How Much Life Insurance Do You Actually Need in Canada?

The Simple Formula

A solid life insurance calculation covers four things:

• 1Income replacement — How many years does your family need your income to keep their lifestyle? Typically 7–10 years.
• 2Debt payoff — Your mortgage balance, car loans, lines of credit. Your family shouldn't have to sell the house.
• 3Education fund — Post-secondary costs in Canada now average $20,000–$30,000 per year per child.
• 4Final expenses — Funeral costs, estate administration, and any taxes owing typically run $15,000–$25,000.

A Real Example

Take a 38-year-old in Ontario earning $90,000/year with a $400,000 mortgage and two kids, ages 6 and 9.

A $500,000 policy would leave this family $650,000 short. That's the gap most people don't see until it's too late.

What Affects Your Premiums?

Once you know how much coverage you need, the next question is cost. Your monthly premium depends on:

• Age — Premiums increase roughly 8–10% for every year you wait.
• Health — Pre-existing conditions can raise rates or require a medical exam.
• Smoking status — Smokers typically pay 2–3x more than non-smokers.
• Policy length — A 20-year term costs more per month than a 10-year term.
• Coverage amount — More coverage = higher premium, but the relationship isn't linear.

Don't Guess — Calculate

Our free calculator takes your income, debts, family situation, and existing coverage into account to give you a personalized number — not a rough guess. It takes two minutes.