How Much Life Insurance Do You Need?

A rule of thumb is 5-10x gross annual income. More precise calculation: (final expenses + debts + income replacement for dependents - existing savings). For a $75,000-income earner with spouse, 2 kids, and $400,000 mortgage, recommended coverage is $800,000-1,000,000.

Types of Life Insurance in Canada

• Term insurance: 10-30 year term, $20-60/month per $500,000 coverage, pure protection
• Whole life: Permanent, includes investment component, $100-300/month per $500,000
• Universal life: Flexible, adjustable premiums, $60-150/month per $500,000

Factors Affecting Life Insurance Rates

Rates depend on: age (20-year-old pays 1/4 the cost of 50-year-old), health status, smoking (smokers pay 2-3x more), occupation risk, and coverage amount. Getting coverage before age 50 is critical — costs jump significantly after.