Canadians search for the best whole life insurance for many reasons. Whether to manage their wealth and savings before passing them onto their beneficiaries or to simply handle some end-of-life expenses and ease their family’s financial burden at that time. Knowing what company offers the best whole life insurance for your purposes can help you plan your financial security.
Luckily, PolicyAdvisor’s years of research and experience in Canadian life insurance gives us a unique capability to help you compare the best whole life insurance companies in Canada. We present below comprehensive Canadian whole life insurance company reviews for all your individual permanent life insurance needs..
What is whole life insurance?
Whole life insurance (sometimes referred to as permanent life insurance) is a form of life insurance that provides you with coverage from the day the policy is settled until the day you die (in other words – for your entire life). There is also an investment or cash value component associated with most whole life policies. As you pay into a whole life policy over time, part of the premiums are invested and generate cash value. This cash value may be accessed during the insured’s lifetime either by withdrawing or borrowing against it.
Since you are covered for your entire life, whole life insurance usually has a higher premium. You can head to the following articles to read more about the different types of whole life insurance, and how much whole life insurance can cost.You can also use our online tool to compare whole life insurance rates.
Why should I get whole life insurance?
As stated briefly above, whole life insurance is best used for distinct lifelong or permanent needs.
Covering small debts, funeral costs, and other end-of-life expenses
A common reasons some will purchase whole life insurance coverage is for providing a form of funeral insurance so their loved ones can quickly access the funds to cover those arrangements. A lump sum of tax-free cash is paid out to your beneficiaries on your death and this can cover the aforementioned funeral expense. As well, any outstanding debts (like credit cards or loans) which needed covering can also be covered by the whole life insurance payout.
Tax-efficient transfers of assets to your estate and beneficiaries
Whole life insurance policies can also be used to pass on your planned inheritance to your loved ones in a tax-efficient manner. Whole life payouts are tax-free to your beneficiaries and therefore allow your dependents to retain a large chunk of the savings and assets you intended for them to have.
Accessing cash value during retirement years
Some may also purchase whole life insurance for the potential growth in its value. Some of this value may be accessible during retirement years and can be used to supplement income or take care of unforeseen expenses.
Of course, you don’t need to fit into these strict categories to purchase whole life insurance. Take the time to speak with a licensed life insurance advisor to ensure you are getting the right permanent life insurance for your financial security needs.
How does whole life insurance work?
Whole life insurance is a form of permanent life insurance. It is an insurance contract with an insurance company whereby as long as the premiums are paid, the insurance company guarantees that your beneficiaries will receive the proceeds, when a claim is made. Succinctly, most whole life insurance policies also include a savings or investment component alongside the lifetime insurance coverage.
A substantial part of the money goes for the cost of the insurance, which is the amount of money necessary to provide the policy’s death benefit. The balance of the insurance premiums are used towards generating a tax-deferred savings or investment component. This fund accumulates interest within the policy on a tax-deferred basis and generates a cash value for the policyholder. They can either leave it untouched until it pays out when they pass, or access the cash as needed and in some cases borrow against the value of the policy.
Read more about how whole life and other permanent insurance policies work.
Common terms we use in our reviews
There is a whole new set of terminology we use to describe different aspects of whole life insurance. Here are what some of those terms mean.
Participating policy: an insurance contract that pays dividends to the policyholder from the interest accrued on the premiums the holder pays.
Limited pay: Some whole life policies offer the ability to pay all of the premiums at an accelerated rate in the beginning years, typically in 10, 15, or 20-year periods.
Dividends: Payments available to a policyholder generated from the profits of an insurance company that sells the policy; they are typically paid out on an annual basis over the life of the policy. More on that below.
Types of dividends typically available with participating whole life insurance policies:
- Enhanced Protection – Where dividends are used to purchase one-year term life insurance for the policyholder, in addition to the base sum insured. This lets an insurance company offer a more competitive price for protection and freeing up the premiums you to go towards investment rather than straight protection.
- Paid Up Additions – Dividends go towards purchasing additional whole life insurance thus increasing the size of the final payout. The paid-up additions themselves can then earn dividends, and the value continues to compound indefinitely over time.
- On Deposit/Cash Accumulation – Dividends due to the policyholder are handled by the insurance company and earn a competitive interest rate.
- Paid in Cash – The most straightforward approach. Dividends due to the policyholder are paid directly to them. The owner may have to report a portion or all of the issued cash on their income tax return.
- Premium Reduction – Dividends due to the policyholder are used to pay part or all of the insurance policy’s premiums. If the dividend amount exceeds the premiums due, the excess is handled the same way as Cash Accumulation mode described above.
PolicyAdvisor.com has painstakingly researched the insurance companies that offer the best whole life insurance in Canada. Years of profiling and analyzing the industry’s top offerings gives us the unique opportunity to review the best Canadian whole life insurance companies and present you with a list of the top offerings available in the category. The following reviews are a must-read for anyone thinking about purchasing whole life insurance.
Assumption Life ParPlus
20 years or until age 100
Cash Dividends, Cash Accumulation, Enhanced Coverage, Premium Reduction, Paid-up Additions
Founded in 1903, Assumption has an A- financial strength rating from AM Best.
Assumption ParPlus, the flagship participating whole life product from Assumption Life, wins the award for its potential for a fast issue policy with no doctors or blood tests. No medical exam is required for whole life insurance coverage up to $499,999 for applicants between the ages 18 to 45. The amount of coverage eligible for accelerated issue reduces as one ages, but is still a very reasonable $50,000 for ages 66-69.
As with other whole life insurance plans, whether you select a life-long or 20-year premium payment term, the benefits remain the same: guaranteed level premiums, guaranteed whole life coverage and guaranteed cash values.
This, along with the flexibility to change your dividend option freely at every policy anniversary (subject to some standard limitations), and 5 different options for how you receive annual dividends, makes Assumption Life a great option for those looking for a quick-issue whole life insurance policy. The company also offers several other non-medical non-participating products including Golden Protection, Total Protection, No Medical Whole Life and Essential Whole Life – providing several options for those in the market for simplified issue whole life products.
BMO Insurance Whole Life Plan
Life pay, 10-pay, 20-pay
Paid Up Additions
BMO (Bank of Montreal) has an A rating for financial strength.
BMO’s whole life insurance product is a non-participating whole life plan. It offers an increasing death benefit, guaranteed cash values, and guaranteed level premiums. The plan is very flexible: It includes several features which can help manage your insurance coverage based on your various circumstances.
Some of these are: premium switching (changing the premium payment period), premium offset (you have the choice to stop paying premiums and have them deducted from the paid up value of the policy’s existing cash value), additional payments (you can accelerate growth of the death benefit and cash value by making additional payments whenever possible) and policy loans.
The plan can help a number of different target groups achieve their goals; be it the jet set (like those who have maxed out their RRSPs and TFSAs and are looking for additional investment avenues), business owners (those looking for an effective way to pass on corporate assets to shareholders’ heirs), young families (who need a cost effective way to replace their lost income in case of an unfortunate death) or children and grandchildren (parents or grandparents can gift them life-long coverage with guaranteed premiums and cash value).
Guaranteed Acceptance Life, Deferred Life, Deferred Elite Life, Simplified Elite Life, Preferred Life, and Preferred Elite Life
10-pay, 20-pay, pay-to-65, pay-to-100
CPP’s whole life insurance policies start from $10,000 in coverage. Smaller whole life insurance policies available through CPP are ideal to cover funeral costs and other expected final expenses. The premiums are guaranteed for life as long as you are consistently paying them.
The purchasing process is straightforward and the coverage is affordable. In many cases there is no mandatory medical exam, depending on your current health and the policy coverage amount.
CPP has non-medical options catering to everyone depending on their individual health circumstances: Guaranteed Acceptance Life coverage is meant for those with severe health conditions and typically find it hard to find coverage elsewhere, or were even previously refused insurance; Deferred Life coverage is available to protect those with significant health issues.
On the other hand, for those in good health who want coverage quickly, there are a range of options in their Simplified Life and Preferred Life category. Preferred Life can offer quick, non-medical whole life coverage for as much as $1,000,000.
CPP (Canada Protection Plan) was founded in 1992 and has always been providing quick, simplified coverage to Canadians in all insurance categories.
Life pay, 8-pay, 10-pay, 20-pay
Annual Premium Reduction, Cash Accumulation, Cash Dividends, Enhanced Coverage, Paid-Up Additions
Empire Life was founded in 1923 and has an A rating for financial strength.
Empire Life is the only Canadian life insurance company to offer an 8-pay option – this makes it easier to pay off all your whole life insurance premiums early. If utilizing this option, after paying elevated premiums for 8 years, one can then rest easy knowing they have life-long coverage (and cash value growth) without any additional obligation to pay premiums.
Empire Life’s flagship Estatemax product is designed for those looking to build wealth through long term cash values, and to increase their life insurance benefit for estate planning purposes or charitable donation. Policyholders also have the option to access the cash value in the long term.
Estatemax provides some of the highest guaranteed cash values in the later years of the policy. The non-guaranteed values are also above average, making this one of the more popular whole life insurance products in the Canadian market.
Empire Life also offers Optimax. This participating product is designed for those who plan to retire soon and wish to access the cash value of the policy in the first 20 years. Optimax’s cash values can also help with covering children’s education costs and other expenses within the policyholder’s lifespan and provide protection for small business owners – through life insurance coverage for the owner and higher early cash values.
Both plans come with a range of dividend options.
Equitable Equimax Estate Builder
Life pay, 20-pay
Annual Premium Reduction, Cash Accumulation, Cash Dividends, Enhanced Coverage, Paid-Up Addition
Equitable Life’s flagship Equimax Estate Builder product provides Canadians higher guaranteed cash values in the long term compared to their competition. Its non-guaranteed cash and death benefit values are also attractive – particularly the non-guaranteed cash value. This plan is tailored for Canadians seeking long term financial planning. In exchange for their patience they are awarded very attractive cash values.
Equimax Estate Builder can also be used to pass on wealth to loved ones and other beneficiaries for the purpose of estate planning and charitable giving.
Equitable Wealth Accumulator is Equitable Life’s other participating offering. While Estate Builder is focused on long-term values, Wealth Accumulator is more focused on building cash value in an accelerated manner during the earlier years. It can be a great option for small business owners from a business-protection perspective and for individuals who would like to access their cash values in the early years of their retirement.
Both plans offer the full range of dividend options.
PlanRight Whole Life Insurance
PlanRight, Foresters’ flagship whole life product, is a fixed premium non-participating product primarily targeted at meeting end of life expenses. A policyholder’s beneficiary will generally not owe any income taxes on the death benefit. While nothing can take away from the pain of a loved one’s death, a plan like this can help ease the financial burden on those expected to shoulder the financial responsibility of funeral expenses.
The Accelerated Death Benefit (for those with a terminal illness), Common Carrier Accidental Death Rider (for accidental death or injury) and Family Health Benefit Rider (meeting family health expenses) are complementary with the plan.
As well as this, Foresters also offers another whole life insurance product: Advantage Plus II Whole Life, Foresters’ participating product, offers the flexibility to custom build a plan that helps provide financial security for your loved ones. Advantage Plus II has lifetime death benefit protection, guaranteed cash value, and guaranteed premiums, with premium payment options of a 10-pay, 20-pay or pay-to-age-100.
Whole Life Insurance
10, 20, pay-to-65, pay-to-100
Industrial Alliance (iA) has an A+ financial strength rating.
iA’s non-participating whole life insurance plan offers a high level of customization. Be it payment options (10-pay, 20-pay, pay-to-65, and life-pay), the face amount, or multi-insured coverage (up to 9 people on the same policy), alongside a number of optional riders, there is a huge degree of flexibility for iA policyholders.
You even have the choice to pay your premiums on a semi-annual basis, in addition to the annual and monthly options offered by most other insurers.
Another unique feature offered by iA’s whole life product is their coverage for children (ages 0-20 at issue), the applicant can later increase their coverage by up to 200% of their original face amount without providing proof of insurability (the limit being $150,000).
The only point to a potential policyholder should note? The guaranteed surrender value is only available starting on the policy’s 11th anniversary.
Life pay, 20-pay, pay-to-65
The Non-Participating Advantage is La Capitale’s flagship whole life insurance product. This is known for its affordable premiums which help in limiting financial commitments later on in life. It is available for both individuals and as joint coverage.
There are a number of riders available, including a Children’s Life and a Children’s Critical Illness rider. The Advantage Series also comes in a Simplified Advantage version, where a potential policyholder can get permanent coverage without going through a medical exam or providing a blood sample.
In addition, La Capitale has other non-participating products in the whole life space:
Horizon 50+ is targeted at the 50-75 age bracket and is a simplified issue plan. This plan offers an additional Succession Advantage benefit to Quebec residents – it reimburses legal fees and estate related expenses up to $1000.
Affirmative is low cost no-medical whole life insurance for anyone (18-80) with just four eligibility questions and a maximum coverage of $25,000.
Life pay, 20-pay, pay-to-65
Manulife offers both participating (Manulife Par) and non-participating products (Performax Gold). Manulife Par – however – is their flagship whole life product.
The product offers attractive long-term cash value and death benefit growth without compromising access to those cash values in the early years of the policy.
The minimum coverage offered is $100,000. The premiums for Manulife Par are higher compared to other products in the market. However, higher premiums create the potential to earn higher dividends, in turn supporting the higher non-guaranteed cash and death benefit values promised.
Policyholder’s also have an option to withdraw dividends annually. They also offer limited pay options for those that may want to pay off the premiums early.
There is even an option to switch between some of the payment options during the life of the policy.
SSQ Whole Life
Life pay, 20-pay
SSQ was founded in 1944 and has an A- rating by AM Best.
SSQ’s whole life offering is ideal for couples, young families, and empty nesters.
It boasts many options for the number of lives covered: Individual, Multi-Life, Joint-first-to-die (up to 5 lives), and Joint-last-to-die (2 lives). Though take note: Joint-first-to-die and Joint-last-to-die are available only if life pay is chosen as the payment period.
Guaranteed cash values and other dividend specific benefits start on the 10th anniversary of the policy.
Additional benefits include: a critical illness rider of up to $20,000 with no further underwriting required, a child illness rider, a waiver of premium for disability, and an additional accidental death benefit. An extreme disability benefit is also included, which can pay out 50% of the initial whole life insurance amount in a case where the policyholder suffers a disability.
This is a great option for families looking for protection against the unfortunate death or disability of their primary breadwinner, as well as those looking to extend coverage to all their family members.
Sun Par Protector
Life pay, 8-pay, 10-pay, 20-pay
Cash Dividends, Cash Accumulation, Enhanced Coverage, Premium reduction, Paid-Up Additions
Sun Life is one of the oldest and largest insurance companies on the planet. It was founded in 1844 and controls over $20-billion in assets worldwide. It has an A+ financial strength rating.
If you are a lover of all things vintage, such as record players, old movies, classic cars, signing documents with pen-and-paper and meeting an insurance representative face-to-face, Sun Life is hands down your best option for whole life insurance.
Sun Par Protector is a participating whole life insurance product that seeks to generate long-term cash value and death benefit growth.
Sun Par Accumulator II is another product from the Sun Life stable which focuses on higher cash value growth in the near term. The company also offers an 8-pay option through Sun Par Accelerator.
Sun Permanent Life is a non-participating product and offers simple and straightforward protection with the option of increasing the death benefit later on in the life of the policy. It can be used to provide a financial foundation for one’s beneficiaries and also for charitable donations. It offers single and joint coverage, a number of complementary benefits, and optional riders.
One big caveat to keep in mind: some of the Sun Life products have a minimum coverage amount of $250,000.
Sun Life offers two more permanent life options: Sun Spectrum Permanent Life II which is ideal for people who do not wish to actively manage their coverage, but require life-long protection; and Sun Life Go Guaranteed Life Insurance – guaranteed no-medical life insurance with a coverage range between $5,000 and $25,000.
Wawanesa Whole Life
Life pay, 20-pay
Founded in 1896; A grade financial strength rating by AM Best.
Wawanesa’s participating whole life insurance product offers some of the best value amongst all the insurers in our reviews.
They offer higher coverage amounts at a lower premium cost than many of their competitors and is therefore one of the most affordable whole life insurance choices in Canada.
Wawanesa also offers high guaranteed cash values early on, especially through their 20-pay product. There’s a very good chance you will “break even” (have access to a guaranteed cash value higher than the sum total of the premiums you have paid) in 20 years or under!
You can also build additional coverage with dividends; Wawanesa lets policyholders purchase paid-up additional insurance with the value from their dividends. This coverage will never expire or require additional premiums and also builds on the cash value of one’s policy.