Term vs Whole Life Insurance in Canada: Which Is Right for You?

Term life: temporary, cheap, simple

Term life covers you for a fixed period (10, 20, or 30 years). If you die during the term, your beneficiaries receive the tax-free payout. If you outlive it, the coverage ends.

A healthy 35-year-old non-smoker in Ontario typically pays $22-$32/month for $500,000 of 20-year term coverage.

Whole & universal life: permanent + cash value

Permanent policies never expire and build cash value you can borrow against. Premiums are 5-10× higher than term for the same face amount. Best fit for estate planning, business succession, and lifelong dependants.

Which should you choose?

For most Canadian families with a mortgage and young children, laddered term insurance delivers the most coverage per dollar. Consider permanent coverage after maxing out RRSP, TFSA, and children's RESP contributions.