Helping you make wiser investment decisions

What is whole life insurance?

March 26, 2021 Courtney Reilly-Larke
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The younger you are when you obtain whole life insurance, the less expensive the premiums will be. By way of example, Roy says if you’re a single 25-year-old who rents, you may not need coverage, but when you get married, buy a home and have children, the need for life insurance increases. He adds that although whole life insurance is an option, term life insurance might be a better option as you pay off your mortgage and the amount you owe decreases.

Your age and your overall health when you sign up for an insurance policy will determine your eligibility and your rates. “The younger you are usually [means] the healthier you are, so the cheaper the premium will be,” says Roy. For example, if you were to purchase a whole life insurance policy at age five, your rates would remain the same even when you’re 80. But if you purchase it at age 80, you’d be paying upwards of $1,500 a month for the same policy.

How much does a whole life insurance policy cost in Canada?

This really depends on a variety of factors, including your specific needs in a policy and your stage of life. While it’s too complicated to know how much you’d pay as an individual without a detailed quote, it’s possible to calculate a hypothetical estimate. For men, a $250,000 benefit amount can be obtained in your mid-30s for $161 per month. For women of the same age, the same benefit is approximately $139 per month. However, if you start a whole life policy in your 80s, the price can be upward of $1,500 a month. For transgender and non-binary individuals, typically it’s based on the sex identified at birth. 

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Do you need a physical for whole life insurance?

Whether or not you require a physical exam for whole life insurance is determined by your age, the amount of coverage requested, and if there are any underlying conditions disclosed. Each company uses its own criteria to as to whether or not you would need a medical. But not having one could affect your coverage amount, as you will see in the below chart of industry averages, according to Adam Mitchell, president of Mitchell & Whale Insurance Brokers Ltd., in Whitby, Ont.

Don’t want to undergo a physical? Then you’ll have to request an amount of coverage that doesn’t require one, or opt for a policy in which it’s specifically indicated that a physical isn’t required. Whether you’ll be asked for a physical depends on the insurance provider and its initial assessment of your risks, according to Roy. But this isn’t always a bad thing. “If you’re above average health, your premium can go down. Your health is the number-one factor,” he says.

Due to regulations that came about as a result of the COVID-19 pandemic, some insurance providers have eased the requirements for physicals. 

Can you be denied for a whole life insurance policy?

There are no official statistics for people having been denied insurance coverage. But it does happen, says Roy. “I’ve had a couple of clients denied in my 20 years of working in finance and life insurance. It doesn’t happen very often. It’s more likely the client is rated high-risk and then the client decides to not take the policy.” 

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