If you’ve been searching for the best low-cost life insurance in Canada, you might be falling into a common trap. While it’s important to find coverage that meets your budget and other needs, the best life insurance is one that will be in force when you need it.

The Worst Life Insurance

Before looking at what makes the best low-cost life insurance, let’s look at the WORST life insurance. More people end up in these situations than you might expect.

Dave is a prime example. He was a successful, self-employed IT consultant and the sole breadwinner for his family. His wife, two children, and mother-in-law all depended on his income. He knew he should have life insurance. He even researched the best low-cost life insurance and received a quote for only $30 a month. He had good intentions, but unfortunately, for one reason or another, he never purchased the policy.

Then, at age 52, Dave suffered an unexpected and fatal heart attack. His family was left with no safety net. His wife had to set up a GoFundMe to cover the bills for the first few months until she could find work. It was a lot of stress for a grieving widow – and it didn’t have to be that way.

People who knew Dave were baffled. He seemed successful and clearly loved his family. He could easily have afforded the premium of $30 a month that would have given his family a $150,000 safety net. He probably could have afforded even more. Why did he leave his family unprotected? If he had known what would happen – that his wife would be forced to beg for donations just to make ends meet – surely he would have purchased a policy.

Perhaps he thought he had plenty of time. The reality is no one knows how much time they have left. That’s why it’s a mistake to put off purchasing life insurance.

The worst life insurance policy is the one you never buy. The best life insurance policy is one that’s in force when your family needs it.

Many People Are Putting Off Life Insurance for the Wrong Reasons

Dave isn’t the only person to make the mistake of waiting to buy life insurance. The 2024 Insurance Barometer Study from LIMRA and Life Happens found that 42% of American adults need to buy life insurance or additional coverage. That’s 102 million who don’t have the life insurance coverage they need. Among households earning $50,000 per year or less, the rate of people who need more coverage is even higher, at 56%.

Many people put off buying coverage because they think it’s too expensive. However, 78% of Americans surveyed overestimate the cost of a basic term life insurance policy. Many people base their cost estimations off a “gut instinct” or a “wild guess.” This mistake leaves their loved ones without the safety net they need.

The Opportunity Cost

When it comes to thinking about cost, many people focus on the cost of doing something and forget about the much steeper cost of not doing anything.

Let’s say you’re the sole breadwinner for your family. You know your family depends on your income and understand that buying life insurance is the responsible thing to do. At the same time, you don’t expect to die and there are many other things you’d like to use your money on each month. Even just $30 a month seems like a lot to spend.

But what about the cost of NOT buying life insurance? If you die, your family will be without the safety net of a life insurance policy. By saving $30 a month, have deprived your family of the opportunity to receive a payout that may be around $150,000.

The Truth About the Best Low-Cost Life Insurance

The best low-cost life insurance is also one that meets your needs. To find the best life insurance, it helps to understand how life insurance works and what your options are. There are several misconceptions to address.

• Cost. Confusion over the cost of life insurance may stem from the fact that permanent life insurance policies can be pricey. Term life insurance, on the other hand, covers a set period of time, such as 10, 20, or 30 years. Term policies are surprisingly affordable and provide exactly the type of coverage most breadwinners need to ensure their families will be provided for. An adult in good health may be able to buy a policy for around $30 a month or less.
• Term. When you buy a term life insurance policy, you choose from terms of various lengths, such as five to 10 years on the short end or 30 to 40 years on the long end, as well as options in between. When deciding on a length, consider your goals. For example, if you’re buying coverage because you just had a baby, you probably want a term of at least 20 years. If your family just bought a house, you probably want a term that covers the length of the mortgage.
• Death benefit. The death benefit is the amount of money the beneficiaries will receive if the insured dies while the policy is in force. Whereas you might assume that bigger is better, that’s not always the case. First, you need to be able to justify the amount you’re seeking. Otherwise, the insurance underwriters may deny your application. Second, you need to be able to afford the premiums – not just immediately, but for the length of the term. Otherwise, the policy may lapse due to non-payment and your family will once again be without coverage. Consider how much you actually need and can afford.
• Underwriting requirements. Medical underwriting may be another barrier to coverage. Some people avoid applying for coverage because they’re worried that insurers will deny them based on their health issues. Misrepresenting your health is a bad idea – insurers have access to a lot of data, meaning they’ll eventually discover any health omissions and rescind your policy. However, non-medical life insurance is a great option. When you apply for non-medical life insurance, you don’t need to worry about undergoing a medical exam.
• Riders available. Life insurance riders are optional clauses that add additional benefits or terms. The downside is they also raise the cost. If you’re looking for low-cost life insurance, avoid any riders you don’t need. Examples of life insurance riders are ones that add coverage for children or add accelerated death benefits if the insured becomes terminally ill. Rider availability varies by insurance company. Some riders may not be available on term life insurance policies.

Are you ready to purchase the best low-cost life insurance in Canada?

Cibi Thomas is an independent life insurance agent who can help you shop the market and find the best life insurance policy for you. The cost of doing nothing is steep. Don’t be like Dave and leave your family unprepared.

Learn more and get a free quote today >

You’ll be glad you did!