Many Canadians skip life insurance due to myths. The truth? It’s affordable, necessary at any age, and employer coverage isn’t enough. Get your own policy to protect your family—no excuses.
No one likes to plan for a major injury or early death. Unfortunately, illnesses and other accidents can occur to anyone, at any time in their life.
Life insurance is a necessity to make sure that the people you love will be taken care of financially should anything happen to you. It provides peace of mind and an essential financial safety net, especially in today’s increasingly uncertain economic climate.
The real question is, what is and isn't true about life insurance?
Use this guide to learn more about common life insurance myths and the truth about term and whole life insurance in Canada—especially in 2025, when new trends and tools are reshaping how we protect our families.
7 Common Life Insurance Myths
Most of the misconceptions people believe about life insurance are just ways to convince themselves they don't need it. For most people, it's a good idea to have at least some life insurance coverage to help cover expenses after they are gone. For parents with young children, this becomes even more paramount.
In 2025, with the cost of living rising and family structures becoming more complex, planning ahead is more important than ever. Below are some of the most common arguments people make—and why they’re no longer valid.
Myth 1: I'm Young, Single, and Healthy
Many single adults in their 20s and early 30s don't believe they need life insurance. They argue that they have no dependents or spouse to take care of and no one counting on them for support. Oftentimes, they can't convince themselves that there is any need since their lives have just begun.
Sad to say, even single people will likely leave behind significant financial obligations after they are gone. The average cost of a funeral in Canada is now over $15,000, especially when factoring in rising cemetery fees and inflation. If you don't have life insurance, it will fall to your parents or other family members to cover.
This total doesn't count student loans, credit card debts, and other major financial considerations. Even if you aren't directly supporting anyone, you don't want to burden those you leave behind.
Updated Tip: Locking in life insurance while you’re young and healthy can also help you secure lower premiums that remain fixed as you age.
Myth 2: I'm a Stay-at-Home Parent
Even if you don't have traditional employment, it's important to look at the value you provide to your family. Childcare alone is a significant expense in households with two working members. Add in cooking, cleaning, transportation to school and extracurriculars, and the cost of replacing your contributions is often staggering.
These are all things that will have to be taken care of when you're gone. Think also about the state of mind your partner is likely to be in after your unexpected parting. Having a reasonable amount of coverage will give them the time to grieve without having to worry about financial considerations.
You don't even have to get your own policy. Many insurers offer joint life policies that cover both you and your spouse. This allows you to consolidate your monthly payment into one low amount.
Did You Know? In 2025, the estimated annual value of unpaid caregiving work done by stay-at-home parents in Canada exceeds $60,000. Insuring that value is critical.
Myth 3: My Employer Provides a Policy
This seems like a reasonable protest on its face. Many full-time employees are able to purchase a discounted life insurance policy from their employer. The problem comes in if you leave your current employer or are fired.
Most policies only cover you while you are employed with that company. If you are unexpectedly laid off or fired you may find yourself instantly without coverage. Even worse, you will likely be in a different expense category the later in your life you apply for coverage.
Having your own personal policy to supplement an employer's is a great way to lock in low rates for the long term. It gives you the peace of mind that comes from knowing you are covered no matter how your employment situation changes.
Pro Tip: Consider "portable group life insurance" options offered by some providers—these allow you to keep your coverage even after you leave your job.
Myth 4: Two Times My Annual Income is Enough
Life insurance policies from employers are commonly offered as multipliers of annual income. The most basic policy usually starts at twice your annual income, but unfortunately, this is not nearly enough.
When deciding how much coverage to purchase you should look at all the major expenses you expect for your family. If you have children, absolutely get coverage that will allow them to pay for post-secondary education.
If you own your home, how much do you owe on your mortgage? Could one person's income cover expenses and still make monthly payments?
Two years of income isn't even close to enough to cover these serious and necessary expenses. Sit down and add up your annual expenses plus the balance of your mortgage, your children's projected college expenses, and then add on a reasonable percentage for emergencies. Make sure your family can survive and thrive even after you are gone.
Financial Planning Insight: Most Canadian financial advisors now recommend a minimum of 10 to 15 times your annual income in life insurance coverage if you have dependents.
Myth 5: Things are Tight, I Can't Afford Life Insurance
Many people believe life insurance policies are far more expensive than they actually are. The truth is that term life insurance plans are within reach of nearly every Canadian.
The average cost of a $1,000,000 term life policy for a non-smoking 35-year-old is only about $36 a month. That's less than most people spend on television subscriptions or coffee every month.
Adding in such a small expense buys you a lifetime of relief. Knowing that if something were to happen to you, the people you care about most would be taken care of.
The real truth is that you can't afford not to buy life insurance—especially with new affordable digital policies available in 2025 that often require no medical exam.
Myth 6: I'm Not Healthy Enough to Get Life Insurance
This is one of the most common reasons people give when explaining why they don't have life insurance. “I'm overweight, I smoke, I drink too much.” While these considerations will likely raise your rates, you probably won't be denied coverage.
Unless you have a preexisting condition that is highly likely to result in your demise, it is usually possible to get coverage. Insurance companies generally base their policy offers on age, health, occupational hazards, and lifestyle.
The conditions most people are worried about include diabetes, obesity, heart disease, high blood pressure, and depression. So long as you work with your agent and are upfront about everything, it's often possible to get coverage.
New in 2025: Some insurers now offer "improve-your-rate" programs that allow policyholders to reduce premiums after quitting smoking or demonstrating health improvements.
Myth 7: Life Insurance Only Matters After Death
This used to be true, but in 2025, many policies now include living benefits:
- Accelerated death benefits for terminal illness
- Critical illness riders that provide a lump-sum payment if you're diagnosed with a condition like cancer or stroke
- Disability riders to maintain coverage even if you can’t work
- Cash value in permanent policies you can borrow against in retirement
With these features, life insurance becomes more than just protection—it becomes a versatile financial tool for your whole life.
How to Start in 2025
- Evaluate your needs. Use online calculators: 10-15× income if young with dependents; 5-7× income for older adults.
- Get multiple quotes. Compare term, ROP, whole, and universal products.
- Consult a licensed expert. A broker or independent adviser guides you through complex products and riders.
- Apply digitally. Enjoy faster approvals, medical-exam-free options, and totally online processes.
- Understand your policy. Know the details—what's covered and what's not, and how renewals work.
- Reassess every 3–5 years. Life changes—so should your coverage.
FAQs About Life Insurance
Still unsure about how life insurance works or whether it’s right for you? Here are answers to some of the most common questions Canadians are asking.
One of the most common misconceptions is that life insurance is only for older people or those with dependents. In reality, buying life insurance early—while you're young and healthy—can lock in low premiums and ensure long-term coverage even if your health changes later.
It depends on your needs. Term life is more affordable and ideal for temporary needs like income replacement or mortgage protection. Whole life insurance offers lifetime coverage with cash value but comes at a higher cost. Canadians often start with term coverage and later convert to whole life as their financial goals evolve.
Yes, many Canadians with conditions like diabetes, high blood pressure, or depression can still qualify for life insurance—though premiums may be higher. Some insurers also offer no-medical or simplified-issue policies for those with moderate health risks.
Usually not. Group policies often provide only 1–2 times your salary and are lost if you change jobs. It's smart to have your own individual policy to ensure stable, long-term protection regardless of your employment status.
A good rule of thumb is to aim for 10 to 15 times your annual income if you have dependents. Factor in your mortgage, education costs for your children, and any outstanding debts to calculate a more accurate amount.
Planning Today Prevents Hardship Tomorrow
Now that we've debunked some of these life insurance myths and you know the most important life insurance facts you can see the benefits of getting coverage. Purchasing life insurance is one of the best things you can do to ensure your families future security and prosperity. Never assume that you'll always be there to take care of them.
In 2025, with the rise of digital applications, flexible coverage options, and increased access to no-exam policies, there has never been a better time to act.
To learn more about your life insurance options or to get a quote for a policy, contact us today.
