everyone is different and has different life insurance needs. There are ways though where one can get a reasonable idea of how much life insurance is going to cost them.

Average Cost of Life Insurance in Canada

gender

The average cost of life insurance is first going to depend on  several different factors such as;

  • Your gender
  • Age
  • Your health
  • Where you live
  • Who you buy your insurance from
  • What type of life insurance you buy

Here are some rough examples of the minimum starting price of premiums:

Term Life                             Whole Life                          Universal Life

Lowest Cost                         $18.                                        $19.                                        $22.

Average Cost                       $60.                                        $64.                                        $81.

High Cost                            $138.                                     $147.                                     $199.

Then when searching the web, you may see examples of term life offerings for a 35-year old costing $26. month. For $500,000. worth of coverage. Life insurance is such an individualized product there is no set answer as to how much an individual is going to pay for their life insurance in Canada.

Health Factors and Premium Costs

Health plays an important factor in life insurance. For example, a male in his early 50’s and a non-smoker applied for $1. Million 15 year term life insurance. Based on one quote it was around $200. a month. However, based on a minor health condition being controlled by his Doctor it caused his premium quote to go up to approx. $400. a month. Almost double. In a case like this, it would be worth shopping around and getting several quotes to make a comparison.

Another example is for $1.million term life it can be about $32. For a male who is in perfect health at the age of 25. Also, is a nonsmoker. Then for a male who smokes and is 40 years old, the cost can be around $150. each month. The metrics here are the difference in age, and one is a smoker and the other is not.

Life Insurance Rates By Age

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It stands to reason that life insurance companies are going to factor in age when it comes to their life insurance policies. These companies make their money off the premiums. The longer they can collect premiums the more money they make. The older an individual gets, the more risk they are at for illnesses. This puts the insurance companies at greater risk. How important the age factor is will also depend on the type of life insurance being bought.

Term Life Insurance

One of the common types of insurance that younger insurance shoppers tend to go for is the term life insurance. They do so because it provides them with the type of financial protection they feel they need at a certain stage of their life. Age and gender are just two of the metrics that will create a variation in the cost of this type of insurance. It is common to see the rates increase in five-year increments based on age.

Here are some general examples based on age: For a 20-year term life insurance policy. Assuming the insured’s are not smokers;

Gender                                Age                        Monthly Cost                     Yearly Cost

M                                         25                           $11.61                                   $129.

F                                          25                           $9.81                                     $109.

M                                        30                          $11.64                                   $129.35

F                                         30                           $10.26                                   $114.

M                                        35                           $13.60                                   $151.16

F                                         35                           $11.34                                   $126.

M                                        40                           $16.74                                   $186.

F                                        40                           $12.72                                   $141.29

What is noted here is that there is a difference in age as well as gender. Females tend to pay less for this type of life insurance compared to the males. It also shows that it makes more sense to buy term life insurance when one is at the age of 25. As opposed to age 30 as there is the increase in cost.

With this example only being for a $100,000 term value, the higher the value, the more the premiums are going to be.

Life Insurance Calculator Monthy Payment

There are usually resources that can be found online to assist one in getting estimates for their life insurance costs. One of these is a calculator. It requires the insurance shopper to enter some important information.

These are often made available by various insurance providers, brokers and quote services. They will vary in the information asked for in the calculator. Most will ask for your name and contact information. So they can follow up with you.

How much Life Insurance Do I Need?

money

Most often anything that has to do with money comes with some type of formula. Financial advisors will use formulas to help individuals determine how much life insurance they need. But this just provides the basics. Every individual is different. There are so many factors that have to be considered when buying life insurance that will help to determine how much is needed. It all begins by asking a series of questions that vary. Some of the questions are;

  • What are my current liabilities?
  • Also, what do I estimate my liabilities will be ten, fifteen or twenty years from now?
  • What kind of savings do I currently have, and what do I estimate having ten, fifteen or twenty years from now?

These questions deal with what you have and what you owe. Currently and during different stages in the future.

When it comes to using a formula for life insurance needs you are going to want to determine the difference between these two. These are your assets and liabilities. This will give you a good idea of how much insurance you should feel comfortable with.

Forecasting finances for the future is not an easy task. Many things can dramatically change to alter one’s finances. An individual could become ill which affects their ability to earn income. The cost of living rises. Even trying to factor in educational costs for the children can be difficult.

It is better to have more life insurance than not enough. At the same time, one does not want to become insurance poor either. Meaning that they have to struggle financially to pay their premiums. It also is ideal to shop for insurance properly. Which means getting some quotes so comparisons can be done. Not settling on the first or only one quote.

Resources:

http://www.insurancedirectcanada.ca/canada-term-life-insurance-quote-explained/
http://www.advisor.ca/insurance/life/when-should-young-people-buy-life-insurance-239266
https://www.nerdwallet.com/blog/insurance/how-much-life-insurance-do-i-need/
https://www.sunlife.ca/ca/Learn+and+Plan/Tools+and+Calculators/Life+insurance+calculator