Life insurance can give you peace of mind that if the worst were to happen, your family wouldn’t have to suffer financially. However, many people worry that they won’t be able to afford a policy, so you may wonder what the cost of life insurance in Ontario is.
It’s a difficult question to answer, and we’ll see why here. We’ll look at what you can expect to pay and the factors that affect that cost. Finally, we’ll also answer some FAQs to give you all the info you need. Let’s get started!
Cost of Life Insurance in Ontario
This is a very difficult question to answer as it can vary hugely depending on a variety of factors. For example, a healthy 30-year-old may pay $15 per month, whereas a 70-year-old smoker could pay well over $300.
The biggest factors that determine your life insurance cost are the type of coverage you choose, your health, and your age.
A 40-year-old non-smoker, on average, will pay around $40 to $50 per month. This would increase significantly if it were a permanent term policy with a $1m payout, but conversely, it would be lower with a 10-year term and a $100,000 payout.
The best thing you can do is get a quote. Almost all life insurance companies will give you a non-obligation quote after a few questions. You can then decide if it’s affordable to you, before going further into the process.
Factors That Affect Cost
We’ve mentioned a few factors that affect the cost, but why do they change the price, and what other factors apply? Knowing these factors will allow you to get a better understanding of the quote you are given.
Age – This is perhaps the most significant factor in the cost of your coverage. The cost of life insurance will rise exponentially as you get older, as health issues become more likely. This is why it’s often recommended that young people get life insurance, as they’ll have much more affordable coverage.
Length of Coverage – Another huge factor is the length of coverage. This is usually broken down into two types, permanent or term. Permanent will cover you until you die. Terms will have a set amount of coverage time, such as ten years. As you’ve probably worked out, the longer the coverage, the more expensive the policy.
Coverage Amount – You can also decide what the payout will be for your life insurance. If you opt for a $100,000 payout, you’ll get a much cheaper quote than with a payout of $1m. It’s important to choose the right coverage amount for your family’s needs.
Health – Many insurance companies will ask you to do a medical, but others may not. You will get questioned about your health, and all these factors will get taken into account. For example, a completely healthy individual would get a cheaper policy than someone with diabetes.
Family Health History – You’ll also get questioned about your family history. If you have a high chance of a genetic condition such as Huntington’s disease, then you’ll have a higher premium.
Smoker – Smoking dramatically reduces a person’s lifespan. If you’re a heavy smoker, then you’ll likely pay at least twice as much for your life insurance than a non-smoker. It may be tempting to lie about your smoking habits, but this is never a good idea.
Gender – This is one of the more minor differences in price, but men will need to pay a little more for their life insurance than women. This is simply because the life expectancy of men is lower, and insurance companies take this into account.
Occupation – Those with high-risk jobs will need to pay more. Often if you have a risky job, then your employer will offer life insurance as part of the employment. There are plenty of medium-risk jobs, however, that don’t offer such coverage but will mean you pay a higher life insurance premium.
Hobbies – Do you enjoy jumping off cliffs for fun? Enjoy rock climbing or racing cars? If you have a dangerous hobby, then this needs to be mentioned, and you’ll need to pay a little more.
Life Insurance FAQs
Can I lie on my policy?
You may be thinking, can you just say that you don’t smoke, don’t have a dangerous job, or don’t have a genetic health condition? It’s tempting to save money, but it’s a terrible idea. The reason is that it can invalidate your insurance. For example, if you die from diabetes complications but don’t disclose it, all those payments could be for nothing.
Do I need to get a medical to get life insurance?
Every company has its own policy on whether or not you’ll need a medical. Often this is age-related as younger people are less likely to be asked for a medical than older people. Sometimes it can be a good idea to request one to prove your good health.
Should I get term or permanent life insurance?
There are good arguments for both. Term policies will be cheaper, and you can always update them once the term passes. Permanent policies give you peace of mind that you’ll always be protected but will be significantly more expensive.
At what age should you get life insurance?
Life insurance is a good idea at any age, but especially once you get responsibilities such as a child or a mortgage. Even without these responsibilities, it can be a good idea if you have a partner and you are the sole/majority earner. Remember, the younger you are, the cheaper life insurance will be, so it can make sense even if you’re in your 20s or 30s.
How much life insurance should you get?
The payout amount of life insurance you choose should ideally cover all of your liabilities and anything else you want to pay for in the future. For example, you may want to cover your mortgage along with future college education costs for your children.
How can you lower your costs?
Having short-term and lower coverage is a simple way of lowering your life insurance costs, but these come with their related disadvantages. The best thing you can do is adopt healthier lifestyle habits, with stopping smoking being the obvious example.
