Last updated: March 04, 2024

What is life insurance and how does it work?

Life insurance is a policy or contract between you and a life insurance company that can last for the rest of your life or for a specific time period. This contract guarantees that your beneficiaries will get a tax-free cash payment (also called the death benefit) when you die – this is provided you meet all the requirements in your policy. The exact amount they’ll get depends on how much coverage you buy and the type of policy you select.

Benefits of life insurance

Your beneficiaries can use the death benefit any way they want.

Certain policies offer a cash value Some permanent life insurance plans come with a savings portion called a cash value, which can help you grow your money over time. You can use cash value to pay for the cost of insurance as you age, or you can borrow from it as a loan or withdraw funds from it. Connect with an advisor about these options and any tax implications they may have. option.

You have the option to get lifelong protection where your premiums never increase This applies to most permanent life insurance policies. It does not apply to term life insurance policies..

Types of life insurance

Term life insurance

It’s temporary coverage that can last 10, 15, 20 or more years. It’s initially a cheaper option. But your premiums typically rise if you decide to renew your policy at the end of your term.

Some term plans let you convert to permanent life insurance. Permanent insurance is more expensive than term, but most plans offer premiums that remain the same for the rest of your life.

Permanent life insurance

It’s insurance coverage that lasts forever and never expires. There are three types of permanent life insurance:
whole life, participating, and universal life.

Some plans may also offer tax-preferred growth in your cash value and ways to increase the death benefit.

How to get life insurance

Get advice

Not sure what’s right for you? An advisor can explain all your insurance options and help you figure out which products meet your needs and goals. Enter your postal code below to find an advisor near you.


Get advice

Not sure what’s right for you? An advisor can explain all your insurance options and help you figure out which products meet your needs and goals.

Enter your postal code below to find an advisor near you.

Get a quote online

Answer a few quick questions to get a quote for coverage up to $1,000,000.

Frequently Asked Questions

How much does life insurance cost in Canada?

The cost varies from person to person. Your premiums depend on your age, health, and lifestyle habits (e.g. smoker, non-smoker, etc.) when you purchase life insurance.

For example, if you’re a healthy 30-year-old male, your premiums may be as little as $12/month for $100,000 of coverage – for a 10-year term life insurance policy with a non-smoker rate.

Try our free life insurance calculator to see how much your premiums or monthly costs could be.

At what age should I get life insurance? 

Life insurance can be beneficial at any age. Generally, it’s cheaper to buy when you’re young and healthy.

Is it cheaper to pay for life insurance monthly or annually?

You'll often pay less for life insurance with annual payments compared to monthly payments. However, many people find it easier to have monthly premiums factored into their budget.

How much life insurance do I need?

It depends on your personal situation and how much money your beneficiaries will need when you die.

Try our free life insurance calculator to find out how much coverage you might need to financially protect your loved ones.

Why is it worth buying life insurance?

Life insurance can help financially secure your loved ones in the event of your death. Your beneficiaries can use the money from your policy’s death benefit for any purpose, including covering the cost of funeral expenses, any debts, and income replacement to maintain their lifestyle.

Can I “cash out” or take money out of my life insurance policy before death in Canada?

Some permanent life insurance policies may allow you to do this.

Connect with an advisor for more detailed information

What if I already have life insurance through work?

It’s great if you have insurance coverage through your workplace plan, but keep in mind that you may lose that coverage if you ever leave your job. If you’re currently in the process of leaving your job, you may be eligible to replace your group life insurance with affordable coverage from our Sun Life Choices plan. Get a quote online today.

Keep in mind, it’s also important to have enough coverage to help meet all your loved ones’ financial needs. In such cases, it can help to top up your existing workplace coverage with your own personal insurance policy.

At what age can you no longer buy life insurance in Canada?

You can’t apply for most Sun Life insurance products if you’re age 85 or older. Some products may have other age limitations.

Connect with an advisor for more detailed information

What type of life insurance do I need?

It depends on your individual situation. There’s no “one-size-fits-all” type of life insurance. The kind your parents have, or that your friend just bought, may not be right for you. To help choose the right type of life insurance, you need to consider your personal and familial needs, the stage of life you’re at, and what you can afford.

The cost of life insurance can vary based on your age, assigned sex at birth, health, lifestyle, and medical history. The best solution could even be having more than one type of policy.

Connect with an advisor to find out which insurance products are best for your specific situation.

Got more questions?

A Sun Life advisor can address all your questions and help you figure out which insurance product best meets your financial needs.

Enter your postal code to find an advisor near you.

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