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Life insurance in Edmonton: the basics.

It’s true that your age and health status have the most impact on how much life insurance companies will charge you for coverage. But could the city you live in impact how much you pay in premiums?

It definitely can — albeit in a few less-than-obvious ways.

If you have a mortgage and a family, you need life insurance. That’s because life insurance (more specifically, your death benefit) provides a tax-free lump-sum payment to your surviving family (also known as your beneficiaries).

They can use this money for whatever they want. 

When you’re figuring out how much life insurance you need, you’re going to need to take a bunch of things into account including the amount of debt you have, the cost of living in your city, and whether you want to leave some money to your family (or to a charity). 

All of those factors can vary based on the city you call home.

This page will take a look at the finances of the average person living in Edmonton so that you can get a better sense of how much life insurance you might need and how much it could cost.

Understanding the basics of life insurance will prepare you to get a quote, but you might still feel like you need to talk to a broker.

No worries.

When you apply for a quote on LowestRates.ca, we’ll show you quotes from more than 20 life insurance companies. After that, we’ll refer you to a broker who can help you get a policy that works for you.

Your questions about life insurance in Edmonton, answered.

What factors affect life insurance premiums in Edmonton?

There are a few factors unique to Edmonton that could indirectly affect your life insurance premium (how much you pay each month, in other words).

Your income: You want a large enough life insurance policy so your beneficiaries can continue living life the way they’re used to, even though they no longer have your income to rely on.

The rule of thumb in life insurance is to get a policy that's worth ten times your annual income.

According to Statistics Canada, the median total income for a family in Edmonton was $110,610 in 2017.

The size of your mortgage: If you purchased a house with someone else, getting life insurance is crucial. If you die suddenly, you need a large enough death benefit so your co-owner can continue making mortgage payments.

Before you’re approved you for a life policy, the insurance company will ask you to do a deep-dive into your finances. It’s called a financial needs analysis, and you’ll need to disclose the size of your mortgage to the life insurance company.

For reference, the average price of a home in Edmonton in 2019 was $367,339, according to the Canadian Realtors Association. Single-family homes sold for an average of $434,634 and condos sold for an average of $234,480.

Your household debt: When you die, any outstanding debt does not automatically become your spouse’s burden to pay back. Your debts die with you, for the most part.

However, there are exceptions. If your spouse co-signed a loan with you, and there’s a balance remaining when you die, your spouse will be responsible for paying it off, which can be a challenge since they don’t have your income to rely on.

Also, if you took out an unsecured personal loan and had a cosigner, your lender could try to access your joint assets (the assets you share with your partner).

It’s important that your death benefit is large enough death benefit so that your spouse can pay for any unexpected expenses, including legal fees.

According to the Candian Mortgage Housing Corporation, the debt-to-income ratio for Edmontonians in the second quarter of 2018 was 162%. That means for every dollar earned, Edmontonians owed $1.62.

Your monthly living expenses: Life insurance companies also factor in your living expenses. The cost of living in Alberta is manageable compared to other provinces (namely Ontario and B.C.).

Living in Edmonton means you also pay 0% provincial sales tax. There’s still a federal sales tax to pay on goods and services — 5% — but Alberta still has the lowest sales tax of all the provinces.

In 2015, the Edmonton Social Planning Council estimated that a family of four would spend $5,687.94 a month on major family expenses.

What type of policy do you need if you live in Edmonton?

There are two types of life insurance: term policies and permanent policies. 

Don't base your decision about which one to buy on where you live. Your personal goals should be the deciding factor. 

Term life insurance

Term life insurance provides coverage for a set amount of years. Term insurance is sold in denominations of years, which include:

  • Term 10
  • Term 15
  • Term 20
  • Term 30
  • Term to 65
  • Term to 70
  • Term to 75

With term insurance, you end up paying more as you age (when the term expires and you have to renew).

Permanent life insurance

Permanent life insurance is purchased once; it never needs to be renewed. The premiums stay the same. It is generally more expensive than term life insurance.

There are also two subsets of permanent insurance.

Whole life: 

Whole life insurance offers steady premiums, an investment portion that is managed by the insurer itself, and the death benefit never changes. You can fast-track your payments to pay off your insurance policy faster (it’s similar to a mortgage).

Universal life:

With universal life insurance, you can actually negotiate how much you pay in premiums. If you need your premiums decreased for a little while, you have the option — however, the insurer will shrink your death benefit to make up the difference. Universal life insurance also has an investment component, but you have the flexibility of managing it yourself.

Term 100:

While its name might lead you to believe otherwise term 100 insurance is actually one kind of permanent insurance policy.

When you purchase term 100 life insurance your coverage is permanent, and you must pay premiums until you turn 100.

This kind of policy is usually less expensive than universal or whole life insurance but is more expensive than term insurance.

Term 100 insurance is right for people who want their coverage to last as long as they are alive but do not want to pay as much as they normally would with other permanent life insurance products.

Other things that affect your life insurance premium in Edmonton.

Your individual financial profile and goals — which, as we’ve explained, can be influenced by where you live — will contribute to how much life insurance you need and also the type of policy you decide is best for your needs. Both these decisions play a part in determining your premium. But with life insurance, the factors that influence your premium the most are your health, your age, and your lifestyle — it’s an inescapable fact.

  • Age: The older you are, the more costly life insurance becomes. When you buy life insurance in mid-life, for example, insurance companies assume they’ll have to pay out a death benefit sooner than they would with a client in their twenties or thirties. Waiting to buy life insurance raises your premium, period.
  • Gender: Women often pay cheaper premiums than men because they have a longer life expectancy, according to actuarial statistics.
  • Weight: Being overweight or obese is considered a risk factor for other illnesses.
  • Smoking: Being a smoker is linked to cancer.
  • Alcohol: Insurers penalize heavy drinkers with higher premiums, as frequent drinking increases your likelihood of developing a number of illnesses or dying prematurely.
  • Pre-existing conditions: If you have a pre-existing health issue you will be charged more for life insurance. This includes mental health diagnoses, even common ones like anxiety and depression.
  • Family history: If your immediate family has a history of chronic illness, you may pay more for insurance, as your risk of developing the same condition is heightened.

How much does life insurance cost in Edmonton?

Here’s an estimation of how much life insurance could cost in Alberta. Apply for a personalized quote to get a better idea of how much you’d pay.

Male, 30, non-smoker

Location: Alberta

Coverage amount: $400,000

Term 30: $40 - $830 / month

Whole life: $200 - $340 / month

Female, 30, non-smoker

Location: Alberta

Coverage amount: $400,000

Term 30: $30 - $70 / month

Whole life: $195 - $330 / month

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