Life Insurance 101
Who needs it, how much, and which type is right for you.
❤️ Life insurance isn't about you — it's about the people who depend on you.
If someone relies on your income, you need life insurance. It's that simple.
Do You Need Life Insurance?
- ✅You have a spouse or partner who depends on your income
- ✅You have children
- ✅You have a mortgage or significant debts
- ✅Someone co-signed a loan with you
- ❌You're single with no dependents — you probably don't need it yet
Term vs. Whole Life Insurance
Term Life ⭐ Recommended
Coverage for a set period (10, 20, or 30 years).
- ✅ Much cheaper (often 5-10x less)
- ✅ Simple and straightforward
- ✅ Covers you when you need it most
- ⚠️ No cash value — it's pure protection
- ⚠️ Expires at end of term
Best for: Most Canadians. Covers your mortgage years and while kids are young.
Whole Life
Coverage for your entire life with a savings component.
- ✅ Never expires
- ✅ Builds cash value over time
- ⚠️ 5-10x more expensive than term
- ⚠️ Complex and often oversold
- ⚠️ Cash value grows slowly
Best for: High-net-worth individuals, estate planning, or business owners.
How Much Coverage Do You Need?
A simple rule of thumb: 10-15 times your annual income. But here's a more precise method:
- Add up what your family would need: mortgage balance + debts + 10 years of income replacement + children's education
- Subtract existing savings and any employer life insurance
- The difference is how much coverage you need
💡 Example
- Mortgage: $400,000
- 10 years income replacement: $600,000
- Kids' education: $100,000
- Total need: $1,100,000
- Minus savings: -$100,000
- Coverage needed: ~$1,000,000
A $1M, 20-year term policy for a healthy 30-year-old can cost as little as $30-$50/month.
How to Save on Premiums
- ◆Buy young — premiums increase significantly with age
- ◆Don't smoke — smokers pay 2-3x more
- ◆Compare quotes from multiple insurers
- ◆Choose term over whole life for most situations
- ◆Check if your employer offers group life insurance (often cheaper)
🍁 Canadian Pro Tip
Life insurance payouts in Canada are tax-free to the beneficiary. A $500,000 policy pays out $500,000 — no taxes taken. This makes it one of the most efficient ways to protect your family.