Best Life Insurance in Canada 2026

Most people choose to purchase life insurance for the peace of mind that comes with knowing their loved ones will be taken care of financially if something happens to them. Life insurance payouts can help pay for final expenses, cover debts and mortgages, and more. Some people also use life insurance as a way to save money for their families by using it as an investment tool. Life insurance is a great alternative for mortgage life insurance, but it cannot substitute for mortgage default insurance.

When you buy an insurance policy, you're considered to be a policyholder. With life insurance, you're paying a certain amount of money for the insurance company to pay you a certain amount of money if you pass away. The amount of money that you pay is called your "premium", while the amount of money that the insurance company will pay you is called the "death benefit". Insurance premiums are paid monthly, quarterly, or yearly. The death benefit is paid to your beneficiaries, which are people that you'll specify, and it’s tax-free in Canada.

When it comes to life insurance, you'll need to know what to look for in order to compare life insurance companies. Here are some key factors to keep in mind:

1. Prices: You’ll want to compare prices before you select a life insurance company. Get insurance quotes from several different insurance companies and compare them side by side.
2. Policy options: It won’t do you any good if an insurance policy is cheap but doesn’t offer the coverage that you need. Look for companies that will be able to give you the coverage that you need at a price that you can afford. Also, make sure the life insurance company you select offers the type of policy you're looking for, such as term life insurance or whole life insurance.
3. Financial stability: It's important to choose a life insurance company that is financially stable and has a good rating from independent credit rating agencies. This is because you’ll want an insurance company that will be able to pay out insurance claims, both in the present and in the future.
4. Customer service: Good customer service is essential when it comes to any type of insurance. You'll want to make sure the company you choose is responsive to your needs and questions.
5. Claims process: It's important to know how the claims process works before you purchase a policy. Find out if the company has a good reputation for paying claims in a timely manner.

The average life insurance protection per household in Canada is $509,000 (up from $483,000 in 2023). That’s based on statistics by the Canadian Life and Health Insurance Association (CLHIA). In 2024, there were 23 million Canadians covered by a combined $6 trillion in life insurance, with $29.6 billion in life insurance premiums paid. That works out to $1,287 in life insurance premiums per insured person, or $107 per month. However, the cost of your life insurance can vary dramatically.

• Age: Your age is the primary predictor of risk for insurers. Premiums typically increase by 5% to 10% for every year you delay starting a policy. Locking in a rate while you are young and healthy is the most effective way to minimize long-term costs.
• The "Smoker Penalty": Smoking remains the single largest lifestyle factor. A 40-year-old smoker can expect to pay 2 to 3 times more than a non-smoker for the exact same coverage.
• Term vs. Permanent Life Insurance: Term life insurance provides coverage for a fixed period and typically has lower premiums. Permanent life insurance provides lifelong coverage and may include a cash value component. Common types of permanent life insurance include whole life and universal life.
• The "Buy-Down" Trend: Due to economic pressures in 2026, many Canadians are opting for smaller policy values (e.g., $250,000 instead of $500,000) or shorter terms to keep monthly costs manageable.
• Gender Gap: Women generally pay less than men because, statistically, they have a longer life expectancy in Canada (approx. 84 years vs. 80 years for men).

The figure below compares the cost of life insurance between Canada’s major life insurance companies. It's based on sample quotes collected for someone looking for $500,000 coverage for a 10-year term, with monthly payments.

Comparing Life Insurance Quotes for a 20-Year Old Male

Note: Sample quotes are monthly premiums for a 20-year old smoking/non-smoking male for $500,000 coverage with a 10-year term.

Life insurance companies generate revenue primarily from premiums and investment income. When you pay premiums, insurers pool this money and invest it in assets such as bonds, mortgages, and other fixed-income securities.

Insurers earn profits by:

• Collecting premiums that exceed the cost of claims and expenses
• Investing premiums to generate long-term returns
• Managing risk through underwriting and diversification

For permanent life insurance policies, part of your premium may also contribute to a cash value component that grows over time. In the case of participating policies, insurers may share a portion of their profits with policyholders through dividends.

Because life insurers invest heavily in long-term assets, their financial strength and stability depend not only on insurance operations but also on investment performance and risk management.

Manulife

Canada Life

Sun Life

Beneva

Co-operators

iA Financial

Manulife Life Insurance

Manulife CoverMe Term life insurance only offers terms of 10 years, but it can be renewed up until you are 85-years old without having to answer medical questions each time you renew. Your rate is fixed for the duration of your term, and Manulife offers a 30-day money-back guarantee. Coverage is from $100,000 to $1 million.

Manulife also offers other types of life insurance. Their CoverMe Guaranteed Issue life insurance has guaranteed acceptance, but only offers coverage options from $5,000 to a maximum of $25,000.

Manulife CoverMe Easy Issue is also a type of term insurance, with the difference being that you're only asked two medical questions. However, the coverage is also lower, up to a maximum of $75,000.

FollowMe life insurance gives guaranteed acceptance if you apply within 60 days of when your employer's insurance plan ends, such as when you're leaving your job. There's no medical questions required, with coverage options up to a maximum of $200,000.

Manulife's permanent life insurance options include Manulife Par, Performax Gold, InnoVision, and Manulife UL. InnoVision and Manulife UL are both geared towards investing. Performax Gold guarantees your death benefit, cash value, and lets you pay off your policy in 15 years. Manulife Par lets you choose your premium payments, from 10 years or 20 years, and may pay out annual dividends.

Canada Life - Life Insurance

Canada Life is one of the largest life insurers in the Canadian market based on its domestic operations. While Manulife is the largest Canadian life insurer globally by assets and revenue, Canada Life offers a wide variety of insurance options, such as health and dental insurance, life insurance, disability insurance, and workplace benefits. Canada Life’s term life insurance has flexible term options ranging from 5 years to as long as 50 years.

For permanent life insurance, Canada Life offers two types: participating life insurance and universal insurance. Both types have a cash value component. With participating life insurance, your premiums stay the same with a guaranteed payout. With universal insurance, you get to choose how your money is invested.

To access your money with Canada Life, you can either make withdrawals or borrow from your policy. In both cases, the minimum withdrawal or policy loan is $500. You'll need to pay income tax on your withdrawals.

Sun Life - Life Insurance

Sun Life term life insurance lets you choose from terms of 10, 20, or 30 years. Sun Life has four types of term life insurance products: Go Simplified Term, SunSpectrum Term, Go Term, and SunTerm. The difference between them is their ease of qualifying and coverage options, with SunTerm and SunSpectrum Term offering coverage up to $25 million, Go Term up to $1 million, and Go Simplified Term up to $100,000. In all cases, you'll need to apply through an insurance advisor in order to apply for coverage up to $25 million. Otherwise, applying online means you can only apply for up to $1 million in coverage.

Sun Life's permanent life insurance includes whole life insurance, participating life insurance, and universal life insurance. Applying online only allows coverage up to $25,000, while an advisor can go up to $25 million.

iA Financial Life Insurance

iA Financial is a major Canadian insurer with a strong advisor network and a broad lineup of individual insurance and wealth products. iA (Industrial Alliance) offers two types of term life insurance: Access Life and Pick-A-Term. With Access Life, there's no medical exam, but coverage is only up to $500,000. With a medical exam, Pick-A-Term allows for coverage up to $10 million. In both cases, you can convert your term life insurance into permanent life insurance before you turn 71 years of age. Access Life has terms of 15, 20, or 25 years. Pick-A-Term has terms of 10 to 40 years.

iA Financial similarly offers a variety of permanent life insurance products: Whole Life, Access Life, Child Life & Health Duo, and Life and Serenity 65. Child Life & Health Duo is unique in that it makes sure that your premiums are fully paid off when your child turns 30 years of age. The Life and Serenity 65 plan pays out a monthly annuity if you lose autonomy.

Coverage for iA's Whole Life insurance is up to $10 million, or up to $500,000 with no medical exam with iA's Access Life plan.

Best For: Customers looking for advisor-supported coverage, flexible product options, and a well-established Canadian insurer with a broad national presence.

Co-operators Life Insurance

A unique life insurance product offered by Co-operators is their one-year term life insurance, called Term Life 1. It offers $50,000 to $475,000 in coverage for a one-year term. That's much shorter than the 5 to 10 year minimum terms of other insurance companies. However, it's only available for those aged 18 to 49.

Co-operators also has more standard offerings, such as their Versatile Term insurance. It allows terms between 10, 15, 20, 25, or 30 years. You can also convert to a permanent life insurance policy before you turn 70 without having to undergo a medical assessment.

Unique permanent life insurance policies include Infinity Term, which is a permanent life insurance policy without a savings component. This reduces your premiums if you don't need to have a cash value in your insurance plan, such as if you want to invest using your RRSP or TFSA instead. Infinity Term is structured so that premiums are fully paid for by the time you turn 110 years old. Co-operators’ Responsibility insurance requires no medical exam, but only allows up to $25,000 in coverage. It's mostly used to cover final expenses, such as funeral costs or debts.

Canada Protection Plan Life Insurance

Canada Protection Plan offers life insurance, travel insurance, critical illness insurance, and health & dental insurance. Unique to their life insurance offerings are their guaranteed acceptance and deferred life insurance policies. These have guaranteed acceptance even if you have a serious pre-existing condition. Coverage is limited to $50,000 for their guaranteed acceptance policy. Their Simplified and Preferred life insurance policies are whole life and offer coverage up to $1 million for Preferred and $500,000 for Simplified.

Beneva Life Insurance

Beneva is Canada's largest mutual life insurer, created through the merger of SSQ Insurance and La Capitale. It is regulated by Quebec's Autorité des marchés financiers (AMF) and serves clients across Canada.

Beneva offers a range of life insurance products, including term, permanent, and universal life insurance, with flexible coverage options available through licensed advisors. Its mutual structure means it is owned by policyholders rather than shareholders.

Key Strengths

• Large mutual insurer with a strong presence in Quebec
• Broad product offering, including customizable life insurance solutions
• Policyholder-focused structure without shareholder pressure

Best For

• Quebec residents seeking a provincially regulated insurer
• Customers interested in mutual insurers
• Individuals looking for flexible, advisor-supported life insurance solutions

Insurance companies typically collect premiums earlier than they pay out claims and expenses. The funds they hold from premiums that have not yet been paid out as claims are often referred to as the "float."

Insurers invest this float, and the investment income it generates can be a significant source of profit. However, this investment income is separate from underwriting profit.

Underwriting profit refers specifically to the profit earned from insurance operations — that is, premiums collected minus claims paid and underwriting expenses — and excludes investment income.

A larger float can support an insurer's financial stability by providing funds to pay future claims and invest over time. However, financial strength is more accurately assessed using measures such as capital adequacy, reserves, and regulatory ratios, rather than float alone.

For 2021, Canada Life had the highest payout ratio out of Canada’s five major insurance companies. Canada Life collected $50.6 billion in premiums and paid out $43.4 billion in benefits and claims, giving a payout ratio of 85.8%. This means that for every dollar collected in premiums, Canada Life paid out $0.86 in benefits and claims.

Sun Life had the second highest payout ratio, at 73.3%. Manulife was next, with a ratio of 70.2%. Desjardins had a significantly lower ratio of 59.5%, while iA Financial (Industrial Alliance) had the lowest ratio of all five companies, at 54.2%.

Manulife

70.2%Payout Ratio

Annual Premiums$44.3 Billion

Benefits Paid$31.1 Billion

Canada Life

85.8%Payout Ratio

Annual Premiums$50.6 Billion

Benefits Paid$43.4 Billion

Sun Life

73.3%Payout Ratio

Annual Premiums$25.5 Billion

Benefits Paid$18.7 Billion

Desjardins

59.5%Payout Ratio

Annual Premiums$11.6 Billion

Benefits Paid$6.9 Billion

iA Financial

54.2%Payout Ratio

Annual Premiums$14.2 Billion

Benefits Paid$7.7 Billion

Sources: Manulife, Canada Life, Sun Life, Desjardins, and iA Financial 2021 Annual Reports

There are two main types of life insurance: term life insurance and permanent life insurance.

Term life insurance provides coverage for a specific period (e.g., 10, 20, or 30 years) and typically has lower premiums.

Permanent life insurance provides lifelong coverage and may include a savings or investment component. The two most common types of permanent life insurance are whole life insurance and universal life insurance.

Source: CLHIA

Term life insurance is the simplest and most affordable type of life insurance. It provides protection for a specific period of time, known as the term, after which coverage expires. If you die during the term, the death benefit is paid to your beneficiaries. If you do not die during the term, there is no death benefit paid out.

The cost of term life insurance is lower than whole life insurance because term lengths are limited. This means that you’ll need to renew your term life insurance policy once the term is over. Since you’ll be older, your renewed term life insurance will have a higher premium. In other words, term life insurance usually has a lower premium that gradually increases over time as you renew.

Term life insurance is best suited for people who need coverage for a specific period of time, such as people with young children or people who are in their working years and need coverage only until they retire.

Permanent life insurance provides lifelong coverage, as long as premiums are paid, and typically has higher premiums than term life insurance. Unlike term policies, it does not expire after a set period.

Premiums are often fixed, and many permanent policies include a cash value component that grows over time. The most common types of permanent life insurance are whole life insurance and universal life insurance.

Permanent Life Insurance vs. Term Life Insurance

One of the main advantages of permanent life insurance is that it provides lifelong coverage. Many policies also build cash value over time, which you may be able to access in the future.

However, permanent life insurance also comes with trade-offs. The biggest drawback is cost; premiums are typically much higher than those for term life insurance. Some policies include a savings or investment component, which may be less efficient than investing separately through options like an RRSP or TFSA.

So, is permanent life insurance worth it? It depends on your needs and financial goals. If you want coverage that lasts your entire life and are comfortable paying higher premiums, it may be a good fit.

On the other hand, if you're looking for more affordable coverage for a specific period, such as while paying off a mortgage or raising children, term life insurance is often the better choice.

An option for buying life insurance is to purchase it directly from the insurer. Insurance companies will have insurance advisors to help you select and customize a life insurance policy. You can also buy life insurance through an insurance broker.

If you are a member of a group, such as a professional association, a trade union, or alumni, you may be able to get group life insurance rates. These rates may be lower than individual rates. You can also buy life insurance through your employer. Some employers offer group life insurance as a benefit to their employees.

How Do Canadians Purchase Life Insurance?

Source: CLHIA

In Canada, most Canadians purchase individual life insurance. In fact, the Canadian Life and Health Insurance Association (CLHIA) estimates that over 80% of life insurance in Canada is sold to individuals through an insurance agent or advisor. Only 17% of life insurance policies in Canada are group plans, such as through an employer. That's a lot different when compared to health insurance, where 90% of health insurance in Canada is through a group plan.

Did you know that the average Canadian household has $509,000 in life insurance protection? However, the average life insurance coverage varies by province, with Alberta being the most insured province ($606,000 per household) and Nova Scotia being the least insured province ($369,000 per household). This roughly aligns with the median age of each province. The lower the median age of the province, the higher the average insurance coverage amount.

Source: CLHIA

Life insurance premiums increase with age, though minor variations from this trend may appear due to pricing differences and risk assumptions. Here's a look at how age affects life insurance premiums.

Monthly Premium vs. Age

Note: Rates shown are sample quotes by Manulife for non-smoking males for a 10-year term.

The cost of life insurance is usually higher for males compared to females. For example, a 20-year-old male has a sample quote of $25.81 per month, while a 20-year-old female has a sample quote of $17.12 per month. The figure below compares the cost of life insurance by gender.

Sample Life Insurance Quotes by Gender

Note: Rates shown are sample quotes by Manulife for non-smoking users for a 10-year term.

Smoking greatly increases the cost of life insurance. Smoking is defined by smoking in a 12-month period, which can include cigarettes, cigars, pipes or use of tobacco in any other form. This may also include using nicotine products. If you currently smoke or have smoked in the past year, you're considered a smoker for life insurance purposes. How much more do smokers pay for life insurance? Smoking can double or even triple your life insurance rates. The figure below compares life insurance quotes for smokers vs. non-smokers in Canada.

Sample Life Insurance Quotes by Smoking Status

Note: Rates shown are sample quotes by Manulife for males for a 10-year term.

Based on data by the CLHIA, Ontario has the most insurers operating in the province. There are 60 insurance companies operating in Ontario. In comparison, 56 insurance companies operate in BC. Quebec has 57 companies operating there. Across Canada, there are 65 insurers operating in total.

Source: CLHIA