The Best Life Insurance Options for Seniors

For many Canadian seniors, life insurance may seem unnecessary once financial freedom is in sight. Maybe the house is mostly paid off, the kids are grown, and your pension is steady — so what’s the point?

Here’s the truth: life insurance isn’t just about replacing income. It’s about peace of mind, protecting the estate you’ve built, and easing the financial load on loved ones. The right policy can cover final expenses, safeguard assets, and even create a meaningful gift for children, grandchildren, or charities.

Moreover, while some seniors already have a policy, they may not review it often. Fewer than 40 per cent of Canadians revisit their coverage each year, leaving many with outdated policies that no longer fit their current lives.

This guide breaks down the best life insurance options for seniors in Canada — from simple plans for final expenses to policies that help pass wealth to the next generation.

Key takeaways

• Life insurance can help seniors cover end-of-life costs, protect retirement income, preserve estates, and leave a legacy.

• Seniors have several options, including term, permanent, and guaranteed acceptance policies, each with pros and cons.

• The right policy depends on your needs, health, and goals, so compare carefully and work with a trusted advisor.

• Read the policy’s fine print to avoid surprises and ensure it truly fits your long-term goals.

Why life insurance matters for seniors

Life insurance isn’t just a “young person’s product.” Whatever your age and stage, the right policy can be a smart financial tool for protecting your family, assets, and peace of mind.

Estate planning

Settling an estate isn’t free. Taxes, fees, debts, and other costs must be paid before assets are passed on to beneficiaries. Without life insurance, your loved ones may need to dip into the very assets you hoped to preserve — like the family home, cottage, investments, or savings — long before anyone is ready.

Life insurance provides cash to cover those costs, keeping your estate intact. Since death benefits are tax-free in Canada, your beneficiaries receive the full payout.

Read more: What Is Estate Planning?

Cover end-of-life expenses

Think the cost of living is high? The cost of dying isn’t cheap. Funerals in Canada can cost between $5,000 and $10,000+, cremations up to $5,000, and in some city cemeteries, a single burial plot can exceed $25,000. Without insurance, families may have to find the money to cover the costs. A policy ensures loved ones can focus on saying goodbye, not the bills.

Protect retirement income

Losing a spouse brings more than grief — it can also mean a sudden drop in income. Pensions and survivor benefits often shrink, leaving the surviving partner to cover expenses or maintain the lifestyle you built together.

The impact can be especially tough before age 65. In 2021, widows under 55 saw an average after-tax family income drop by more than $15,000 in a year, and the share living in low-income households nearly tripled, from 7.7 per cent to 21.9 per cent. Life insurance can help buffer that financial blow, giving the surviving partner a tax-free payout to ease their money worries.

Leave a legacy

What’s the best gift you can leave your family? Financial security. Life insurance provides a tax-free benefit that goes directly to children, grandchildren, or loved ones, which can help fund tuition, contribute to a first home, or simply provide a cash cushion for the future.

Covering taxes on assets

Cottages, investment properties, and non-registered investments can trigger hefty capital gains taxes. Insurance creates funds to pay those taxes, helping keep assets in the family.

Opens the door to charitable giving

Your generosity doesn’t have to stop when you do. By naming a charity as a beneficiary, you can create a tax-free gift that bypasses probate and delivers immediate impact.  Depending on the policy’s structure, you may also benefit from tax credits.

Types of life insurance for seniors

From short-term protection to lifelong plans that double as financial tools, there are a range of options designed to fit different needs. Let’s break them down.

Read more: The Types of Life Insurance Explained

Term life insurance

Straightforward and affordable, term life covers you for a fixed period (like 10, 20, or 30 years) or until a certain age (such as 65).  If you pass away during that term, your beneficiaries receive a lump-sum, tax-free death benefit. Coverage ends when the term expires, unless you renew or convert it to permanent insurance.

It’s a good fit for healthy older Canadians who need temporary protection, like paying off a mortgage or supporting a spouse until retirement. Premiums stay the same for the entire term, but they can increase upon renewal. RBC’s Term Life Insurance offers flexible terms that range from 10 to 40 years, and you can convert it to permanent coverage later — protection that can grow with you.

Best for: Healthy seniors with temporary needs who want flexibility to convert later.

Permanent life insurance

Think of this as the “locked-in-for-life” plan. Permanent life insurance never expires, as long as premiums are maintained, and often builds cash value that you can tap into while you’re alive. There are two main types:

• Whole life insurance is steady and reliable. Your premiums stay the same for life, coverage never ends, and the policy often builds a guaranteed minimum cash value over time. Some plans also invest part of your premiums and may pay out dividends. With RBC’s Participating Whole Life Insurance, you can access your policy’s funds while you’re alive, and coverage is available up to age 80.

• Universal life insurance does double duty: it combines lifetime coverage with an investment component. Part of your premium pays for insurance, while the rest goes into funds you choose. That money grows inside the policy, often with tax advantages. RBC’s Universal Life Insurance lets you adjust payments, pick investments, and access the cash value if needed. Coverage is available up to age 85.

Best for: Seniors who want lifelong coverage plus the potential to grow wealth and preserve their estate.

Guaranteed acceptance life insurance

Not in perfect health? No problem. Guaranteed acceptance life insurance makes it easy to get coverage with no medical exam or health questions. With RBC’s Guaranteed Acceptance Life Insurance, Canadians aged 40 to 75 are automatically approved for up to $40,000 in coverage.  Premiums never go up, and coverage lasts a lifetime.

Best for: Seniors in poor health who want hassle-free, lifetime protection for final expenses.

Funeral insurance

Funeral insurance (also called burial or final expense insurance) provides a smaller payout specifically for end-of-life costs. A medical exam isn’t typically required, coverage lasts a lifetime, and claims are often paid quickly.

Read more: Are Your Parents’ Final Expenses Covered?

How much does life insurance for seniors cost?

It depends! Premiums tend to rise with age, but the exact cost depends on factors like age, lifestyle, coverage amount, policy type, and overall health. Pre-existing conditions (like high blood pressure, diabetes, or cancer history) can increase the cost, and smoking is a surefire way to push rates even higher.  There’s no “one-size-fits-all” policy.

Get a term life insurance quote online to see what a policy might cost you.

Read more: Applying For Life Insurance: Why You Should Be An Open Book

How to choose the best life insurance policy for seniors

Life insurance is a major financial decision, and with so many options out there, it can feel overwhelming. Here’s how to focus on what matters and find the right fit:

1. Assess your needs

Calculate what you’d like the policy to cover. Funeral costs? Outstanding debts? Charitable gifts? This gives you a realistic idea of how much coverage you need. Our life insurance calculator can help you estimate in minutes.

2. Evaluate your health

If you’re in good health, you may qualify for term or permanent life insurance. If not, consider guaranteed acceptance policies that don’t require a medical exam.

3. Work with a professional

The right advisor can make all the difference. Look for someone who understands your needs, priorities, and budget, and can explain options clearly. RBC’s licensed insurance advisors can help you find the right policy and guide you every step of the way.

4. Compare policies

Compare quotes carefully, looking at the type of coverage, long-term costs, and included features. Don’t just chase the lowest price — cheaper isn’t always better if it leaves gaps in coverage! Make sure the policy will serve you years from now, not just today. RBC’s life insurance comparison tool makes it easy to review plans side by side.

5. Understand the policy

Once you’ve chosen, dig into the details of that specific policy. Read the fine print, check for exclusions or waiting periods, and confirm which benefits and rates are guaranteed. Ask how the policy might change over time so there are no surprises later.

Secure peace of mind in your retirement

Life insurance isn’t just about numbers — it’s about knowing your loved ones will be taken care of when you’re gone. The right policy can cover end-of-life, provide financial support for dependents, or even help you leave a legacy. For seniors, premiums may be higher, but coverage is available. By assessing your needs, considering your health, comparing policies, and working with a trusted advisor, you can find an option that fits your budget and goals.

FAQs about life insurance for seniors

Do seniors need life insurance?

Not every senior does, but many find it valuable. Life insurance can cover final expenses, pay off debts, or leave a financial legacy. If you have dependents or want to ease the financial burden on loved ones, a policy can help with that.

Can seniors get life insurance without a medical exam?

Yes. Many insurers, including RBC Insurance, offer guaranteed acceptance policies that don’t require a medical exam or health questionnaire. These are designed to make coverage more accessible for older applicants or those with health concerns. RBC Insurance offers guaranteed acceptance coverage with automatic approval for ages 40 to 75.

Can you get life insurance after 70?

Absolutely! RBC Insurance, for example, offers life insurance options for Canadians up to age 85. Premiums may be higher, but coverage is available.

Share This Article