Compare $500,000 life insurance policies in Canada

Looking for a $500,000 life insurance policy or wondering how much you need to protect your family? Your life insurance policy should sync up with your income as well as your financial obligations now and in the future. If your living expenses and debt add up to $500,000, it’s worth considering that amount for coverage. What’s more, if you’re earning around $50,000 a year, this policy can protect your income if something happens to you — and at a surprisingly affordable price.

How much does a $500,000 life insurance policy cost?

Life insurance is tailored to the individual, and the rate you’re given is based on your gender, age, health, lifestyle, job and hobbies, plus the length of your policy. Generally speaking, a $500,000 life insurance policy won’t break the bank, especially if you’re healthy and a nonsmoker. And with term life insurance, your premiums stay the same for the life of the policy — so aim to lock down a rate as soon as you need coverage.

For a 20-year $500,000 term life insurance policy, a 30-year-old nonsmoking man in perfect health would pay $30.60 a month, or $22.50 a month for a woman. For smokers, the sample rate jumps to $58.95 a month for a man or $40.05 a month for a woman.*

*Based on sample rates from PolicyAdvisor, valid as of June 2020

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Name	Product	Types of Insurance	Coverage Range	Issue Ages	Medical Exam Required	Province Availability
Promoted PolicyMe Life Insurance		Term Life, Critical Illness	$100,000 - $5,000,000	18 - 75	No	AB, BC, MB, NS, ON, PEI, SK, NL, YT, NT, NU	Get fast and affordable term life insurance. Personalize your policy details and get an estimate price within seconds. No phone call, meeting or paperwork required. Get an instant decision.	Get a quote More Info	Compare	loading Fetching your data...
RBC Life Insurance		Term Life	$50,000 - $1,000,000	18 - 70	No	AB, NS, ON, PEI	Select from two unique RBC term life insurance plans to get flexible and affordable coverage that suits your lifestyle and budget. Get a free quote through Walnut.	Get a quote More Info	Compare	loading Fetching your data...
PolicyAdvisor		Whole Life, Term Life, Universal, No Medical	$25,000 - $25,000,000	18 - 75	No	AB, BC, MB, ON	PolicyAdvisor is a digital life insurance brokerage that has partnerships with 20 insurers in Canada.	Get a quote More Info	Compare	loading Fetching your data...

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Am I eligible for a $500,000 life insurance policy?

When determining your eligibility, insurance companies start by looking at your age and salary.

The younger you are, the better your position. With a young applicant, the life insurance company assumes your salary and financial responsibilities will increase as you age. In other words, companies know you’ll be able to pay and that your risk of dying during the term of the policy is lower.

Insurance carriers also consider your income. Most insurers will approve you for a policy that’s 10 to 20 times your salary. So if you earn $50,000 a year or more, you’ll likely qualify for a $500,000 life insurance policy.

If you’re a student, stay-at-home parent, self-employed or unemployed, you may have a harder time securing half a million dollars in coverage — but it’s not impossible.

Can I get $500,000 life insurance coverage without a medical exam?

Yes, if you shop around. Typically, the medical exam requirement is waived with a simplified issue, guaranteed issue or instant approval life insurance policy. But while it’s possible to get coverage without a undergoing a medical exam, the coverage may be limited and it could be difficult to find a $500,000 policy. Some features of no-exam policies are:

• No-exam policies generally have a speedy turnaround, making them ideal for people who need coverage quickly.
• The application is usually digital. The underwriters may check your driving history and records with the Medical Information Bureau.
• Most insurers cap their no-exam policies’ coverage amounts, so you may end up settling for less than $500,000.

Is a $500,000 life insurance policy right for me?

The general rule of thumb is to buy a policy that would replace your income — and therefore cover your family’s cost of living — for 5 to 10 years. If you’re earning around $50,000 a year, you might be a good candidate for a $500,000 policy.

Along with income, take your financial obligations into account. To find that figure, think about everything you pay for now and what you’d be expected to pay for in the future. This might include a mortgage, student or car loans, credit card debt, college costs for your children and business expenses. When your financial responsibilities hit the $500,000 mark, you’re in the right market for half a million dollars of coverage.

When you’re doing the math, consider:

• Income replacement. How much money would your family need to maintain their standard of living? If you’re the breadwinner, you should carry enough coverage to replace your salary for a few years, so your dependents won’t be saddled with financial burden. If your spouse is a stay-at-home parent or works part time, it’s a good idea to add extra coverage.
• Children. The younger they are, the more coverage you’ll want to get, especially if you’re paying for child care. Most people go for a policy that covers their children until their 20s, when they can start working and earning money themselves.
• College expenses. Speaking of kids, if yours are planning to go to college, consider the future costs. Depending on how many children you have and the schools they’re applying to, it might be worth getting a $500,000 policy.
• Existing debt. Unfortunately, your debt doesn’t die with you. Your policy ideally should take care of your mortgage, car loan, student loans, credit cards and any other debt.
• End-of-life expenses. Many policyholders put aside some money to cover expensive funeral, burial and related costs.
• Long-term care. Are you looking after a sick parent or one who’s in a nursing home? Factor in those costs when calculating your life insurance needs.
• Estate planning and management. As you work your way up the career ladder, you’ll most likely acquire assets and wealth. If your estate is worth $500,000, a life insurance policy can protect it and provide liquidity.
• Savings. What does your savings account or RRSP look like? Those numbers may lessen or increase your need for life insurance.
• Business ownership. If you own or are a partner in a business, a policy can offer the company financial security as well as cash flow if something happens to you. The value of your business generally determines how much coverage you need.
• Legacy. After you’ve accounted for financial responsibilities, you might want to think about leaving a legacy. Adding cushion coverage to your policy may bring it up to the $500,000 mark.

What should I watch out for with a $500,000 life insurance policy?

When your circumstances change, re-evaluate your coverage. If you find that your financial obligations and assets are now over $500,000, it’s worth looking into upgrading the value of your policy for extra protection.

But take care with buying too much life insurance. Your policy should meet your financial situation and needs, not exceed them. If most of the above points don’t apply to you, you may not need $500,000 of coverage.

Bottom line

Life insurance is incredibly personal, so it’s best to do the math for your specific situation. If your living expenses and debt come to half a million dollars, it’s worth looking at a $500,000 life insurance policy. Think about your salary, too. For those who take home $50,000 a year, this policy can offer the protection you might need.

If you’re not sure if $500,000 is the right amount of coverage, it never hurts to compare all of your life insurance options until you find the right one for you.

Frequently asked questions about $500,000 life insurance policies

• How are life insurance premiums calculated?

  Life insurance companies collect your personal and medical information, running it through an algorithm to assess the risk of insuring you.

  The price of your policy is based on three key factors:

  • Mortality. The likelihood of your death based on your gender, age, health, medical history, job and lifestyle.
  • Expenses. What your policy costs the carrier to issue.
  • Riders. Additional coverage offered for an extra fee.

• Will the cost of my policy go up every year?

  The premiums for most term policies stay the same. Even if your health deteriorates over that term, the premium you pay monthly won’t change, which is why it’s a good idea to lock down a policy when you’re young and healthy.

  There is one type of term policy that increases every year — annual renewable term insurance — but it’s not a common type of life insurance. People with poor health may get this type of insurance if they’re on track to improve their health. That way, while they may pay higher premiums for the first few years, when their health improves they can lock in a lower rate for the long term with a normal term policy.

  For traditional whole life policies, the premiums also stay the same. Whereas those with universal life insurance can adjust their monthly payments, if they like.

• I have life insurance through work. Is this enough?

  It might not be. Many employers provide group life insurance as part of a benefits package. Group life typically only offers a base level of protection, such as $50,000.

  This may be enough if you don’t have dependents or have few financial responsibilities. But if you have a mortgage, children or debt, it will probably leave you underinsured. That said, you may be able to supplement the policy by paying extra.