Life insurance companies in Canada, rated on the evidence

A common guideline is 7–10 times your annual income, plus any debts (especially your mortgage) and future obligations like children’s education — minus what you already have in group coverage and savings. Someone earning $70,000 with a mortgage might land somewhere between $500,000 and $1 million of coverage. The right number depends on who relies on your income and for how long.

Neither is universally better — they solve different problems. Term life is cheaper and covers a defined period, so it suits most families protecting against a temporary need like a mortgage or raising children. Whole (permanent) life costs much more but never expires and builds cash value, making it a fit for lifelong needs, estate planning or leaving a guaranteed inheritance. Most Canadians buying their first policy choose term.

Term life is surprisingly affordable for healthy young adults — a large 20-year term policy can cost far less than most people assume, which is one reason surveys consistently show Canadians overestimate the price. Cost is driven mainly by age, health, smoking status, the coverage amount and the term length. Permanent policies cost several times more than term for the same death benefit.

Often yes. Group coverage through an employer is a valuable benefit, but it usually caps at one or two times your salary — below the 7–10× income many advisors suggest — and it typically ends when you leave the job. An individual policy you own travels with you and can top up a group plan to an adequate level.

Yes. No-medical and simplified-issue policies skip or shorten the medical exam and can be approved in days, which helps people with health conditions or who want speed. The trade-off is a higher price per dollar of coverage and often a cap on the amount. If you’re healthy, a fully underwritten policy is usually cheaper.

No — a life insurance death benefit paid to a named beneficiary is received tax-free in Canada. That’s a core part of why the coverage is efficient at replacing income. (The cash value inside a permanent policy has its own tax rules, but the death benefit itself is not taxed.)