What is a life insurance rider? How do they work?

As we often say – life insurance is not a one-size-fits-all product. Canadians purchase life insurance policies for a variety of reasons: to cover a mortgage loan or debt, to provide a financial cushion to their loved ones, or to cover the costs of their children’s education – in case the insured passes away. With such diversity in use cases for life insurance, individuals choose different coverage amounts and periods to align life insurance policies with their needs.

But, life insurance can be personalized even further with a life insurance rider.

How do insurance riders work?

A life insurance rider is an optional feature that can be added on to a life insurance policy to enhance and customize it to better address one’s unique needs.

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Types of Life Insurance Riders: Quick Reference Guide

Click on any rider name to jump to the full description below.

Rider Name Description
Term Rider Additional term life insurance on top of the base policy. Can be used to offer different amount of coverages for different time periods for the life insured under the base policy, or can also cover someone else, such as children
Child Term Rider Term life insurance for life insured’s children
Guaranteed Insurability Option to purchase additional coverage without medical underwriting at future specified intervals
Business Insurability Option to purchase additional insurance coverage without medicals as business value grows
Accidental Death and Dismemberment (AD&D) Additional payout upon: death of insured in an accident, or loss of limbs or body function as a result of an accident
Accelerated Death Benefit Early access to portion of death benefit in case of terminal illness
Critical Illness Lump sum payout if the life insured contracts a covered critical illness
Child Critical Illness Critical illness insurance for life insured’s children
Return of Premiums Premiums paid are returned when term ends, if no claim
Disability Waiver of Premium Premium waiver if life insured becomes totally disabled
Parent/Payor Waiver of Premium Premium waiver upon policy owner’s death or total disability
Credit/Mortgage Disability Insurance Covers all or part of the insured’s debt or mortgage payments in the event of their disability
Extreme Disability Benefit (EDB) Early access to a portion of death benefit in case of total permanent disability
Long Term Care (LTC) Payment to meet long term care expenses at insured’s home or in a facility
Hospitalization Income Daily cash payout in case of hospitalization
Fracture Lump sum payout if insured suffers a fracture in an accident

How do you add a rider to your life insurance?

Adding a rider to your life insurance application is a simple process. Once you decide what riders you wish to add to your life insurance policy, make sure they are offered by the insurance provider you choose.

There is much variation in the numbers and types of riders offered by various insurance companies. To ensure you get the right policy and type of coverage you want, we suggest enlisting the help of a licensed insurance broker. Insurance experts, like those at PolicyAdvisor, have extensive knowledge of all the riders offered by Canada’s best insurance companies, and can make certain you choose the provider which best suits your needs.

Our experienced advisors can help make sure all the appropriate riders are added to your policy application. Or if you feel confident enough to try it out yourself, we have created an easy-to-use tool for you to compare different life insurance companies and the riders and benefits they offer.

Can you add a rider to an existing life insurance policy?

Life insurance riders are typically added to insurance policies at the time of submitting the application or during the underwriting process.

While these riders may be used to enhance the quality of coverage for the applicant, they also increase the potential risk or total amount of payout for the insurance company. The insurance company underwriters, therefore, require riders to be included at the time of the application process, so any additional risk can be evaluated and priced upfront.

If you did not add a rider at the time of initiating the coverage and were looking to add the rider after the policy coverage has begun, then you will need to seek the insurance company’s approval. In most cases, you will have to repeat medical underwriting or at least complete a health questionnaire to establish continued good health, before a new rider can be added to your policy.

In some cases, a rider may not be available to be added after the policy has been initiated. Therefore, it is essential to review the available riders with your advisor and identify what works best for your needs.

Can you drop a rider from an existing life insurance policy?

Yes, you can generally drop a rider from an existing life insurance policy. Many insurance companies allow you to remove additional riders via a straightforward process.

Typically, one fills out a form indicating which rider(s) they wish to remove and submits it to their provider. The insured’s base coverage however continues, uninterrupted.

If you are paying for the rider and have dropped the rider from your coverage, then your premium will accordingly reduce too. However, there won’t be any refund for the period that you had a rider attached to your policy.

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Should I get a life insurance rider?

Insurance riders are a great way to personalize your coverage to meet your specific needs. The need for riders depends on your circumstances. For some, riders may not be necessary while for others, it presents a cost-effective way to get additional or better coverage without purchasing a separate insurance policy. For example, term riders can be a valuable and affordable tool to align coverage with your future protection needs that change with age.

Similarly, riders for accidental death and disability ensure that one’s family is adequately protected for sudden unexpected circumstances. But, this isn’t to say that all life insurance riders are worth it for everyone looking for augmented coverage. For example, if you have adequate life insurance coverage, you may not wish to add a separate accidental death rider. Or if you have a standalone comprehensive disability insurance policy, you may not see the value of adding a disability rider that waives your premium payments in the event of a disability.

Ultimately, the best way to identify which riders to choose is by determining one’s insurance needs and comparing different structures that address those needs. Speak to one of our licensed insurance agents today; they can help you figure out your insurance needs, whether you need the extra benefit that riders provide, and present you with the best avenues to get covered.

Glossary: Types of Life Insurance Riders

There are various types of riders that can be added to a life insurance policy, depending on what aspect you choose to augment in the policy. We have segregated them below into riders that either augment the life insurance coverage or provide a critical illness benefit or a disability or other income benefits.

Life insurance riders

Life Insurance Coverage Riders

What is a Term rider?

A term insurance rider is an option available to provide additional temporary life insurance cover, under the insured individual’s base life insurance policy. Term life riders are essentially an individual term life insurance policy that is shorter in term length than the base policy. Multiple term riders or life policies can be stacked on top of each other, to provide different layers of coverage for different time periods.

As the term riders gradually expire over time, the coverage and life insurance premium reduce allowing the insured individual to only pay for coverage that they truly need. This approach of using term riders is called ‘laddering’ and is particularly useful for circumstances where a higher death benefit is required in the early years of a policy e.g. while mortgage debt is outstanding. The term riders have a length smaller than the base policy e.g. you can add a Term 10 or a Term 20 rider to a 30-year policy.

What is a Child Term rider?

Child Term rider provides low-cost term life coverage for the insured’s child or children. The aim is to provide a death benefit rider, albeit of a limited amount, if one or more children of the insured pass away while the policy is in force. This rider allows the grieving parents and families to cover funeral expenses and help pay for counselling or other services.

A single child rider will usually cover all children of the insured, including any future additions. Generally, these riders offer a maximum of $20,000 to $30,000 in coverage. The rider typically covers natural-born children, adopted children and stepchildren named in the application and approved for coverage.

The child or children do not have to go through medical underwriting (no medical tests are required), though companies will ask a few questions to determine their insurability. Children are usually covered up to the age of 25 and have the option of converting the coverage into a permanent life insurance policy. These policies usually have fixed prices per $1,000 of coverage.

What is a Parent Protection rider?

A Parent Protection rider lets a policyholder take life insurance coverage for their parents as a rider on their base policy. Each parent requires a separate rider. The rider’s purpose is to cover estate costs (funeral costs, settling debts, taxes) on the passing away of the parents.

What is a Guaranteed Insurability rider?

Also known simply as an Insurability rider, a Guaranteed Insurability rider allows the insured to increase the amount of their death benefit. The amount and intervals at which it is allowed vary across different providers. This is helpful for those looking to increase their cover when achieving certain milestones like marriage, starting a family, or buying a home. This rider is also a good option for those expecting their income to increase significantly in the future, but cannot afford to pay for higher coverage or do not require a larger amount of coverage at present.

What is a Business Value Protector rider?

The Business Value Protector rider is a unique optional feature offered by a few insurance companies to help with the unpredictable rate at which a business can grow and the added coverage a business owner may therefore need over the years. The Business Value Protector rider gives a business owner the option to purchase additional coverage, without medical underwriting, based on the value of the business. It can also be used to protect other stakeholders in the insured’s business(es), to fund buy/sell agreements, or to pay capital gains tax if the business owner passes away.

What is an Accidental Death & Dismemberment rider?

The Accidental Death & Dismemberment rider (AD&D) provides additional financial protection. An additional benefit payment is made if the life insured dies or suffers a loss of limbs or bodily function (such as loss of hearing, sight) due to an accident.

Due to its narrower scope of coverage, accidental death benefit riders are usually cheaper to add than increasing the overall life insurance coverage amount on your policy. Many people use accidental death riders to augment their coverage without significantly increasing the cost of coverage or to provide additional support to their families in the event of an unexpected passing away from an accident. This rider also allows for lump-sum payments in the event of a loss of limbs or other bodily injuries. There are some restrictions and exclusions with accidental death & dismemberment riders. To receive benefits related to an accident, injuries or death generally must occur within a specified duration, generally within 180 days. This time period is usually within a few months of the accident date.

The rider usually expires once the insured reaches the age of 65. Also, the benefit is paid only if the death occurs from a covered accident and injuries are a direct result of the accident. Death or losses incurred due to self-inflicted injuries, war, or the commission of a crime are generally excluded.

What is an Accelerated Death Benefit rider?

An Accelerated Death Benefit rider helps you (life insured) access a portion of your death benefit, prior to when it would ordinarily be available i.e. prior to your passing away. Payment of an accelerated death benefit is usually triggered by an extreme health situation such as the advent of a terminal illness.

A terminal illness is defined as a serious ailment expected to result in limited life expectancy or death within a fixed time span, usually 12 months. Many insurance companies build terminal illness benefit riders into their policies, in which case a policyholder is not required to pay any extra premium. The terminal illness benefit is typically restricted to a maximum amount, which may be a percentage of the original death benefit.

Companies generally impose a limit on the amount of the accelerated death benefit to 50% of the policy amount or $250,000, whichever is less. That means if you have a $1 million policy, the amount that can be paid out in the event of a terminal illness is limited to $250,000. If the accelerated death benefit is claimed and approved, it reduces the tax-free, lump-sum paid upon the death of the life insured by the amount of the death benefit advanced upfront.

Accelerated death benefit riders may also be made available in the event of a permanent disability.

Critical Illness Benefit Riders

critical illness rider

What is a Critical Illness rider?

Critical Illness rider pays out a tax-free lump sum when the life insured is diagnosed with a covered illness (subject to certain conditions). This is known as a living benefit. With some policies, you may be able to choose the number of illnesses covered as well as the amount of coverage and the term length of the rider. Critical illness riders typically have a 30 day survival period that needs to be completed, before the policy can pay out the proposed benefit of the rider.

What is a Child Critical Illness rider?

A Child Critical Illness rider provides coverage for the insured’s children if they are diagnosed with a childhood illness. The exact list and number of illnesses covered vary across insurers. This rider can help parents cover the costs associated with treating some of the more serious children’s illnesses. Similar to the child term rider, this benefit can cover multiple children without necessitating medical tests.

What is a Return of Premium on Death or Expiry rider?

A Return of Premium on Death or Expiry rider returns all or a part of the premiums one has paid over the course of their policy when the policy term ends or when the individual passes away. Such riders are typically associated with a critical illness policy or critical illness insurance riders.

Disability Income Riders

disability riders

What is a Disability Waiver of Premium rider?

There are two types of Disability Waiver of Premium riders:

Total Disability Waiver: for the insured

Under this rider, life insurance premiums are waived if the life insured suffers a permanent total disability. This rider covers disabilities due to accidents as also those suffered due to a permanent illness. To claim under this rider, the life insured must:

  • not be able to perform essential duties of their occupation,
  • not be engaged in any other occupation, and
  • be receiving medical care for the condition that has caused total disability.

Generally, disability waiver riders only pay out after the individual has been totally disabled for at least 4 or 6 consecutive months. The premiums can be waived retrospectively, including for the initial 4 or 6 months waiting period. The rider is valid till a certain age of the person to be insured, most often up to the age of 60 or 65.

Parent/Payor Disability Waiver: for the policy owner or payor

The Disability Waiver rider can also be obtained on the policy owner or the payor of the policy. A Parent/Payor Disability Waiver rider is useful in cases where the policy owner or the payor of the policy and the insured are different people. As the name suggests, Parent disability waiver riders are usually applicable in cases where the life insured is the policy owner’s child while the payor waiver covers the individual making the payments for the policy (eg spouse paying premiums for a policy).

Depending on the policy, premiums may be waived upon the policy owner’s death or if they suffer a permanent total disability. This rider requires both the policy owner and life insured to provide proof of insurability at the time of the application.

What is a Disability Income rider?

A Disability Income rider provides monthly payments to the life insured in case they become disabled and unable to work. The policyholder will need to choose the time period for which the payments are to be made and the monthly payment (which is usually capped). This rider typically has a 30 or 90 day waiting period, with retrospective payments that start after the waiting period is over.

What is a Mortgage Disability or Credit Disability Insurance rider?

A Mortgage Disability rider covers all or part of the life insured’s monthly mortgage or line of credit payments in the event of their temporary or permanent disability. The payments are made for a specified period of time such as 2 years from disability, 5 years from disability, or up to the age of 65. Credit riders typically have a waiting period of 90 days, although can be retroactive to 31 days in the event of disability from an accident. Proof of the outstanding loan is usually required at the time of the claim.

What is an EDB (Extreme Disability Benefit) rider?

An Extreme Disability Benefit rider is available exclusively from SSQ as part of their term life insurance coverage at no additional cost. In the unfortunate event of a permanent and irrecoverable disability, you may receive a portion of your life insurance benefit (up to $250,000) in advance of your death. This rider generally expires at the age of 60.

Other Riders

What is a Long Term Care rider?

A Long Term Care rider pays out a portion of your death benefit if you are unable to live independently and require assistance (either at home or in an assisted care facility). This means you are no longer able to perform two or more activities of daily living (ADLs) independently.

What is a Hospitalization Income Benefit rider?

A Hospitalization Income Benefit rider provides a steady income if the life insured is hospitalized. The rider pays out a daily fixed cash amount. Typically, there is a limit on the number of days of hospitalization covered, as well as the total amount paid out. There may or may not be a limit to the number of claims.

What is a Fracture rider?

A Fracture rider provides a benefit if the insured suffers a bone fracture or total breakage following an accident. An applicant can purchase units of fracture coverage. Generally, different amounts are paid out depending on the nature and placement of the fracture (facial bones/ribs/skull, etc).

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Please note: this article contains general information about life insurance riders. It is not intended and should not be considered to constitute legal or financial advice. Also, reference to any features/conditions of specific insurance companies mentioned herein may or may not apply in the future: it is important to check with the insurance companies what features are available at the time you wish to purchase a policy/rider.

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The best whole life insurance companies in Canada – Updated 2022

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 give 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.

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Whole life insurance?

Whole life insurance (sometimes used interchangeably with permanent life insurance) is a form of life insurance that provides you with coverage from the day the policy is bought and put in force 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 premium is invested and generates cash value. This cash value may be accessed during the insured’s lifetime either by withdrawing or borrowing against it.

Unlike term life insurance which covers you for a specific duration or term, with whole life insurance you are covered for your entire life. Since you are covered for such a long time, 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, how much whole life insurance can cost, and the difference between term versus whole life insurance.

Why should I get whole life insurance?

As stated briefly above, you should get whole life insurance for distinct lifelong or permanent needs. 

Covering small debts, funeral costs, and other end-of-life expenses

A common reason some will purchase whole life insurance coverage is to provide 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) or estate taxes which need payment 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. Like all life insurance policies, the proceeds from whole life insurance policies 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. For these reasons, it is considered a good option for life insurance for seniors.

Of course, you don’t need to fit into these strict categories to purchase whole life insurance. While term life insurance is the most cost-effective option to cover temporary needs (like mortgage debt or income protection) there is a use case for anyone to have 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 policy is in force, the insurance company guarantees that your beneficiaries will receive the proceeds, when a claim is made. Put briefly, most whole life insurance policies also include a savings or investment component alongside the lifetime insurance coverage. 

A substantial part of the money goes towards 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 goes towards generating a tax-deferred savings or investment component. This fund accumulates earnings 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 life insurance 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 earnings 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.
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The best whole life insurance Canada has to offer

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. When you’re done, try reading more about our online life insurance quotes or our life insurance calculator.

Best whole life insurance companies in Canada

Assumption Life

AM BEST RATING

A-

POLICYADVISOR RATING

Best For Quick Issue

Best Whole Life Insurance for Quick Issue: Assumption Life

Product Name:
Assumption Life ParPlus
Assumption Life ParPlus Junior
Essential Whole Life

Limited pay:
20 years or until age 100

Dividend options:
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 Life offers two options for whole life insurance: Essential Whole Life (non-participating) and their flagship product Assumption Life ParPlus and ParPlus Junior. Assumption has a tiered system in which clients are not automatically required to do a medical test to obtain coverage depending on their ages and the coverage amount.

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 $999,999 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.

Essential Whole Life only allows a lifelong payment option, while ParPlus offers a 20-Pay option, as well as 5 dividend options.

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. The participating policy has the added benefit of non-guaranteed coverage and cash value growth far beyond the guaranteed amounts.

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 riders you can add to the coverage on the principal insured individual or an additional insured individual, including their Flex Term and No Medical products.

This is in addition to 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

AM BEST RATING

A

POLICYADVISOR RATING

Best For Flexibility

Best Whole Life Insurance for Flexibility: BMO

Product Name:
BMO Estate Protector
BMO Wealth Accelerator

Limited Pay:
Life pay, 10-pay, 20-pay

Dividend Options:
Paid Up Additions
Premium Offset

BMO (Bank of Montreal) has an A rating for financial strength.

BMO’s whole life insurance product is a non-participating whole life plan that mimics other participating plans, hence its unique premise. 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. Because it is not a participating plan, every year the company adds a performance bonus, not a dividend.

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).

Canada Protection Plan

AM BEST RATING

N/A

POLICYADVISOR RATING

Best For Non-Medical

Best Whole Life Insurance for Non-Medical Coverage: Canada Protection Plan

Product Name:
Guaranteed Acceptance Life, Deferred Life, Deferred Elite Life, Simplified Elite Life, Preferred Life, and Preferred Elite Life 

Limited Pay:
20-pay, pay-to-100

Dividend options:
N/A

Canada Protection Plan offers a variety of non-participating whole life insurance options. Their policies start from $10,000 in coverage. Smaller whole life insurance policies available through Canada Protection Plan 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.

Canada Protection Plan 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 is 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.

Canada Protection Plan was founded in 1992 and has always been providing quick, simplified coverage to Canadians in all insurance categories.

Empire Life

AM BEST RATING

A

POLICYADVISOR RATING

Best For Early Premium Payoff

Best Whole Life For Paying Off Premiums Early: Empire Life

Product Name:
Empire EstateMax
Empire Optimax Wealth
Solutions 100 with Cash Values

Limited Pay:
Life pay, 8-pay, 10-pay, 20-pay

Dividend Options:
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 (AM Best).

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.

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.

Solutions 100 is a whole life policy with cash values, but a premium comparable to a Term-to-100 policy.

Equitable Life

AM BEST RATING

N/A

POLICYADVISOR RATING

Best For Guaranteed Benefit

Best Whole Life for Guaranteed Benefits: Equitable Life

Product Name:
Equitable Equimax Estate Builder
Equitable Equimax Wealth Accumulator

Limited Pay:
Life pay, 20-pay

Dividend Options:
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.

One drawback of Equitable Life’s whole life insurance policies is the lack of payment term options. They only offer Life Pay and 20 Pay.

Foresters Financial

AM BEST RATING

A

POLICYADVISOR RATING

Best For Final Expenses

Best Whole Life Insurance for Final Expenses: Foresters

Product Name:
Foresters Non-Par
Advantage Plus

Limited Pay:
20-pay, pay-to-100

Dividend Options:
N/A

Foresters has a A financial strength rating from AM Best.

Foresters offers both participating and non-participating whole life products.

Foresters Non-Par Whole Life is a fixed premium non-participating product. This plan is a good option for those looking to cover end-of-life expenses. A policyholder’s beneficiary will generally not owe any income taxes on the death benefit from this product. 

It also offers up to $1,000 in bereavement assistance to the beneficiaries which can be used for grief counselling. While nothing can take away from the pain of a loved one’s death, a plan like this can help ease both the financial and emotional burden on the beneficiaries.

Foresters has a Simplified Non-Par Whole Life product as well, which provides permanent non-participating life insurance without the requirement of a medical exam.

Foresters also offers Advantage Plus Whole Life. This participating product offers the flexibility to customize a plan that helps provide financial security for your loved ones. Advantage Plus has lifetime death benefit protection, guaranteed cash value, and guaranteed premiums, with premium payment options of 10-pay, 20-pay or pay-to-age-100.

Industrial Alliance (iA)

AM BEST RATING

A+

POLICYADVISOR RATING

Best For Customization

Best Whole Life Insurance for Customization: Industrial Alliance

Product Name:
Whole Life Insurance
iA Par

Limited pay:
10, 20, pay-to-65, pay-to-100

Dividend options:
Paid-up Additions, Cash, Deposit with Interest, Annual Premium Reduction

Industrial Alliance (iA) has an A+ financial strength rating (AM Best).

iA’s (Industrial Alliance) 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 Industrial Alliance 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.

A point a potential policyholder should note; the guaranteed surrender value is only available starting on the policy’s 11th anniversary.

Lastly, iA Par is their participating whole life insurance policy. It is a typical participating policy with one omission, enhanced insurance is missing.

La Capitale

AM BEST RATING

N/A

POLICYADVISOR RATING

Best For Affordability

Best Whole Life Insurance for Affordability: La Capitale

Product Name:
La Capitale Advantage
Simplified Advantage
T-100 Pure
T-100 Enhanced
T-100 Evolvement Enhanced

Limited Pay:
Life pay, 20-pay, pay-to-65

Dividend Options:
N/A

La Capitale has a whole host of permanent products and each is tailor made for a specific need yet also include options for complimentary additional features. La Capitale Advantage is their flagship non-participating whole life insurance policy. It 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 (this is specifically for clients aged 40-80 and requires a questionnaire).

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.

La Capitale also offers three Term-to-100 variants. T-100 Pure offers guaranteed level premiums and no cash value or other features. T-100 Enhanced includes additional features like reduced, paid-up insurance from Year 10 onward and from age 75 onward, and a refund of 50% of premiums paid on cancellation (after age 75). T-100 Evolvement Enhanced is the same as T-100 Enhanced except it doesn’t have level premiums. The initial 10 years of premiums are low and gradually increase every 5 years.

Manulife

AM BEST RATING

A+

POLICYADVISOR RATING

Best For Performance

Best Whole Life Insurance for Performance: Manulife

Product Name:
Manulife Par
Performax Gold

Limited Pay:
10-pay, 15-pay, 20-pay, pay-to-90, pay-to-100

Dividend Options:
Paid-up-Insurance, Cash Dividends

Manulife has a A+ financial strength rating (AM Best).

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.

Performax Gold is a non-participating policy with coverage as low as $25,000 and allows a 15-pay option.

AM BEST RATING

A-

POLICYADVISOR RATING

Best For Families

Best Whole Life Insurance for Families: SSQ

Product Name:
Whole Life 20
Whole Life 100

Limited Pay:
Life pay, 20-pay

Dividend Options:
N/A

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.

For Whole Life 20 and Whole Life 100 one can choose guaranteed, paid-up insurance or access cash values from year 10 onward.

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 before age 60.

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 Life

AM BEST RATING

A+

POLICYADVISOR RATING

Best Classic Policy

Best Classic Whole Life Insurance: Sun Life

Product Name:
Sun Spectrum Permanent Life Insurance II
Sun Permanent Life
Sun Par Accelerator
Sun Par Protector II
Sun Par Accumulator II

Limited Pay:
Life pay, 8-pay, 10-pay, 20-pay

Dividend Options:
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 (AM Best).

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 II 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.

All of Sun Life’s whole life policies (both participating and non-participating) come with a Joint-Last-To-Die option where the policy premiums are considered paid up at the first death. This option is only applicable for life-pay options.

Wawanesa

AM BEST RATING

A

POLICYADVISOR RATING

Best Value For Money

Best Whole Life Insurance for Value for Money: Wawanesa

Product Name:
Wawanesa Whole Life

Limited Pay:
Life pay, 20-pay

Dividend Options:
Paid-Up Additions

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.

Wawanesa also offers a guaranteed issue permanent life insurance policy with coverage up to $50,000 for clients aged 45-75. The premiums for this instant issue life insurance policy are available in 20-pay.

The information above is a brief representative summary for indicative purposes only. It does not include all terms, conditions, limitations, exclusions, termination and other provisions of the policies described, some of which may be material to the policy selection. Please refer to the actual policy documents for complete details. In case of any discrepancy, the language in the actual policy documents will prevail. A.M. Best financial strength ratings displayed above are not a warranty of a company’s financial strength and ability to meet its obligations to policyholders.
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Does COVID-19 affect life insurance? Coronavirus FAQ – Updated 2022

Up-to-date COVID-19 information from trusted sources:

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What is COVID-19?

Novel Coronavirus (COVID-19) is a new strain of coronavirus that was first identified in Wuhan City, China in December 2019 and has since been detected in more than 100 countries. The virus has been named SARS-CoV-2 and the disease it causes has been named Coronavirus disease 2019 (COVID-19). Coronaviruses are a large family of viruses that are common in humans and have typically been associated with mild illnesses, similar to the common cold. The novel Coronavirus (n-COV) is a new strain that has not previously been identified in humans.

Symptoms for COVID-19 have included fever, cough, difficulty breathing, and pneumonia in the lungs, with severe pneumonia cases leading to fatalities. Generally, Coronavirus can cause severe symptoms in people with weakened immune systems, the elderly, and those with long-term health conditions like diabetes, cancer, hypertension, and chronic lung disease. On March 11, 2020, the World Health Organization declared the global outbreak of COVID-19 as a pandemic.

Since then, over the course of the ongoing COVID-19 pandemic, variants of the virus have been identified. The Delta variant was classified by WHO on May 11, 2021, and is currently the dominant variant that is circulating globally. Delta spreads more easily than earlier strains of the virus and is responsible for more cases and deaths worldwide. More recently, the Omicron variant was reported to WHO on November 24, 2021, and was classified as a variant of concern by WHO on 26 November 2021, due to its high transmissibility compared to other variants.

Does COVID-19 affect my existing life insurance policy?

If you already have an existing, active life insurance policy, then the short answer is you will be covered for any claims associated with COVID-19.

In other words, if you were to pass away due to COVID-19 or a Coronavirus-related ailment, your beneficiary will be able to make a life insurance claim. The claim would be treated in the same manner as a death caused by any other natural disease or ailment. Life insurance policies do not treat deaths caused by Coronavirus any differently from those caused by any other flu, infectious diseases, or natural causes.

In 2020, Canadian life insurance companies paid out over $154 million in claims for Covid-19-related deaths. While 2021 data has yet to be released for Canadian insurers, according to US trends life insurance payouts in 2021 were the highest they have been in over 100 years, with Covid-19-related death claims topping 2020 numbers.

Covid-19 life insurance frequently asked questions

Will receiving a COVID-19 vaccine affect my life insurance policy?

Despite what some online rumours may say, receiving a COVID-19 vaccination will not affect your insurance in any way at this time. The Canadian Life and Health Insurance Association released a statement on March 8 2021 assuring Canadians that no life insurance provider in Canada will be denied coverage or benefits when using a vaccine approved by Health Canada.

From their release:

“Getting the vaccine will not affect your insurance coverage. No one should be afraid and choose to not protect themselves from COVID-19 because they are worried about it affecting their benefits. All of Canada’s life and health insurers are supportive of Canadians receiving government-approved vaccinations to protect themselves from serious illness and death.”

If you have an existing life insurance policy, your coverage is not impacted by COVID-19.

Will COVID-19 be covered under a new life insurance policy, if I apply now?

At this point, life insurance policies will continue to provide coverage for Coronavirus-related deaths for new life insurance applications, once those have been approved.

However, if you have been recently diagnosed with Coronavirus or are currently awaiting diagnosis or treatment of the same, insurance companies will likely defer the approval, until after such treatment or diagnosis is complete. Such a deferral will be similar to deferrals required for any other ongoing health condition or treatment.

For example, some companies may implement underwriting guidelines at the time of application that state, you must not have had Covid-19-related symptoms in the last month, that your case was only mild, or that you must wait two or three months following the resolution of all symptoms. As the situation evolves, companies may continue to amend their approval guidelines, so it’s always best to check with an insurance expert at PolicyAdvisor for the latest underwriting rules.

Does my travel history to a Coronavirus-affected region affect my life insurance application?

As part of standard life insurance applications, most life insurance companies will ask questions about your recent travels in the last year – as well as ask for information on your travel plans for the next twelve months. If you have travelled to a region that has seen a wide outbreak of COVID-19, particularly in the last 1-3 months, then you can expect the insurance company to ask you additional questions.

Similarly, any imminent plans to travel to any of COVID-affected regions invite additional questions about such travel plans. In some situations, where travel may indicate elevated risks to Coronavirus, insurance companies may choose to postpone the decision around approving a policy. Learn more about life insurance and travelling and applying for life insurance while quarantined.

Will a COVID-19 claim be paid out under Critical Illness Insurance policies?

A critical illness insurance policy is a contract whereby an insurance company agrees to pay out a one-time lump sum amount to the insured, upon the diagnosis of a specified critical illness and the completion of a survival period; usually 30 days.

COVID-19 by itself is not a covered condition as defined in Critical Illness policies currently sold. Therefore critical illness policies will not payout, purely, on a positive COVID diagnosis. The novel coronavirus is a newly discovered virus strain and the vast majority of people who contract the illness are expected to make a full recovery within a relatively short period of time. However, if a claim is presented for a different covered critical illness (such as a major organ transplant, like a lung transplant) that is attributable to Coronavirus, then it will generally be viewed as a covered condition and insurance companies will consider such claims for approval.

 

Life insurance companies – generally speaking – do not currently have any policy exclusions for coronavirus or other infectious diseases in their life, critical illness, or disability policies.

If you are unsure what your policy covers, reach out to our licensed insurance experts. We will help explain your current coverage.

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Am I covered for COVID-19 under my disability insurance policy?

Disability insurance products are designed to pay a monthly benefit to replace a loss of earnings if you are unable to work due to illness or injury for the length of the policy, or until you return to work. Typically, there is a waiting period before the benefit payments start. This waiting period can be between 1 to 26 weeks for short-term policies or up to 2 years for long-term disability insurance policies. Should a Coronavirus diagnosis lead to a loss of income, the insurance companies will make a payment as long as the minimum waiting period is complete. Some companies may even waive the waiting period in the case of a positive diagnosis. Learn more about Coronavirus and critical illness insurance.

Frequently Asked Questions

COVID-19 has been declared by the WHO to be a pandemic. Are there any exclusions on life insurance policies associated with pandemics that insurance providers may introduce in the future?

A pandemic is a global outbreak of disease. Pandemics happen when a new virus emerges to infect people and can spread between people sustainably. Most life insurance policies currently do not have a disease-related exclusion. The standard exclusions pertain to suicide/self-inflicted harm or criminal activity.

Currently, there are not any exclusions on coronavirus-related deaths. However, insurance companies continue to monitor the outbreak and they reserve the right to make any changes in their product or processes in the future.

Should I be buying insurance on my life or health at this time?

Regardless of this health scare, you should be buying the appropriate amount of insurance coverage to protect you and your family at the earliest time you can. Such coverage only gets more expensive with age.

COVID-19 is a reminder that life events can emerge quite quickly and it is prudent to secure coverage ahead of time. This is just as important a time as any other to protect those that depend on you for financial health. If you would like to discuss your insurance needs, our advisors are available to assist you.

Can I apply for life insurance coverage without having to meet an advisor or undergo a medical test?

Like many other Canadians at this time, you may be practicing social distancing to prevent the spread of Coronavirus to your loved ones and community. While this may lead you to believe you cannot obtain life insurance coverage at this time, that assumption is false.

As Canada’s leading online life insurance brokers, the team at PolicyAdvisor has made finding life insurance quotes and buying life insurance an easy, quick and online process for consumers like yourself that seek the convenience of a non-face-to-face meeting to assess insurance needs. Our life insurance needs calculator can help shed light on your specific insurance requirements from your couch or kitchen table.

Our innovative algorithm parses through 100s of insurance products so you can find the best insurance policy and options for your needs. Our licensed insurance advisors are available online to answer any questions, curate your insurance choices, and help complete the application for you – all fully online.

While many life insurance products require a medical test, we have partnered with some of Canada’s leading insurance companies to arrange for life insurance coverage up to $1 million, without requiring an in-person, medical exam. We also have access to several non-medical insurance products; the coverage can be fully obtained without meeting with a medical representative.

You don’t have to wait for the self-isolation period to be over for financial protection. You can get covered from the comfort of your home as you practice social distancing – like so many of us are doing in the coming weeks to protect our communities and those most vulnerable.

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State of the Nation: Canadian Life Insurance Trends 2021

PolicyAdvisor’s latest research finds that only 48% of Canadians feel their insurance coverage adequately protects their families from the financial impact of COVID-19 should they become ill or pass away from the virus.

Our State of the Nation: Life Insurance Trends 2021 report takes the temperature on Canadians’ attitude towards spending, saving, job security, and life insurance in a near post-pandemic economy. 

While the data found consumers plan to trim budgets across the board in 2022, life insurance is spared from major cuts at this point in the pandemic.

Canadians know they’ll feel some pocketbook pain in the next 12 months. Cost uncertainty of pricing for items like grocery bills and mortgage rates are top of mind and may lead to spending cuts across the board.

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More insights from State of the Nation: Life Insurance Trends 2021

  • Over half of Canadians surveyed (59%) are concerned about inflation’s effect on the cost of living and rising interest rates. 
  • Job security concerns worry many Canadians (14%) facing a stalled economy. 
  • Canadians plan on spending less on entertainment (51%), travel (43%), and clothing (42%). 
  • The least expendable budget item for surveyed Canadians is life and health insurance. Eighty percent (80%) will maintain their current level of insurance protection throughout the ongoing health crisis, or even purchase more.
  • Over half (52%) of Canadians feel uncertain as to whether they have adequate financial protection for themselves or their loved ones should they be stricken with a COVID-related sickness or death.
  • The perceived expense of life insurance is a primary barrier for 45% of those that haven’t purchased life insurance.

Stay tuned for more in-depth analysis and breakdowns of each insurance trend in 2022. Browse the report below or download the full resolution version for free.

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The survey was conducted via Survey Monkey’s Canadian panel in November 2021 and included 500+ qualified respondents. All graphs rounded to the nearest percentage point.

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What is a guaranteed insurability rider and how does it work?

We don’t know where life will take us. We may suddenly need more life insurance coverage due to events such as marriage or having another child. In a few years, we might face new health conditions or lifestyle changes that work adversely against our insurability. 

To partially solve this issue, a guaranteed insurability rider (GI rider) allows individuals to expand their prior life insurance coverage without worrying about their future health or lifestyle conditions. 

In this article, we explain GI riders and insurance riders more generally. This post also describes how GI riders work, how much they cost, and who should consider them.

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What are insurance policy riders?

Life insurance riders are an optional add-on to enhance your policy’s coverage. If your life insurance policy were a burrito, a rider would be the option to add guacamole! The variety of riders available allow you to customize your policy to further fit your bespoke needs. 

The rider availability and costs depend on your insurer, the rider details, your health, and more. Some riders include: 

  • Hospitalization income: regular payouts in case you’re hospitalized
  • Extreme disability benefit: early access to your death benefit if you face a severe disability 
  • Return of premiums: returns some of the premiums you’ve paid over the policy’s lifetime if you’ve never made a claim
  • Critical illness: A critical illness insurance rider pays a lump sum should you be diagnosed with a covered illness

What is a guaranteed insurability option rider?

A guaranteed insurability rider allows you to increase your policy’s death benefit up to a pre-determined amount, without another medical examination. At set times throughout your policy’s life, you have the option to add this additional coverage up to the pre-determined amount. This rider is excellent for those that need a policy that can accommodate future changes that they may not be able to predict. 

Although providing a medical examination to an underwriter might not be a lot of work, your premiums could skyrocket if the test discovers new health issues. If you suspect you may face future health problems through means like genetic testing or due to a history of family health issues or lifestyle choices, a GI rider might be useful to add to your life insurance policy. It’s also beneficial if you currently have a limited budget, but want to ensure that you’ll have the option for purchasing additional coverage later on, as your budgeting flexibility improves over time.

Some insurers may offer this rider on term and permanent life insurance, but it’s most common for permanent life policies.

How does a guaranteed insurability rider work?

The typical GI rider works by allowing the insured individual the option to purchase additional coverage periodically in the future, without providing new evidence of insurability (i.e. a new application or exam). The standard timeline to exercise the rider would be 5 years from the effective date of the original policy. Many policies will also allow exercising the option to purchase additional coverage upon certain life events such as the purchase of a new house, or marriage or birth/adoption of a child. Generally, you must exercise the option within a pre-defined period upon any of these life events.

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When can you buy a guaranteed insurability (GI) rider?

The availability of a guaranteed insurability rider depends on your insurer. But, the decision of whether to add it is generally decided upon when you apply for your life insurance policy. The addition of the GI rider is approved at the stage of the underwriting process. At this stage, the insurer can view the additional financial risks of providing you with a GI rider and approve the proposed costs.

The guaranteed insurability rider cannot be added after the initial policy contract is issued, so it’s important to review its need at the time of the policy application. 

For example, if during the medical exam, the underwriter discovers that you have had cancer or other condition that commonly resurfaces after years of remission, increasing your death benefit may be financially risky to the insurance company, as the likelihood that they would have to pay out the larger death benefit would be high. 

Your insurer may let you add a GI rider after this point, but it depends on their procedures.

How often can you use a guaranteed insurability rider?

There are usually two ways to apply the guaranteed insurability option — at a set number of years or upon predetermined life milestones. These are also referred to as option dates. 

Your option dates may arrive every three to five years. Or, your policy may allow you to have your option dates coincide with events such as marriage, having a child, or other significant life events. Increasing your death benefit at life milestones may be beneficial to accommodate such significant changes as your needs may change during these times. Perhaps before one of these events, such as buying a house, you had fewer liabilities, but after you want to make sure they are covered upon your death. GI riders can help cover your increasing life insurance needs.  

To calculate your insurance needs right now, try out our life insurance calculator. This calculator takes factors such as your current liabilities (debts, mortgages, credits) and determines the amount of death benefit coverage you need for full protection.

Check out PolicyAdvisor's life insurance calculator.

How much does a guaranteed insurability rider cost?

The guaranteed insurability rider is a relatively inexpensive rider to add to your policy. But some insurers may add a guaranteed insurability rider option for free. Even when there’s a charge, it’s usually inexpensive — a few extra dollars a month depending on your insurer. 

Guaranteed Insurability Rider Options

If you are looking to have $100,000 coverage added to your death benefit in the future, the guaranteed insurability rider cost varies depending on age and gender. Keep in mind that your premiums may also increase at the time you actually exercise this rider—the following prices are for the rider only, not the increase in coverage. 

 

Age Male Female
25 $3.06 $2.55
30 $3.06 $2.55
35 $3.26 $3.06
40 $10.71 $8.36
45 $21.02 $14.99

After the initial cost of adding the option of a GI, there is another cost associated with the actual exercising of the GI option when it’s available (such as the pre-determined 3 or 5 years or upon a significant life event). Your insurer ultimately increases your annual premium to accommodate the extra death benefit they will be providing. The overall monthly premium will increase to reflect the higher death benefit being made available for you. The calculation of the increase is based on the age at which you have exercised the GI option. The later you exercise the option, the higher the price of the exercise.

Who needs a guaranteed insurability rider?

A GI rider benefits you if you have prior medical conditions or family health histories that may worsen your circumstances later. If you are concerned about health issues or lifestyle choices in the future but need additional coverage, the rider lets you obtain the additional coverage without another medical examination. So, you can protect your loved ones with adequate life insurance but without a significantly higher premium, that may be associated with adverse health or lifestyle circumstances. 

A GI rider is also beneficial where you want

Riders provide numerous ways to customize your life insurance policies. A GI rider, specifically, can help you expand your coverage in the future without an additional medical examination.

PolicyAdvisor’s licensed insurance experts can help you learn more about the life insurance and rider options available to you. Book some time with us and see how you can customize a life insurance plan for you and your family’s needs.

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Please note: this article contains general information about life insurance. It is not intended and should not be considered to constitute legal or financial advice. Also, reference to any features/conditions of specific insurance companies mentioned herein may or may not apply in the future: it is important to check with the insurance companies about what features are available at the time you wish to purchase a policy/rider.

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State of the Nation: Canadian Life Insurance Trends 2020 – Pandemic Checkup

Canadians are anxious right now. A global pandemic has changed the way we interact, live, and work. The State of the Nation: Life Insurance Trends 2020 – Pandemic Checkup is a follow-up to our 2019 State of the Nation. Back then we examined consumer trends and attitudes about life insurance planning across the country; but, a lot can change in a year! This year’s checkup seeks to determine consumer attitudes and buying behaviour towards life insurance coverage considering COVID-19’s impact on their lives.

Our research – which you can find below – shows that the recent Coronavirus pandemic has changed the way Canadians value life insurance and introduced an urgency to their need for coverage. Canadians are looking to protect themselves from unforeseen circumstances now more than ever, and are held back by misconceptions when it comes to extending their life insurance coverage during COVID-19.

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Majority of Canadians feeling anxious about their finances

More than 8 out of 10 Canadians with dependents feel anxious about their financial future in the face of COVID-19. This could be due to many factors including a pessimistic view on economic recovery, especially for those that have lost or are at the risk of losing employment or those needing to cash out their retirement savings at this time. As public and private debt continue to soar, austerity measures are expected in the medium term.

Hopefully, with recent news of effective vaccines on the way in early 2021, some of these anxieties will prove to be unfounded.

financial anxiety post covid-19

Almost 2 in 5 Canadians rely solely on their employer for life insurance coverage

38% of respondents stated they only have life insurance coverage through their group or workplace benefits, while 14% stated they don’t have any life insurance coverage at all.

Overall, 65% of Canadians say they rely on their group benefits for some or all of life insurance coverage. Recent research from the Conference Board of Canada suggests that 12% of companies making layoffs due to COVID-19 don’t plan on extending workplace benefits to laid-off employees. This could leave some Canadian households with a significant insurance shortfall.

Almost half of respondents say they have some sort of individually-owned coverage whether it is their sole coverage or augments the policy they have through their workplace benefits.

2020 canadian life insurance coverage source

Cutting expenses, but not premiums

Only 13% of Canadians plan on trying to save money by reducing what they spend on life insurance premiums. Instead, most Canadians plan on tightening their budget when it comes to entertainment, restaurants, travel, and clothing.

It’s safe to say that Canadians value life insurance and the security it offers in tumultuous times. However, for those Canadians that do feel the need to take a critical financial eye to what they are spending on coverage, there are ways to save money on life insurance.

They have options such as:

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What types of insurance to Canadians value most

Coverage that protects one’s life and health is considered the most essential to Canadians right now; this is understandable given the health concerns of the current pandemic.

Home and auto coverages are deemed a little less important. The devaluation of auto insurance can be attributed to more people working from home and no longer using their vehicle to commute; this has led to many Canadians choosing a lower mileage tier in their auto coverage.

Travel insurance is not highly valued at the moment with travel restrictions in place in most parts of Canada. This answer may have been different in March when COVID-19 travel restrictions were new and led to many trip cancellations for Canadians, both abroad and in their own country.

 

canadians value life insurance more during pandemic

How important is life insurance to Canadians?

Only 2% of Canadians feel life insurance is less important to own considering COVID-19, while 35% have not changed their views one way or the other.

However, almost two-thirds (63%) of Canadians now feel life insurance is more important to own than before the pandemic hit. COVID-19 has led to a majority of Canadians realizing how suddenly life-changing events can affect the financial outcome of those that depend on them.

how importnt is life insurance to Canadians

Are Canadians buying more life insurance coverage?

44% of Canadians plan on or have already purchased additional life insurance coverage because of COVID-19. COVID-19 has been a trigger for Canadians to purchase life insurance and a wake-up call for them to understand the state of their finances, create a budget and plan, and lock in the financial support and security they require to feel safe and sound for anything life may throw at them next.

While the other 56% of Canadians may have made no changes to their life insurance, this can be attributed to their comfort with their level of coverage and knowledge that the insurance products they’ve chosen can adequately protect them at this time.

Canadians are buying more life insurance coverage due to covid-19 graph

Barriers to purchasing life insurance

The perceived inability to purchase coverage online prevents 30% of Canadians from purchasing life insurance or adding to their existing coverage. Since COVID-19, Canadian consumers have seen industries and legacy companies adapt to the new reality of online service fulfillment. In turn, they expect insurance companies to work like e-commerce but have not seen that expectation realized.

27% feel life insurance is too expensive and 23% cite product complexity. There is a clear knowledge gap when it comes to the life insurance marketplace.

Canadians can save money and learn more about their potential policies by comparing quotes with an online broker.

Almost 12% of respondents feel buying life insurance takes too long, which can also be addressed with more modern insurance tools and practices via an online broker. 11% of respondents don’t want to participate in the exams or blood collection that can accompany medical underwriting. This speaks to another blind spot for Canadian insurance seekers unaware of the many non-medical life insurance options available.

Lastly, a lack of need prevents 36% of Canadians from purchasing any additional coverage, as they most likely already have coverage and feel no need for an additional policy.

what prevents canadians from purchasing life insurance

Customers expect insurance to work like other online retailers

Speaking to the aforementioned expectations of shoppers in the post-COVID landscape, the majority of Canadians would purchase life insurance online if given the choice. Only 21% of respondents now insist on meeting with a broker (compared to almost 30% in our previous survey).

Luckily for Canadians, online options for life insurance have increased post-COVID. Many insurance companies are approving up to $1 million in coverage (with some even going up to $2 million) without requiring a medical exam (for those below the age of 50 and in regular health).

Unfortunately, almost a quarter of respondents are not sure one way or the other if they would purchase life insurance if they complete their transaction online. More solid education from carriers and brokers around the options that are available to them could help them make an informed choice.

canadians want to buy life insurance online

Final thoughts

The biggest realization one can take away from this research is that COVID-19 has changed Canadian opinions about how much coverage they need and how they want to get it. 44% of respondents have either taken out new life insurance coverage or plan on doing so in the near future.

The appetite for online fulfillment of a life insurance policy has increased 50% year over year. Coronavirus has jump-started several industries into a new online era, and life insurance is no different. If there is any silver lining, it is the innovation in Canadian policy delivery that we have seen so far in 2020, and the even greater advances we’ll see in 2021 and beyond.

The survey was conducted via Survey Monkey’s Canadian panel in November 2020 and included 500+ qualified respondents. All graphs rounded to the nearest percentage point.

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State of the Nation: Canadian Life Insurance Trends 2019

Canadians are underinsured.

Our first State of the Nation: Canadian Life Insurance Trends 2019 seeks to determine consumer trends and attitudes about life insurance planning across the country, and it   uncovers several stunning findings about the lack of financial protection amongst Canadians in 2019.

Unlike most life insurance surveys that poll all Canadians as respondents, our study sought feedback only from those Canadians who actually need Life Insurance. Thus the results you see below are based on answers from those Canadians that have financial dependents (i.e. family members that depend on their income for settling debts such as mortgage and credit cards, or for support in paying for education, living expenses, and more).

The results – presented below – are eye-opening, with hard numbers revealing startling truths about the state of  Canadians’ financial protection and key takeaways around the national state of life insurance ownership, needs, knowledge, and appetite for change.

Canada: An uninsured nation?

Of those who have financially dependent family members, 16% do not have any life insurance coverage. But almost as problematic is the fact that 33% of respondents have coverage solely through their employer or group. This means 49% of Canadians with dependents have never purchased life insurance themselves.

While a life insurance policy through one’s employer or group affiliation is better than none at all, it can be problematic for a couple of reasons. Firstly, in most cases employer-provided coverage is minimal: a typical group benefit life insurance policy is equivalent to only one or two years of the policyholder’s salary. The bigger issue is that if the insured leaves the particular job, group, or association through which they have the policy, they mostly lose this insurance coverage. 

They also lose time; individual coverage is less expensive in one’s earlier years when there are fewer potential complications to medical underwriting. While a group policy is a nice top-up, it should not be the primary source of one’s coverage.

How did you acquire life insurance coverage?

Life insurance ownership rates

The biggest surprise was the extent to which Canadians are underinsured: The Financial Consumer Agency of Canada suggests that life insurance should cover between seven and ten years of the holder’s annual income, which is in line with many industry practitioners’ recommendation of ten years of annual income coverage. Yet, well over half of the study’s respondents (54%) have coverage equal to only two years or less of their annual salaries. A mere 22% had between two and five years’ worth of coverage.

Only nine percent of those surveyed are solidly within the recommended range.

Overall, this means 77% of Canadians are dramatically under-insured, with policies that will only cover their obligations for at most five years, a full two years less than the minimum recommendation.

How much of your annual income would your life insurance cover?

Life insurance average years of coverage

Key life insurance ownership takeaways

  • 49% of Canadians with dependents have never purchased life insurance
  • 54% of the same group have only covered 2 years or less of their salary should they pass
  • 91% of Canadians are dramatically under-insured

Life insurance needs: Canadians not honest with themselves

Just how significant is this life insurance shortfall? When asked for hard numbers, the average shortfall among respondents was $256,000. What is even more startling is that this is a self-acknowledged shortfall that respondents know exists but they haven’t started bridging it yet. 

There are several potential reasons for a shortfall like this to exist. First, many may not realize how underinsured they really are, until they are asked the question. When asked how often they reviewed their life insurance coverage, less than a quarter (22%) of respondents indicated they did so annually (the recommended frequency). 

Twenty-eight percent said they review life insurance coverage either every two or three years, but more than a third (36%) say they have never reviewed their life insurance coverage and needs. All in, almost 80% of Canadians fail to sufficiently review their life insurance coverage.

Suggested reading

How often do you review your life insurance coverage?

Life insurance coverage checkup frequency

And, despite more than three quarters of Canadians being significantly under-insured, nearly half of respondents (43%) say they are confident that they have adequate life insurance, with 57%knowing about or unsure of the adequacy of their coverage.

How confident are you in the adequacy of your life insurance coverage?

Life insurance coverage confidence

This shows a definite disconnect between the perception and reality of the country’s financial protection. Canadians are either misinformed, or simply don’t understand what their life insurance needs are. Traditional advisors and brokers don’t make it easy to educate ones’ self in regards to the ins and outs of life insurance. 

Regardless, it’s clear Canadians require more education when it comes to making life insurance decisions – and luckily PolicyAdvisor.com is dedicated to giving them the answers they seek.

Key life insurance needs takeaways

  • The average self-acknowledged life insurance shortfall for Canadians with financial dependents is $256,000
  • Almost 80% of Canadians fail to adequately review their life insurance coverage.
  • Fifty-seven percent don’t know or acknowledge they don’t have enough life insurance coverage.

Life insurance literacy – not a thing yet

Only 35% of Canadians claim they understand how their life insurance policy works “very well,” versus the balance who only understand their coverage “somewhat” or not at all.

Do you understand how your life insurance policy works?

Life insurance knowledge confidence

In light of this knowledge deficit, Canadians offered many reasons for not obtaining additional life insurance, with almost half indicating cost and 20% the aforementioned lack-of-understanding as a barrier.

This further underscores the need for better education and transparency around life insurance. There is a clear misconception that life insurance policies are unaffordable and complicated. This is unfortunate, as there are potentially many ways Canadians can provide themselves with financial protection within their budget with straightforward terms and coverage.

Other reasons for not obtaining additional insurance included procrastination (29%) and lack of a trusted advisor (10%).

Why have you not purchased life insurance?

Life insurance reasons for not getting

Key life insurance knowledge takeaways

  • Sixty-five percent of those surveyed don’t totally understand how insurance works
  • Almost half of those surveyed think life insurance is prohibitively expensive
  • Twenty percent of those surveyed put off purchasing life insurance because they think it is too complicated

Appetite for digital disruption

Thanks to an evolving digital landscape and a tech-savvy population, Canadians are able to better educate themselves about their insurance needs. However, while they are happy to seek information online, they are slower on the uptake when it comes to purchasing life insurance digitally.

This is gradually improving. Although 29% of respondents said they prefer a traditionally fulfilled in-person process with an advisor, 60% indicated a preference for an online process with  some support to complete the transaction. The main takeaway? Over 70% of Canadians crave an online component to their life insurance buying journey. 

How would you prefer to purchase life insurance?

Appetite for digital offerings in life insurance

While globally, digital fulfillment for life insurance is quite common, this is still new territory for Canadians. Despite some hesitations, we see a definite appetite amongst Canadians to add life insurance coverage, if supported through online pathways, and PolicyAdvisor.com is here to help guide them through their life insurance buying journey. One life insurance purchase at a time.

Download the report below, or check it out and pass it along using Slide Share.

The survey was conducted via Survey Monkey’s Canadian panel in September 2019 and included 500+ qualified respondents. All graphs rounded to the nearest percentage point.

Need help?
Call us at 1-888-601-9980 or book time with our licensed experts.
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