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Life insurance vs. health insurance

If you have a family to look after, you might need both.

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Young parents with smiling baby in kitchen

Health insurance can help cover the short term by paying for immediate medical bills and health expenses. Life insurance, on the other hand, offers long term coverage and can help financially protect you and your family in the event of debilitating illness or death.

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  • Coverage amount: $100,000 - $10,000,000
  • Age range: 18 - 80
  • Medical exam required: No
  • Available in: Ontario, Alberta, Manitoba, New Brunswick, British Columbia
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Life insurance vs. health insurance

Health insurance protects you financially if you get sick or injured. Life insurance protects your loved ones financially if you pass away. Some life insurance policies can also provide additional financial protection for you and your family if you get sick or injured by paying you a lump sum to cover what health insurance won’t.

Life insuranceHealth insurance
DefinitionAn insurance policy that covers specified life events, such as death, disability and serious illness or injury.An insurance policy that covers medical appointments, procedures, equipment, prescriptions and hospitalizations.
Who gets paid?Payments are made directly to the policyholder.Payments are made directly to medical professionals for services or prescriptions; sometimes the policy holder pays upfront then gets reimbursed.
When do they get paid?After the specified event takes place. For example, term life insurance pays out upon death, and critical illness insurance pays out upon diagnosis.After billing for a medical appointment, procedure, prescription or hospitalization.
How much do they get paid?The amount listed in the policy.As much and as frequent as is covered by the policy, minus any deductibles listed in the policy.
What can the money be used for?Anything — there are no stipulations on how funds can be used.The specific medical appointment, service, procedure, equipment, etc. that the policy stipulates.

Life insurance

Life insurance provides a lump sum benefit in the event of the policy owner’s death or if diagnosed with a terminal illness and not expected to live for longer than 12 months. This lump-sum benefit ensures that the policy owner is able to meet their financial obligations without leaving any financial burden behind to their friends or family. It can also help your family pay for any expenses after you pass, including mortgage payments, school and day-to-day needs.

Health insurance

Health insurance pays doctors, hospitals and medical providers directly for medical costs — it doesn’t pay you for any financial hardship. Depending on your policy, your health insurance may cover:

  • Doctor’s appointments
  • Prescription medications
  • Home nurse care
  • Hospital expenses
  • Ambulance services
  • Overseas medical costs
  • Physical therapy
  • Chiropractic treatment
  • Dental and vision care

Critical illness insurance

A critical illness insurance policy can be added onto or bundled with traditional life insurance. It can provide a lump sum benefit in the event that the insured suffers a condition such as stroke, cancer or heart attack. While health insurance can provide assistance in covering some medical and hospital expenses, life insurance with critical illness benefits will help cover financial obligations that you could face after being forced out of work, such as:

  • Equipment for rehabilitation
  • Nursing care
  • Home or car modifications
  • Keeping up with debts and bills

Compare life insurance policies

Name Product Types of Insurance Coverage Range Issue Ages Medical Exam Required Province Availability
Manulife Life Insurance
Term Life Insurance
$100,000 - $1,000,000
18 - 70 years old
No
Ontario, Alberta, Manitoba, New Brunswick, British Columbia
Manulife's CoverMe Term life insurance is simple and straightforward coverage that suits your lifestyle and budget. Get a free quote on PolicyMe.
Canada Protection Plan Life Insurance
Canada Protection Plan Life Insurance
Term Life Insurance
$50,000-$1,000,000
18 - 70 years old
No
Ontario, Alberta, Manitoba, New Brunswick, British Columbia
Canada Protection Plan's Preferred Term life insurance is suitable for those in good health. Get a free quote on PolicyMe.
BMO Life Insurance
Term Life Insurance
$100,000 - $5,000,000
18 - 75 years old
No
Ontario, Alberta, Manitoba, New Brunswick, British Columbia
BMO Term life insurance provides you with coverage for 10, 15, 20, 25 or 30 years. Get a free quote on PolicyMe.
Assumption Life Insurance
Assumption Life Insurance
Term Life Insurance
$50,000-$4,000,000
18 - 75 years old
No
Ontario, Alberta, Manitoba, New Brunswick, British Columbia
Choose from five different term life insurance plans with Assumption Life. Get a free quote on PolicyMe.
 Life Insurance Through PolicyAdvisor
Whole Life Insurance, Term Life Insurance, Permanent, Universal
$25,000 - $5,000,000
18 - 72 years old
No
Alberta, Manitoba, Ontario
Policy Advisor is a digital life insurance brokerage that has partnerships with 20 insurers in Canada.
Sun Life Go Simplified Term Life Insurance
Term Life Insurance
$50,000-$100,000
18 - 69 years old
No
All of Canada
Sun Life Go Simplified Term Life Insurance covers you for 10 years, during which time your premiums are guaranteed not to rise. Apply for up to $100,000 in coverage.
Sun Life Go Term Life Insurance
Term Life Insurance
$100,000 - $1,000,000
18 - 69 years old
No
All of Canada
Sun Life Go Term Life Insurance is a standard term life insurance option that guarantees your premiums in the first 10 or 20 years of your policy.
Sun Life Go Guaranteed Life Insurance
Permanent
$5,000 - $25,000
30 - 74 years old
No
All of Canada
Permanent life insurance coverage that guarantees fixed premiums until 95 years old (and no premiums thereafter).
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Do I need a life insurance policy if I have health insurance?

Yes. Life insurance covers you in a completely different way, and you need both to be fully financially protected. Life insurance can provide coverage as:

Term or whole life insurance
  • Your child’s education
  • Buying a new house or paying off a mortgage
  • Paying off your credit card debt
  • Day-to-day expenses after the loss of your income
Critical illness or disability insurance
  • Ongoing medical expenses not covered by health insurance
  • Hiring a caretaker
  • Modifications to your home due to disability
  • Recovery costs

Bottom line

While health insurance can cover immediate medical services and expenses, it will not provide support for your mortgage, school expenses for your children, food, rent, clothing and any other expense that will need to be taken care of in the event of a life-altering or life-ending situation. A life insurance policy can protect your loved ones from the loss of your income.

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