These three quick steps will help you estimate how much life insurance coverage you may need.
1. Estimate what death benefit your family will need
What are you hoping your insurance will cover? For example, some people just want enough to cover their funeral costs and final taxes. Other people want enough to pay off their mortgage. Or, to cover long-term needs like retirement or their children's education.
Others want to provide enough money so that their family can live off the investment return alone, without having to spend any of the capital. If this is you, you will need to leave a much higher death benefit. You may want to talk to an insurance expert or financial planner about how this will fit into your other financial plans.
Tip: Many insurance companies offer online calculators that will help you assess how much life insurance coverage you will need. Here are some other online calculators you can try:
Keep in mind that the calculators do not take into account any government benefits, such as death benefits provided through the Canada Pension Plan.
2. Decide what type of life insurance you want
Some people buy both types. To provide money for your family in case you die, you might choose either term life insurance or permanent life insurance. To use insurance to save for the future, you can look into permanent life insurance.
3. Get a quote
Once you know how much coverage you need, you can get quotes from different insurance companies. Don't forget that with life insurance, the more coverage you get (the higher the death benefit), the more you pay.
Tip: You can get quotes by:
Searching for quotes on the websites of various life insurance companies
Contacting an insurance agent or insurance broker
Comparing prices at
Remember: The more coverage you want, the more you pay
If you only have a certain amount of money to spend on insurance, you may have to make some tough choices. Many people need to get expert advice to avoid making mistakes.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.