How Much Life Insurance Do I Need in Canada?

The Question Every Canadian Asks

One of the most common questions we hear at PureTerm is: "How much life insurance do I actually need?" It's a great question — and the answer depends on your income, debts, family situation, and long-term goals.

The good news is there's a simple starting point that works for most Canadians.

The 10x Rule: A Reliable Starting Point

A common rule of thumb is to get coverage equal to 10 times your annual income. This is typically enough to cover your mortgage, outstanding debts, final expenses, and provide some income replacement for your family.

For example, if you earn $80,000 per year, a $800,000 term life policy is a reasonable starting point. But your situation may call for more or less depending on several factors.

What to Factor Into Your Coverage Amount

Here's what you should account for when calculating how much life insurance you need in Canada:

• Mortgage balance: The full remaining balance of your home loan

• Other debts: Car loans, lines of credit, student loans

• Income replacement: How many years your family would need support

• Dependents: Children, a non-working spouse, or aging parents

• Final expenses: Funeral costs, estate fees, and taxes

• Education costs: If you want to cover your children's post-secondary education

Term Length: How Long Do You Need Coverage?

Most Canadians choose between 10, 20, or 30-year term policies. A 20-year term is the most popular choice for families — it covers the years when your mortgage is active and your children are still dependents.

If you're in your 30s with young kids and a mortgage, a 20 or 30-year term makes the most sense. If you're older and your mortgage is nearly paid off, a 10-year term may be sufficient.

Use Our Free Coverage Calculator

Rather than guessing, PureTerm's free coverage calculator walks you through your specific situation in under two minutes. It factors in your income, debts, family size, and goals to give you a personalized coverage range — not just a generic number.

Once you have your estimate, a licensed Canadian broker will review it with you and shop 15+ insurers to find the best rate available.