The best time to buy life insurance is now, especially when you’re young, healthy, and planning for long-term financial stability. In Canada, purchasing whole life coverage in your 20s or early 30s can significantly reduce lifetime premium costs while giving your cash value decades to grow. Early buyers not only lock in lower rates but also build meaningful tax-advantaged savings that can be accessed later in life.

Many Canadians postpone buying permanent coverage until a health scare or major milestone forces the decision. However, those who act early benefit from guaranteed lifelong protection, steady cash accumulation, and the flexibility to use policy loans or dividends to support future financial goals.

In this guide, we will take you through the optimal timing for whole life insurance, key life stages that justify permanent coverage, and the factors that affect your long-term costs and eligibility, helping you decide when to secure a policy that grows with you for life.

When should you get life insurance in Canada?

You should get life insurance as soon as someone depends on your income or you have financial obligations that could burden others after your death. For most Canadians, the best time to buy life insurance is in your mid-20s to early 30s, when premiums are lowest and health complications are least likely to affect eligibility.

Key reasons to buy life insurance

• Financial dependents: A spouse, children, elderly parents, or family members with special needs who rely on your income
• Mortgage or major debt: Outstanding balances that could transfer to your spouse or co-signers (spouses are not automatically liable for individual debts, but co-signers are. Joint debts and some provincial rules may create liability)
• Business ownership: Partners or employees who depend on your contribution for the company’s stability
• Loss of group coverage: Leaving an employer that provided life insurance benefits
• Estate planning needs: Wealth transfer goals or covering final expenses such as funeral costs

According to the Canadian Life and Health Insurance Association (CLHIA), 1 in 3 Canadian households would experience financial hardship within a month if a primary income earner died unexpectedly. Waiting for the “perfect moment” often leads to higher premiums or limited coverage options later in life.

Best time to buy life insurance by age

The best time to buy life insurance in Canada is between 25 and 35 years old, when premiums are at their lowest and rates can be locked in for 20 to 30 year terms. Every year of delay increases premiums by 4–8% for ages 25–45, but can be as low as 3% or as high as 10% depending on age band and insurer.

In your 20s

• Premiums are at their lowest. A healthy 25-year-old male can secure $500,000 in 20-year term coverage for $25 to $35 per month
• Medical qualification is easier with fewer pre-existing conditions
• Longer coverage periods are available, including 30 to 40 year terms
• Ideal for covering student loans, a new spouse, or early career debt

In your 30s

• Rates remain favorable, though 15 to 25 percent higher than in your 20s
• Perfect timing if starting a family or buying a first home
• Most cost-effective decade to purchase permanent insurance and build cash value
• Critical window before health issues typically arise in your 40s

In your 40s

• Premiums increase 30 to 50 percent compared to your 30s
• Medical underwriting becomes stricter as health conditions emerge
• Conversion options from employer group coverage become important
• Last opportunity for affordable 30-year term policies before age 50

In your 50s and beyond

• Premiums rise sharply. Coverage can cost two to three times more than for a 30-year-old
• Many insurers limit term lengths to 20 years for applicants over 55
• Simplified or guaranteed issue policies may be necessary if health has declined
• Permanent insurance may be more suitable for estate planning than income replacement

For example, a 30-year-old non-smoking male in Ontario purchasing $500,000 in 20-year term coverage pays about $30 per month. Waiting until age 40 increases the cost to $48 per month, a 60 percent increase for a 10-year delay.

When is the best time to get life insurance during life events?

The best time to get life insurance during life events is immediately before or during the event itself, particularly marriage, buying a home, or expecting a child. Securing coverage before these milestones ensures protection is in place when financial responsibilities increase, rather than scrambling afterward.

Critical life events that require immediate coverage:

• Getting married or common-law: Your partner now depends on your income for shared living expenses, debt payments, and future plans. Dual-income couples should each carry life insurance coverage equal to roughly 7 to 12 times their annual income, a common rule of thumb cited by FP Canada and major banks. While 10 to 12 times is often used as a benchmark, actual needs can vary based on lifestyle, debts, and long-term financial goals.
• Expecting or adopting a child: Purchase coverage during pregnancy or adoption proceedings, not after the child arrives. The sleep deprivation and adjustment period of new parenthood makes insurance shopping difficult. A $500,000 policy ensures your child’s education, childcare costs, and daily expenses are covered if you die prematurely.
• Buying a home: Your mortgage represents potentially decades of debt that shouldn’t fall entirely on your spouse. While mortgage life insurance exists, individual term life insurance offers better value, portability, and flexibility. Purchase coverage equal to your mortgage balance plus 5 to 7 years of living expenses. This is a common guideline, though some financial experts recommend 3 to 10 years depending on your family’s needs.
• Starting a business: Business owners need coverage that protects both personal and commercial obligations. Buy-sell agreements funded by life insurance ensure business continuity if a partner dies. Key person insurance protects the company from financial losses when crucial employees pass away.
• Career advancement: Major salary increases create lifestyle inflation that your family expects to continue. Always update your coverage after major life events and significant raises.
• Divorce or separation: Life insurance often becomes part of custody and support agreements. Courts may require coverage that guarantees child support and spousal support payments continue if you die before obligations end.
• Caring for aging parents: If you’re financially supporting elderly parents or they’ve co-signed loans with you, life insurance prevents their financial hardship if you predecease them.

Things to consider when buying life insurance

Buying life insurance in Canada is one of the most important financial decisions a person can make. The right policy protects your family from financial hardship, covers outstanding debts, and can even support long-term planning goals such as estate planning or education funding.

Before applying, Canadians should carefully evaluate four key factors: how much coverage they need, the type of policy that fits their goals, the term length or permanence of coverage, and how health and lifestyle affect premiums. 

Calculating your coverage amount

Income replacement method: A common approach is to multiply annual gross income by 10 to 12. For example, a $75,000 salary requires $750,000 to $900,000 in coverage to replace income through investment returns of 3 to 4 percent annually.

The DIME formula (Debt, Income, Mortgage, Education)

• Debt: Include all consumer debt such as credit cards, car loans, and personal loans
• Income: Factor in 10 years of gross salary to maintain your family’s lifestyle
• Mortgage: Include the outstanding balance on your home
• Education: Estimate the cost of your children’s post-secondary education, typically $80,000 to $120,000 per child in Canada

Adding these four components provides a minimum recommended coverage amount.

Types of life insurance policies you can choose from

Term life insurance

• Provides coverage for a fixed period, usually 10, 20, or 30 years
• Offers the lowest premiums, ideal for temporary obligations such as mortgage protection or dependent children
• Does not accumulate cash value
• Convertible to permanent insurance without medical underwriting within a set period
• Best suited for the majority of Canadian families focused on affordable protection

Whole life insurance  

• Provides lifetime coverage that never expires
• Builds cash value that can be borrowed against or withdrawn
• Premiums are typically five to ten times higher than term insurance
• Useful for estate planning, final expenses, or wealth transfer strategies
• Consider permanent coverage only after maximizing RRSP and TFSA contributions

Health factors that affect your rates

Your medical history, lifestyle, and family health background determine your premium classification: preferred, standard, or substandard. The common conditions that can increase your life insurance premiums are:

• Diabetes, especially with complications
• Heart disease, previous heart attacks, or cardiac procedures
• Cancer history, often requiring 2 to 5 years cancer-free for standard rates
• High blood pressure or cholesterol requiring medication
• Obesity (BMI over 30 to 32 depending on insurer)
• Sleep apnea requiring CPAP treatment
• Recent hospitalizations for mental health conditions
• Dangerous hobbies such as aviation, scuba diving, or rock climbing
• Tobacco use including smoking, vaping, or nicotine products, which can increase premiums by 150 to 200 percent

Key application considerations

• Apply before health changes: If you anticipate surgery, treatment, or a new diagnosis, apply beforehand. Once diagnosed, even treatable conditions can increase rates
• Timing and planning: While no season is better for applications, completing the process before year-end can help with financial planning. Avoid applying while experiencing an active illness since it may delay underwriting
• Multiple policy strategy: Consider laddering term coverage to reduce costs as obligations decline. For example, $300,000 for 30 years to cover a mortgage and $200,000 for 20 years to cover children until independence

Best time to buy term life insurance

The best time to buy term life insurance is when you have temporary financial obligations that will eventually disappear, typically in your 20s through 40s when you’re raising children, paying a mortgage, or building career momentum. Term insurance offers maximum coverage at minimum cost for time-limited protection needs.

Optimal scenarios for term life insurance:

• Mortgage protection: Align your term length with your mortgage amortization. A 25-year mortgage needs a 25 or 30-year term policy. As you pay down principal, your coverage decreases naturally while premiums stay level.
• Dependent children: Calculate years until your youngest child reaches financial independence (typically age 22-25). A newborn requires 25-30 year coverage; a 10-year-old needs 15-20 years. This ensures income replacement and education funding throughout their dependence period.
• Income replacement during working years: If you’re 35 years old and plan to retire at 65, a 30-year term policy provides protection through your peak earning years when your family depends most on your income.
• Business loan coverage: Business debt with personal guarantees requires term coverage matching the loan period. A 10-year business loan needs a 10 or 15-year term policy protecting partners and lenders.

Selecting the length of your term policy

Choosing the right term length is a key factor in buying life insurance in Canada. The decision impacts both premium costs and how long your family is financially protected. Shorter terms offer lower premiums for temporary obligations, while longer terms provide extended coverage for mortgages, children, or long-term income replacement. Here are the advantages of 10, 20, and 30-year terms to help you match coverage to your financial goals and life stage.

10-year term:

• Lowest premiums for short-term needs
• Ideal for covering temporary debt or business obligations
• Often used as supplemental coverage during peak expense years

20-year term:

• Most popular term length in Canada
• Balances affordability with long-term protection
• Perfect for young families or new homeowners

30-year term:

• Maximum term length for most applicants under 50
• Best value for long-term obligations
• Locks in rates through retirement age for younger buyers

Renewable vs. convertible life insurance: Choose policies with conversion riders allowing you to switch to permanent insurance without medical underwriting. This protects your insurability if health deteriorates before term expiry.

Best time to buy whole life insurance

The best time to buy whole life insurance is when you want lifelong protection and long-term wealth accumulation, ideally in your 20s to 30s when premiums are lowest and cash value growth has decades to compound. Unlike term coverage, whole life insurance never expires, making it ideal for estate planning, generational wealth transfer, and tax-efficient savings.

Key uses of whole life insurance

Estate planning: Whole life insurance ensures your heirs receive a tax-free death benefit to cover final expenses, taxes, or equalize inheritances. The earlier you buy, the more your policy’s cash value can grow, providing liquidity later in life.

Wealth accumulation: Policies accumulate guaranteed cash value and potential dividends over time. Buying early maximizes compounding and creates a low-risk, tax-sheltered asset for future borrowing or retirement income.

Children’s or grandchildren’s insurance: Purchasing whole life for a child locks in their insurability and provides a lifetime of coverage. Premiums are minimal, and the policy can later fund education, a first home, or business startup through policy loans or withdrawals.

High-income earners or business owners: Whole life offers tax-efficient strategies for sheltering corporate retained earnings or supplementing retirement income. Policies can be corporately owned, providing long-term financial stability and estate advantages.

Philanthropic or legacy goals: Whole life insurance allows you to leave a charitable legacy or ensure long-term family financial security through a guaranteed payout, no matter when you pass away.

If you currently hold a term policy, choosing a convertible term plan lets you transition to whole life insurance later without a new medical exam, protecting your insurability. Paid-up additions and limited-pay options can help you grow value faster or finish payments early.

How health changes affect your life insurance timeline

Health changes can significantly influence life insurance costs and eligibility in Canada, which makes applying early an important financial decision. While minor medical diagnoses can raise premiums, serious or chronic conditions may lead to postponed or declined applications. Understanding how insurers assess common health issues helps you secure affordable coverage before risks develop.

Pre-existing conditions and waiting periods

Cardiovascular conditions: Heart attacks, strokes, or cardiac surgeries typically require a one- to five-year waiting period before standard rates are considered. Recent diagnoses can lead to substantial premium increases or table ratings that add 25 to 100 percent to the base cost.

Cancer history: Most insurers require applicants to be cancer-free for two to five years before offering standard rates. The required period depends on the type and stage of cancer. Early-stage cancers in complete remission may qualify sooner, while active or metastatic cases usually result in coverage denial.

Diabetes management: Applicants with Type 2 diabetes and well-controlled blood sugar levels (HbA1c under 7.0 percent) can often qualify for standard or slightly elevated rates. Type 1 diabetes or uncontrolled Type 2 diabetes with complications can increase premiums by 50 to 150 percent.

Mental health conditions: Stable cases of depression or anxiety with consistent treatment and no recent hospitalizations may qualify for standard rates. However, a history of suicide attempts, hospitalizations within the past two years, or multiple psychiatric medications can result in postponement or denial.

BMI and weight considerations: Obesity with a body mass index (BMI) between 30 and 35 can moderately increase premiums. Severe obesity (BMI over 40) may lead to significantly higher rates or coverage denial. A weight reduction of at least 10 percent can qualify you for a rate reconsideration with many insurers.

Things to consider when applying for life insurance in Canada

When planning to apply for life insurance, timing matters. Certain health events or medical procedures can temporarily delay approval or increase premiums, so consider the following before you apply.

• Apply before scheduled surgeries: Even minor elective procedures such as gallbladder removal or hernia repair can delay applications for three to six months after surgery. Completing underwriting before any planned medical procedure helps avoid interruptions.
• Secure coverage before genetic testing: Canadian insurers cannot use genetic test results you do not yet know. However, if you later receive a positive result indicating a hereditary condition, it can influence future underwriting decisions. It is advisable to obtain coverage before undergoing genetic testing if your family history suggests elevated risk.
• Pregnancy considerations: Pregnancy alone does not affect premiums, but applying early in pregnancy is recommended. Complications such as gestational diabetes or preeclampsia can affect eligibility or rates. Post-pregnancy complications may also impact future applications.

Guaranteed issue and simplified policies

If health has declined significantly, guaranteed issue life insurance may be the only option. These policies do not require medical exams or underwriting but provide limited coverage, typically between $10,000 and $50,000, at higher premiums. They are designed primarily for final expense protection when traditional life insurance is no longer available.