Important information:A potential Canada Post service disruption could take place within the coming weeks.
Important Information: A potential Canada Post service disruption could take place within the coming weeks.
In the event of a widespread postal disruption, you may not receive your insurance documents or be able to mail premium payments or documents to us. You are still responsible for making your insurance premium payments by your due date to maintain your insurance coverage.
Tailored benefits for today’s workforce: What employers can’t afford to overlook
TORONTO, May 20, 2025 — As the workforce continues to diversify and evolve, tailored benefit plans are key to healthier, more resilient teams. Yet new survey data from RBC Insurance highlights how coverage gaps—driven by accessibility, affordability, and awareness—are impacting employee well-being, particularly for women, individuals managing chronic conditions, and younger generations entering the workforce.
Three-quarters (75%) of women say they want or need benefits that specifically support women’s health.
Those managing chronic physical (31%), developmental (31%), or mental health-related disabilities (28%) report that coverage amounts are often insufficient to cover their needs, resulting in out-of-pocket costs higher than they can justify.
One in five (20%) working Canadians aged 18-34 are unsure of the employee benefits coverage available to them.
“These findings are a call to action for employers and benefits providers alike, as there’s a real opportunity to close the gap between what employees need and what they receive,” says Tony Bruin, Head of Group Benefits at RBC Insurance. “The more an employer tailors and prioritizes more inclusive and relevant benefit solutions, the more they can truly support their employees.”
At a time when costs are rising for employees and employers, companies can start optimizing their group benefits by looking closely at their specific workforce characteristics and tailoring plans to ensure equitable and inclusive coverage.
Addressing the coverage needs of women
Despite making up nearly half of the workforce in Canada, women’s needs are misaligned when it comes to employer group benefits. Seventy-five per cent of women say they want or need benefits that specifically support women’s health, including services for fertility and menopause. In addition, women are more likely than men to report:
Insufficient coverage amounts prevent them from accessing the care they need (31% versus 22%)
Difficulty securing appointments (25% versus 17%)
Rising costs and affordability (68% versus 49%) or mental health issues like anxiety or depression (33% versus 17%) as barriers to improving their well-being
Chronic conditions and the cost of care
More than half (54%) of employees or their spouses are living with a chronic condition, making access to care a critical component of overall well-being. However, the survey revealed that rising costs and affordability continue to be a major barrier, preventing individuals from fully utilizing their benefits or seeking the care they need.
Six in ten (58%) Canadians cite affordability as a key factor impacting their well-being, and those with chronic conditions are more likely than other groups to identify rising costs and affordability issues.
Those managing physical (31%), developmental (31%), or mental health-related disabilities (28%) report that coverage amounts are often insufficient, resulting in out-of-pocket costs higher than they can justify.
Younger workers face gaps in relevance and awareness
Many in the Gen Z and Millennial generations, aged 18-34, feel that the coverage amounts offered by group benefits are insufficient and do not adequately meet their needs. While they are the most interested in making lifestyle changes to enhance their financial health, manage stress, and achieve work-life balance, many report barriers such as affordability (59%), lack of motivation (44%), and busy schedules (40%).
In addition, there is a lack of awareness about coverage, with 20% of 18-34-year-olds unsure of their benefits, compared to just 13% of those aged 35-54 and 12% of those aged 55+. To better support a younger workforce, employers can consider enhancing the relevance and communication of their benefit offerings.
“As the workforce becomes more diverse across age, gender, and health needs, employers and group benefits providers have an opportunity to reimagine what modern support looks like,” says Bruin. “When employers focus on investing in more inclusive, tailored benefits, they can boost employee satisfaction while building healthier, more engaged teams.”
About the RBC Insurance Survey These are some of the findings from an Ipsos poll conducted on behalf of RBC Insurance. For this survey, a sample of 1,000 working Canadians ages 18-65 were surveyed online via the Ipsos I-Say panel between January 29-31, 2025. The precision of online polls is measured using a credibility interval. In this case, the results are accurate to within ± 3.8 percentage points, 19 times out of 20, of what the results would have been had the entire population of working adults aged 18-65 in Canada been surveyed. Credibility intervals will be wider for smaller subsets of the population.
About RBC Insurance RBC Insurance® offers a wide range of life, health, home, auto, travel, wealth, group benefits, annuities and reinsurance advice and solutions, as well as creditor and business insurance services to individual, business and group clients. RBC Insurance is the brand name for the insurance operating entities of Royal Bank of Canada, Canada’s biggest bank and one of the largest in the world, based on market capitalization. RBC Insurance is among the largest Canadian bank-owned insurance organizations, with 2,700 employees who serve nearly 5 million clients globally. For more information, please visit rbcinsurance.com.
If you were suddenly faced with a serious injury or illness, would you be able to care for and support yourself and your family? That’s the question we all need to answer when considering critical illness insurance and disability insurance.
Having the right coverage can mean a world of difference. It could be the factor that tips the balance between financial stability and all-consuming worry during an already-stressful time.
But what exactly are the differences between critical illness insurance and disability insurance? Is one better than the other, or are both necessary? This quick primer can help you understand the unique benefits of each type of policy and when one or both will best suit your needs.
Key takeaways
Critical illness insurance provides a one-time lump-sum benefit if you’re diagnosed with a serious health condition, such as life-threatening cancer, a heart attack, or a stroke.
Disability insurance helps with monthly income replacement if you can’t work for a period of time due to injury or illness.
Though critical illness insurance and disability insurance may overlap with coverage in some cases, they tend to provide protection for different illnesses and scenarios. They also have distinct exclusions and waiting periods.
Depending on your individual situation, one or both types of insurance might provide the best coverage for you and your family.
Understanding critical illness insurance
What is it?
Imagine you’re diagnosed with a serious illness, such as life-threatening cancer or experience a heart attack or a stroke. You may require specialized treatments, time off work, accommodations in your home, or help with self-care. These new needs may place a hefty financial burden on you and your family when you’re trying to recover.
While other health insurance policies may cover some of your medical expenses or help with income replacement, critical illness insurance directly pays out a one-time, tax-free lump sum. It’s designed to alleviate the financial stress associated with severe illness. And you can use the benefit however you want, such as paying for medications or treatments not covered by your other insurance, continuing to contribute to your retirement savings while you’re off work, upgrading your house or vehicle to suit your new needs, paying for childcare, or even taking a vacation to recharge. Critical illness insurance acts as a safety net and gives you flexibility during a challenging time.
Types of illnesses covered
The illnesses protected by your critical illness insurance will depend on the insurer and the plan you purchase. Typically, these conditions are commonly covered:
Life-threatening cancer
Heart attack
Stroke
Kidney failure
Major organ transplant
Coronary artery bypass surgery
Multiple sclerosis
More comprehensive plans may also provide coverage for conditions such as dementia, including Alzheimer’s disease, Parkinson’s disease, blindness, deafness, and even severe burns, paralysis, and loss of limbs. Before purchasing a policy, make sure you understand which illnesses are covered by the plan and any exclusions or limitations (such as waiting periods or survival periods before you’re eligible to claim your benefit).
Exclusions
Many plans will not pay out a lump sum or refund any premiums if you experience an illness, death, or other loss that results directly or indirectly from one of these situations:
Self-inflicted injury, attempted suicide, or suicide.
Intentional use of any drug (not prescribed by a doctor), intoxicant, narcotic, or poisonous substance.
Participation in a war or a hostile action, insurrection, or civil commotion.
Attempt to commit or commission a crime, whether you’re charged or not.
Operation of any land, water, or air conveyance that’s operated by any means other than your own muscle (think cars, motorboats, planes) while you’re under the influence of any drug, intoxicant, narcotic, or poisonous substance, including alcohol. For alcohol, the limit begins when the concentration of alcohol in 100 millilitres of blood exceeds 80 milligrams.
Speak with your insurer to confirm the details of your specific policy.
Understanding disability insurance
What is it?
If an illness or injury keeps you from working, disability insurance will typically pay out a monthly benefit to replace a portion of your lost income (often around 60 per cent to 85 per cent). Whether you experience a short-term disability, such as an injury that requires months of leave, or a long-term disability that means you can’t work for years, disability insurance acts like a consistent paycheque to help you cover your living expenses and medical bills.
Types of disabilities covered
As with critical illness insurance, the types of illnesses and disabilities covered will depend on your insurer and the plan you choose. You may receive protection in the following instances.
Total disability: When you’re unable to perform the essential duties of your occupation due to an illness or injury.
Residual disability: When your illness or disability prevents you from performing some of your essential work duties, resulting in a 20 per cent or more loss in earnings. You will eventually recover.
Partial disability: When you can’t perform any of the essential duties of your regular occupation and you experience a 20 per cent or more loss in earnings. You will eventually be able to go back to work.
Exclusions
Much like critical illness insurance, disability insurance will typically not cover any disability that results, whether directly or indirectly, from these situations:
An act or accident of war.
Normal pregnancy or childbirth (except complications).
Any injury or illness that occurs before your policy comes into effect or while your policy is not in force.
Some plans will also have these exclusions:
Any self-inflicted injury, whether or not it’s intentional, that occurs while you’re intoxicated.
Your use of any drug, unless it’s prescribed or directed by your physician.
Any suicide attempt or other intentionally self-inflicted harm.
Infections related to AIDS and HIV.
Any injury that occurs while you are committing or attempting to commit a crime, even if you’re not charged with that crime.
Subjective conditions, such as fibromyalgia and chronic fatigue syndrome.
Mental and nervous disorders, such as depression, anxiety, stress, and burnout.
Schedule a chat with your insurer if you’re not clear on the exclusions in your policy (or any policy you’re considering buying).
Key differences between critical illness insurance and disability insurance
Before you can decide whether to purchase critical illness insurance, disability insurance, or both, it’s important to understand how each type of coverage works and the ways each can provide you with financial stability during a health crisis. This chart can help you understand the primary differences between critical illness insurance and disability insurance.
Critical illness insurance
Disability insurance
Triggering event
You can make a claim if you’re diagnosed with one of the conditions or illnesses listed in your policy.
Your ability (or inability) to work is not a factor.
You can make a claim for benefits if you cannot complete some or all of the tasks required for your job due to injury or illness.
The focus is on the illness or injury hindering your ability to do your job, rather than the specific diagnosis.
Waiting period
You will often need to live beyond the survival period (a.k.a. a set amount of time beyond your diagnosis, usually 30 days) before you are eligible for benefits.
You will have to wait the elimination period (a set number of days after you receive your diagnosis) before you begin getting payments.
Nature of benefits
You’ll receive a one-time lump sum, which, depending on your plan, can range from $10,000 to $3 million.
Designed to replace a portion of your lost income while you cannot work, this benefit is often paid out each month and lasts for as long as you remain disabled or until the end of your benefit period.
Duration of benefits
In most cases, your policy will end once you receive your one-time lump-sum payment. However, some insurance providers have riders that cover a second critical illness and payment.
You will receive ongoing payments for the duration of your disability, from a few months to many years, up to the limit defined in your policy. Some plans will pay for a disability that lasts until retirement age, while others have a benefit period of two, five, or 10 years.
Use of payout
You can use the lump-sum benefit however you want: to pay medical bills, upgrade your home, contribute to your RRSPs, try alternative treatments, or take a vacation to unwind.
These benefits are designed to cover living expenses while you cannot earn your regular income. While you can use the payments however you want, the amount you receive at one time is smaller and best for maintaining financial stability during a period of low or no income.
Who can apply
Anyone
Employed and self-employed people
Age eligibility
Coverage often ends between the ages of 65 and 75 years; although, some providers offer permanent insurance.
Coverage often ends between the ages of 55 and 69 years.
Premiums
Your premiums are based on the number of illnesses covered, the lump-sum payout amount you choose, your age, how long the coverage will be in place, and your overall health status.
Your premiums will depend on the disability types covered, your monthly benefit amount, how long you will be eligible to receive benefits, and your occupation.
Taxability
Tax-free
It’s tax-free income if you paid for it, and it’s taxable income if your employee paid for insurance for you.
How to best choose between critical illness insurance and disability insurance
Whether disability insurance or critical illness insurance will be right for you will depend on several factors, such as your occupation, financial situation, health risks, and more.
Financial needs and responsibilities: Take a look at your financial obligations, from mortgage payments to support of dependants. Critical illness insurance can help with large immediate expenses. Disability insurance is designed to provide ongoing income.
Health risks: Critical illnesses are common.Each year, around 247,000 Canadians will be diagnosed with cancer, and 108,000 will experience a stroke. Critical illness insurance could be an invaluable safety net if you’re affected by one of these conditions one day. If you have a job that increases your risk of injury or certain illnesses, then disability insurance may be the option for you.
Employment situation: Anyone is eligible for critical illness insurance; whereas, you must be employed or self-employed to purchase disability insurance. If you work for a company or organization, make sure you’re familiar with your employee benefits. For example, you may have comprehensive disability coverage, but no critical illness insurance. In that case, you might want to purchase your own critical illness policy.
Budget: In an ideal world, we’d all have premium disability and critical illness insurance coverage. In the real world, these plans cost money. It’s important to balance your coverage needs with the premiums that you can afford.
Dependants and family responsibilities: You may have a wide variety of people (children, aging parents, or family members with disabilities) and pets relying on your income. Critical illness insurance can provide flexibility with a larger payout if you’re diagnosed with a serious condition, while disability insurance can help to cover your day-to-day expenses.
Is it better to combine both types of insurance?
Even though both are types of health insurance, critical illness insurance provides different benefits than disability insurance. Critical illness insurance is designed to immediately alleviate financial strain if you’re diagnosed with a serious illness or condition. Disability insurance covers a broad range of illness and injuries that can affect your ability to work and helps with day-to-day expenses. You may want to combine both types of insurance if you’re looking for well-rounded coverage that protects you in many circumstances. Speak with an insurance advisor to help you make the decision that best suits your lifestyle. They can help you balance your current and long-term needs, consider your risks and budget, and help you choose the right policies to protect you and your family in all scenarios.
RBC Disability Insurance
Help ensure your expenses are covered if you get sick or injured
*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
TORONTO, January 14, 2025 — Amid a currently challenging economy, Canadians may be feeling some uncertainty about the future. While many are clear that they want to financially protect their families after they’re gone, they also admit they aren’t actively planning to achieve these goals, according to a recent survey by RBC Insurance.
The majority (82%) of Canadians feel it is important to ensure their family receives money quickly to avoid paying out-of-pocket for a funeral or other end-of-life expenses. As many as 76 per cent want to ensure their estate is taxed as little as possible to leave their family a larger inheritance, and 70 per cent want to pass money to their family.
However, just 15 per cent of Canadians have a plan for how their money and belongings will be transferred to loved ones after they’re gone, which only increases to 24 per cent for current retirees. Meanwhile, less than four in ten (38%) retirees have set aside money or have life insurance to pay for final expenses. Retirees are also the least likely to be knowledgeable about various types of insurance policies, overlooking the potential that could help achieve their goals.
“We often hear people say, ‘I had no idea how hard it would be’,” says Selene Soo, Director, Product Management at RBC Insurance, referring to the process of managing a loved one’s assets after they have died. “This is followed quickly by: ‘If I had known, I would have helped to prepare their finances differently.’ It’s hard to hear because we know there are ways to make it easier.”
Open conversations and working with professionals early to develop strategies based on your goals and unique situation can alleviate stress for you and your family later.
Relieve the admin burden for your loved ones.
While over half (53%) of Canadians confess they don’t want to be a burden on their families when they’re gone, many are surprised by the administrative and financial weight of managing a loved one’s estate. Talking with your family and experts in advance can help them navigate complex paperwork, such as closing off bank accounts, paying debts, filing a last income tax return and maintaining property or other assets until they can be sold.
Ensure money is available as soon as your family needs it.
If not properly planned for, end-of-life costs may leave your family paying out-of-pocket. While money may be available, it is often tied up in probate – a legal process that can take several months or more than a year, while a court decides what happens to your financial assets and debts after you’re gone and who is authorized to act on your behalf. Insurance products like life insurance and segregated funds automatically bypass probate if you name a beneficiary. This means your loved ones will receive any inheritance quickly, so they can be ready for financial surprises that may come their way. It also means you can minimize potential probate-related fees, making sure more money gets to your loved ones.
Stay in control of who receives your money.
Help your family avoid uncertainty and waiting periods by naming beneficiaries – the people who will receive the benefits of your policy or account when you die. This is especially helpful if you have complex family dynamics, own a business or if there is no written will. Identified beneficiaries receive money quickly and directly, avoiding the risk of needing to pay off debts first.
Regardless of your age or wealth, creating a plan with the help of loved ones and professionals will ensure that your finances are properly structured to achieve your legacy goals. As you consider your unique needs, talk to an advisor to simplify the experience and help your family when you’re gone. For more information, visit What Is Estate Planning? | RBC Insurance.
About the RBC Insurance Survey These are some of the findings from an Ipsos poll conducted on behalf of RBC Insurance. For this survey, a sample of 1,250 Canadians aged 18+ was surveyed between July 26 to 29, 2024. Included within this sample is an oversample of 250 Canadians aged 45-75 years old with a reported household income of $150k+. The precision of online polls is measured using credibility interval. In this case, the results are accurate to within +/- 3.4 percentage points, 19 times out of 20, of what the results would have been had the entire population of Canadians 18+ been surveyed. Credibility intervals will be wider for smaller subsets of the population.
About RBC Insurance RBC Insurance® offers a wide range of life, health, home, auto, travel, wealth, group benefits, annuities and reinsurance advice and solutions, as well as creditor and business insurance services to individual, business and group clients. RBC Insurance is the brand name for the insurance operating entities of Royal Bank of Canada, Canada’s biggest bank and one of the largest in the world, based on market capitalization. RBC Insurance is among the largest Canadian bank-owned insurance organizations, with 2,600 employees who serve 4.8 million clients globally.
*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
Term life insurance provides protection that is cost-effective and easy to understand. As part of a complete and thorough financial plan, term life insurance ensures that your family can rely on your insurance plan’s financial security if something happens to you.
Key takeaways
Term life insurance is a type of coverage with a limited term, typically 10 to 40 years.
Term life insurance is an affordable and accessible kind of protection that often costs less than a whole life insurance plan and does not usually require a medical exam (depending on your age and the amount you’re applying for).
Often, term life insurance plans can be renewed (at a higher premium) for as long as you require coverage, or they can be converted into permanent life insurance.
Term life insurance policies do not have a cash value or pay dividends on invested premiums.
What is term life insurance?
Term life insurance offers coverage for a specific amount of time (a “term”), often between 10 and 40 years. It’s available to people between the ages of 18 and 70 years and is an affordable and easy-to-understand kind of insurance plan. With term life insurance, you pay a monthly or annual premium for your chosen term. Should you you pass away during the term, your beneficiary will receive a death benefit payout.
When your term ends, your coverage will be automatically renewed at a higher premium until you cancel the policy. Once you cancel your policy, your beneficiaries are no longer eligible to receive the death benefit.
Because each individual is unique, term life insurance can be customized to best suit your coverage needs. The cost is based on factors including your age, sex, health, lifestyle, smoking status, the coverage amount, and the length of the term you select. Often, term life insurance will not require you to undergo a medical exam to qualify for a policy, depending on your age and the policy amount you’re applying for.
How does term life insurance work?
Term life insurance works by purchasing a policy for a set term—such as 10, 20, or 30 years— that gives you coverage ranging from $50,000 to $25 million, depending on your needs and your budget. You pay monthly or yearly premiums, and as long as you continue to pay those, your coverage will remain in place during that period. Should you die during your term, a death benefit will be paid out to your named beneficiary/beneficiaries. If no beneficiary/beneficiaries are named on your policy, the death benefit will become part of your estate.
At the end of your term, your policy will be renewed (at a higher cost due to your increase in age), but you may have the option to convert all or part of your term life insurance policy into whole life insurance. It’s wise to speak with a licensed life insurance advisor to understand what policy options best meet your needs.
When does term life insurance coverage end?
Your term life insurance coverage can end:
On the date of your death.
On the day you submit a request, in writing, to cancel your policy.
On the day you stop paying your premiums.
How much does term life insurance cost?
The cost of term life insurance is unique to each individual. Factors such as your age, sex, health and lifestyle, smoking status, chosen term length, and the amount you choose to be insured for all contribute to determining the cost of your policy. You can customize your plan to fit your specific needs. For example, you may choose to be covered until your children reach adulthood, or you might purchase coverage for as long as you plan to be paying off your mortgage. Once you’ve decided on a plan, your monthly or annual payments, depending on your insurer, will remain the same over the course of your term. Upon renewal, payments increase, according to your age, and are then once again guaranteed for the length of the new term.
How is term life insurance different from permanent life insurance?
Term life insurance offers flexible coverage periods that provide protection for specific terms, typically between 10 and 40 years. Permanent life insurance is insurance for when, not if, you die. It covers you for your entire lifetime and pays a death benefit to your beneficiary or beneficiaries at the time of your death.
Some permanent life insurance policies come with an investment feature that aims to increase your plan’s cash value and an opportunity to earn dividends. Though these policies have a guaranteed cash value component and a chance to earn dividends, the dividends are not guaranteed.
Read our term life insurance versus permanent life insurance article to learn more about the differences between the two.
Advantages and disadvantages of term life insurance
Your unique needs and goals will help determine which type of life insurance is right for you and your loved ones. Term life insurance comes with a list of appealing advantages. However, it’s wise to consider the disadvantages, too.
Advantages of term life insurance
It’s affordable: Term life insurance is generally less costly than whole life insurance. This is because your coverage period is tied to a specific, limited time period, and your policy does not include a cash value component.
It’s easy to understand: Because there’s no investment component, term life insurance plans are straightforward and simplified.
It offers flexibility: Terms can be anything from 10 to 40 years of coverage to provide protection that best suits your needs.
It can be convertible: Your term life insurance policy can be converted to a permanent policy without providing updated medical information.
Guaranteed renewal: At the end of your policy, your term life insurance is guaranteed to be renewed, as laid out in your policy schedule. The length of the renewal can vary between insurers and policies, and there is usually no requirement for additional medical information.
Disadvantages of term life insurance
The policies don’t have a cash value: Because premiums are applied directly to your coverage, there’s no additional cash value for investment or balance to borrow against.
Renewing can be costly: Term life insurance is guaranteed to be renewed at the end of your policy term. The renewed premium will increase with your age, and any renewed premium increases will be laid out in your policy schedule.
Who is term life insurance for?
Term life insurance policies are designed to provide temporary coverage that meets the needs of those seeking protection for a defined, limited amount of time. It’s also for people not planning to use their life insurance policy as an investment vehicle. This kind of life insurance is a great choice if:
Your spouse or your child depends on you financially.
You want to take advantage of a lower rate, while you’re still young and healthy.
You have debts that need to be paid off in the event of your death.
How to choose the term life insurance policy that’s best for you
If you’re ready to select a term life insurance policy, make sure you choose an insurance provider that offers:
A reputation for stability and trustworthiness.
Experienced advisors who are available to schedule a conversation with you and advise you on your specific needs.
An online application option for those who don’t have time or aren’t able to visit an insurance provider’s location.
How much term life insurance do I need?
The amount of term life insurance you need depends on your specific circumstances. If you’re trying to calculate the right amount of coverage, consider:
Your current financial obligations.
The financial needs of your dependents, including support for housing and post-secondary education.
Additional life insurance or financial products you may already have (for example, through your employer).
Consulting with a qualified life insurance advisor can help you determine the right coverage.
How do I get a term life insurance quote?
There’s no standard, one-size-fits-all price, since your unique situation will determine the amount of your term life insurance policy quote. You can access RBC Insurance’s online Life Insurance Calculator for an estimate or speak to a qualified advisor to get your personalized quote.
Term life insurance FAQ
Here are answers to some of the most frequently asked questions about term life insurance policies.
Is there a cash value in term life insurance?
With a term life insurance plan, you pay lower premiums that go directly toward your coverage. There is no cash value. Only the higher premiums paid into a participating whole life insurance plan offer a cash value and the additional value that stems from investment dividends.
Can I borrow money from my term life insurance?
Because there is no cash value or investment component tied to term life insurance policies, you cannot borrow against your insurance.
What if I live beyond my term?
Once your initial term ends, you can renew (at a higher premium, due to your increased age) or convert your policy to a permanent life insurance plan. If you live beyond your term without renewing, your beneficiary or beneficiaries will not receive the death benefit payout.
How much does term life insurance cost?
Your unique circumstances (for example, your age, sex, lifestyle, income, coverage amount, and health status) will determine the cost of your plan. Try our Life Insurance Calculator for insight into how much term life insurance coverage you may need and how much your personalized plan will cost.
Do I need a medical exam for term life insurance?
Depending on your term life insurance policy, a medical exam may not be required. Your insurer will have the right to request additional medical information based on the answers you provide in your policy application.
Can I switch my term life insurance policy to a whole life insurance policy?
Some term life insurance policies can be converted into whole life insurance policies, depending on the term life insurance policy you select and your contract with your insurance company. RBC Insurance term life insurance policies do offer this choice. Ask your insurance advisor for guidance if you’re interested in this option.
Your financial situation is unique to you and your family. Connecting with a licensed insurance advisor can help you ask the right questions and develop a personalized plan that will ensure you make the best choice.
*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
Term life insurance provides protection that is cost-effective and easy to understand. As part of a complete and thorough financial plan, term life insurance ensures that your family can rely on your insurance plan’s financial security if something happens to you.
Key takeaways
Term life insurance is a type of coverage with a limited term, typically 10 to 40 years.
Term life insurance is an affordable and accessible kind of protection that often costs less than a whole life insurance plan and does not usually require a medical exam (depending on your age and the amount you’re applying for).
Often, term life insurance plans can be renewed (at a higher premium) for as long as you require coverage, or they can be converted into permanent life insurance.
Term life insurance policies do not have a cash value or pay dividends on invested premiums.
What is term life insurance?
Term life insurance offers coverage for a specific amount of time (a “term”), often between 10 and 40 years. It’s available to people between the ages of 18 and 70 years and is an affordable and easy-to-understand kind of insurance plan. With term life insurance, you pay a monthly or annual premium for your chosen term. Should you you pass away during the term, your beneficiary will receive a death benefit payout.
When your term ends, your coverage will be automatically renewed at a higher premium until you cancel the policy. Once you cancel your policy, your beneficiaries are no longer eligible to receive the death benefit.
Because each individual is unique, term life insurance can be customized to best suit your coverage needs. The cost is based on factors including your age, sex, health, lifestyle, smoking status, the coverage amount, and the length of the term you select. Often, term life insurance will not require you to undergo a medical exam to qualify for a policy, depending on your age and the policy amount you’re applying for.
How does term life insurance work?
Term life insurance works by purchasing a policy for a set term—such as 10, 20, or 30 years— that gives you coverage ranging from $50,000 to $25 million, depending on your needs and your budget. You pay monthly or yearly premiums, and as long as you continue to pay those, your coverage will remain in place during that period. Should you die during your term, a death benefit will be paid out to your named beneficiary/beneficiaries. If no beneficiary/beneficiaries are named on your policy, the death benefit will become part of your estate.
At the end of your term, your policy will be renewed (at a higher cost due to your increase in age), but you may have the option to convert all or part of your term life insurance policy into whole life insurance. It’s wise to speak with a licensed life insurance advisor to understand what policy options best meet your needs.
When does term life insurance coverage end?
Your term life insurance coverage can end:
On the date of your death.
On the day you submit a request, in writing, to cancel your policy.
On the day you stop paying your premiums.
How much does term life insurance cost?
The cost of term life insurance is unique to each individual. Factors such as your age, sex, health and lifestyle, smoking status, chosen term length, and the amount you choose to be insured for all contribute to determining the cost of your policy. You can customize your plan to fit your specific needs. For example, you may choose to be covered until your children reach adulthood, or you might purchase coverage for as long as you plan to be paying off your mortgage. Once you’ve decided on a plan, your monthly or annual payments, depending on your insurer, will remain the same over the course of your term. Upon renewal, payments increase, according to your age, and are then once again guaranteed for the length of the new term.
How is term life insurance different from permanent life insurance?
Term life insurance offers flexible coverage periods that provide protection for specific terms, typically between 10 and 40 years. Permanent life insurance is insurance for when, not if, you die. It covers you for your entire lifetime and pays a death benefit to your beneficiary or beneficiaries at the time of your death.
Some permanent life insurance policies come with an investment feature that aims to increase your plan’s cash value and an opportunity to earn dividends. Though these policies have a guaranteed cash value component and a chance to earn dividends, the dividends are not guaranteed.
Advantages and disadvantages of term life insurance
Your unique needs and goals will help determine which type of life insurance is right for you and your loved ones. Term life insurance comes with a list of appealing advantages. However, it’s wise to consider the disadvantages, too.
Advantages of term life insurance
It’s affordable: Term life insurance is generally less costly than whole life insurance. This is because your coverage period is tied to a specific, limited time period, and your policy does not include a cash value component.
It’s easy to understand: Because there’s no investment component, term life insurance plans are straightforward and simplified.
It offers flexibility: Terms can be anything from 10 to 40 years of coverage to provide protection that best suits your needs.
It can be convertible: Your term life insurance policy can be converted to a permanent policy without providing updated medical information.
Guaranteed renewal: At the end of your policy, your term life insurance is guaranteed to be renewed, as laid out in your policy schedule. The length of the renewal can vary between insurers and policies, and there is usually no requirement for additional medical information.
Disadvantages of term life insurance
The policies don’t have a cash value: Because premiums are applied directly to your coverage, there’s no additional cash value for investment or balance to borrow against.
Renewing can be costly: Term life insurance is guaranteed to be renewed at the end of your policy term. The renewed premium will increase with your age, and any renewed premium increases will be laid out in your policy schedule.
Who is term life insurance for?
Term life insurance policies are designed to provide temporary coverage that meets the needs of those seeking protection for a defined, limited amount of time. It’s also for people not planning to use their life insurance policy as an investment vehicle. This kind of life insurance is a great choice if:
Your spouse or your child depends on you financially.
You want to take advantage of a lower rate, while you’re still young and healthy.
You have debts that need to be paid off in the event of your death.
How to choose the term life insurance policy that’s best for you
If you’re ready to select a term life insurance policy, make sure you choose an insurance provider that offers:
A reputation for stability and trustworthiness.
Experienced advisors who are available to schedule a conversation with you and advise you on your specific needs.
Anonline application option for those who don’t have time or aren’t able to visit an insurance provider’s location.
How much term life insurance do I need?
The amount of term life insurance you need depends on your specific circumstances. If you’re trying to calculate the right amount of coverage, consider:
Your current financial obligations.
The financial needs of your dependents, including support for housing and post-secondary education.
Additional life insurance or financial products you may already have (for example, through your employer).
Consulting with a qualified life insurance advisor can help you determine the right coverage.
How do I get a term life insurance quote?
There’s no standard, one-size-fits-all price, since your unique situation will determine the amount of your term life insurance policy quote. You can access RBC Insurance’s online Life Insurance Calculator for an estimate or speak to a qualified advisor to get your personalized quote.
Term life insurance FAQ
Here are answers to some of the most frequently asked questions about term life insurance policies.
Is there a cash value in term life insurance?
With a term life insurance plan, you pay lower premiums that go directly toward your coverage. There is no cash value. Only the higher premiums paid into a participating whole life insurance plan offer a cash value and the additional value that stems from investment dividends.
Can I borrow money from my term life insurance?
Because there is no cash value or investment component tied to term life insurance policies, you cannot borrow against your insurance.
What if I live beyond my term?
Once your initial term ends, you can renew (at a higher premium, due to your increased age) or convert your policy to a permanent life insurance plan. If you live beyond your term without renewing, your beneficiary or beneficiaries will not receive the death benefit payout.
How much does term life insurance cost?
Your unique circumstances (for example, your age, sex, lifestyle, income, coverage amount, and health status) will determine the cost of your plan. Try our Life Insurance Calculator for insight into how much term life insurance coverage you may need and how much your personalized plan will cost.
Do I need a medical exam for term life insurance?
Depending on your term life insurance policy, a medical exam may not be required. Your insurer will have the right to request additional medical information based on the answers you provide in your policy application.
Can I switch my term life insurance policy to a whole life insurance policy?
Some term life insurance policies can be converted into whole life insurance policies, depending on the term life insurance policy you select and your contract with your insurance company. RBC Insurance term life insurance policies do offer this choice. Ask your insurance advisor for guidance if you’re interested in this option.
Your financial situation is unique to you and your family. Connecting with a licensed insurance advisor can help you ask the right questions and develop a personalized plan that will ensure you make the best choice. Speak with an RBC Insurance advisor by calling 1-888-925-0946 or have an advisor call you. Want to speak with an advisor in person? Find an advisor or a store.
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*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
TORONTO, December 2, 2024 — RBC Insurance launched the next step in its client experience evolution. As of December 1, 2024, clients (and their advisors) applying for RBC YourTerm® life insurance will receive immediate notification if they are approved. With no delay in the response, and policy documentation available within 5 days, clients and advisors can move forward with confidence. RBC YourTerm® applications are eligible up to $2 million, up to and including age 50, with no requirement for medical interviews or exams (e.g., blood tests).
RBC Insurance believes in the value of insurance to support communities through difficult life moments, and recognizes that the process of purchasing insurance is cumbersome and complex, making it difficult for advisors to provide great client experiences. Through a relentless focus on simplifying insurance for everyone, RBC Insurance is rapidly advancing its digital and client service capabilities. Recent advancements include:
Launching a new Express Team in November 2023 to significantly expedite the underwriting process for Term insurance applications under $2 million with no requirement for medical exams. Cycle times were cut by 50% for fully underwritten Term applications.
Accelerating the underwriting process for Term, Disability and Par Whole Life Insurance. RBC Insurance provided an option for advisors to complete the Health & Lifestyle Questionnaire online, as of August 2024. This removed the need for eligible clients to participate in telephone interviews and paramedical appointments, which can add days or weeks to receive an approved policy.
About RBC Insurance RBC Insurance® offers a wide range of life, health, home, auto, travel, wealth, group benefits, annuities and reinsurance advice and solutions, as well as creditor and business insurance services to individual, business and group clients. RBC Insurance is the brand name for the insurance operating entities of Royal Bank of Canada, Canada’s biggest bank and one of the largest in the world, based on market capitalization. RBC Insurance is among the largest Canadian bank-owned insurance organizations, with 2,600 employees who serve 4.8 million clients globally.
*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
If you were suddenly faced with a serious injury or illness, would you be able to care for and support yourself and your family? That’s the question we all need to answer when considering critical illness insurance and disability insurance.
Having the right coverage can mean a world of difference. It could be the factor that tips the balance between financial stability and all-consuming worry during an already-stressful time.
But what exactly are the differences between critical illness insurance and disability insurance? Is one better than the other, or are both necessary? This quick primer can help you understand the unique benefits of each type of policy and when one or both will best suit your needs.
Key takeaways
Critical illness insurance provides a one-time lump-sum benefit if you’re diagnosed with a serious health condition, such as life-threatening cancer, a heart attack, or a stroke.
Disability insurance helps with monthly income replacement if you can’t work for a period of time due to injury or illness.
Though critical illness insurance and disability insurance may overlap with coverage in some cases, they tend to provide protection for different illnesses and scenarios. They also have distinct exclusions and waiting periods.
Depending on your individual situation, one or both types of insurance might provide the best coverage for you and your family.
Understanding critical illness insurance
What is it?
Imagine you’re diagnosed with a serious illness, such as life-threatening cancer or experience a heart attack or a stroke. You may require specialized treatments, time off work, accommodations in your home, or help with self-care. These new needs may place a hefty financial burden on you and your family when you’re trying to recover.
While other health insurance policies may cover some of your medical expenses or help with income replacement, critical illness insurance directly pays out a one-time, tax-free lump sum. It’s designed to alleviate the financial stress associated with severe illness. And you can use the benefit however you want, such as paying for medications or treatments not covered by your other insurance, continuing to contribute to your retirement savings while you’re off work, upgrading your house or vehicle to suit your new needs, paying for childcare, or even taking a vacation to recharge. Critical illness insurance acts as a safety net and gives you flexibility during a challenging time.
Types of illnesses covered
The illnesses protected by your critical illness insurance will depend on the insurer and the plan you purchase. Typically, these conditions are commonly covered:
Life-threatening cancer
Heart attack
Stroke
Kidney failure
Major organ transplant
Coronary artery bypass surgery
Multiple sclerosis
More comprehensive plans may also provide coverage for conditions such as dementia, including Alzheimer’s disease, Parkinson’s disease, blindness, deafness, and even severe burns, paralysis, and loss of limbs. Before purchasing a policy, make sure you understand which illnesses are covered by the plan and any exclusions or limitations (such as waiting periods or survival periods before you’re eligible to claim your benefit).
Exclusions
Many plans will not pay out a lump sum or refund any premiums if you experience an illness, death, or other loss that results directly or indirectly from one of these situations:
Self-inflicted injury, attempted suicide, or suicide.
Intentional use of any drug (not prescribed by a doctor), intoxicant, narcotic, or poisonous substance.
Participation in a war or a hostile action, insurrection, or civil commotion.
Attempt to commit or commission a crime, whether you’re charged or not.
Operation of any land, water, or air conveyance that’s operated by any means other than your own muscle (think cars, motorboats, planes) while you’re under the influence of any drug, intoxicant, narcotic, or poisonous substance, including alcohol. For alcohol, the limit begins when the concentration of alcohol in 100 millilitres of blood exceeds 80 milligrams.
Speak with your insurer to confirm the details of your specific policy.
Understanding disability insurance
What is it?
If an illness or injury keeps you from working, disability insurance will typically pay out a monthly benefit to replace a portion of your lost income (often around 60 per cent to 85 per cent). Whether you experience a short-term disability, such as an injury that requires months of leave, or a long-term disability that means you can’t work for years, disability insurance acts like a consistent paycheque to help you cover your living expenses and medical bills.
Types of disabilities covered
As with critical illness insurance, the types of illnesses and disabilities covered will depend on your insurer and the plan you choose. You may receive protection in the following instances.
Total disability: When you’re unable to perform the essential duties of your occupation due to an illness or injury.
Residual disability: When your illness or disability prevents you from performing some of your essential work duties, resulting in a 20 per cent or more loss in earnings. You will eventually recover.
Partial disability: When you can’t perform any of the essential duties of your regular occupation and you experience a 20 per cent or more loss in earnings. You will eventually be able to go back to work.
Exclusions
Much like critical illness insurance, disability insurance will typically not cover any disability that results, whether directly or indirectly, from these situations:
An act or accident of war.
Normal pregnancy or childbirth (except complications).
Any injury or illness that occurs before your policy comes into effect or while your policy is not in force.
Some plans will also have these exclusions:
Any self-inflicted injury, whether or not it’s intentional, that occurs while you’re intoxicated.
Your use of any drug, unless it’s prescribed or directed by your physician.
Any suicide attempt or other intentionally self-inflicted harm.
Infections related to AIDS and HIV.
Any injury that occurs while you are committing or attempting to commit a crime, even if you’re not charged with that crime.
Subjective conditions, such as fibromyalgia and chronic fatigue syndrome.
Mental and nervous disorders, such as depression, anxiety, stress, and burnout.
Schedule a chat with your insurer if you’re not clear on the exclusions in your policy (or any policy you’re considering buying).
Key differences between critical illness insurance and disability insurance
Before you can decide whether to purchase critical illness insurance, disability insurance, or both, it’s important to understand how each type of coverage works and the ways each can provide you with financial stability during a health crisis. This chart can help you understand the primary differences between critical illness insurance and disability insurance.
Critical illness insurance
Disability insurance
Triggering event
You can make a claim if you’re diagnosed with one of the conditions or illnesses listed in your policy.
You can make a claim for benefits if you cannot complete some or all of the tasks required for your job due to injury or illness.
Waiting period
You will often need to live beyond the survival period (a.k.a. a set amount of time beyond your diagnosis, usually 30 days) before you are eligible for benefits.
You will have to wait the elimination period (a set number of days after you receive your diagnosis) before you begin getting payments.
Nature of benefits
You’ll receive a one-time lump sum, which, depending on your plan, can range from $10,000 to $3 million.
Designed to replace a portion of your lost income while you cannot work, this benefit is often paid out each month and lasts for as long as you remain disabled or until the end of your benefit period.
Duration of benefits
In most cases, your policy will end once you receive your one-time lump-sum payment. However, some insurance providers have riders that cover a second critical illness and payment.
You will receive ongoing payments for the duration of your disability, from a few months to many years, up to the limit defined in your policy. Some plans will pay for a disability that lasts until retirement age, while others have a benefit period of two, five, or 10 years.
Use of payout
You can use the lump-sum benefit however you want: to pay medical bills, upgrade your home, contribute to your RRSPs, try alternative treatments, or take a vacation to unwind.
These benefits are designed to cover living expenses while you cannot earn your regular income. While you can use the payments however you want, the amount you receive at one time is smaller and best for maintaining financial stability during a period of low or no income.
Who can apply
Anyone
Employed and self-employed people
Age eligibility
Coverage often ends between the ages of 65 and 75 years; although, some providers offer permanent insurance.
Coverage often ends between the ages of 55 and 69 years.
Premiums
Your premiums are based on the number of illnesses covered, the lump-sum payout amount you choose, your age, how long the coverage will be in place, and your overall health status.
Your premiums will depend on the disability types covered, your monthly benefit amount, how long you will be eligible to receive benefits, and your occupation.
Taxability
Tax-free
It’s tax-free income if you paid for it, and it’s taxable income if your employee paid for insurance for you.
How to best choose between critical illness insurance and disability insurance
Whether disability insurance or critical illness insurance will be right for you will depend on several factors, such as your occupation, financial situation, health risks, and more.
Financial needs and responsibilities: Take a look at your financial obligations, from mortgage payments to support of dependants. Critical illness insurance can help with large immediate expenses. Disability insurance is designed to provide ongoing income.
Health risks: Critical illnesses are common.Each year, around 247,000 Canadians will be diagnosed with cancer, and 108,000 will experience a stroke. Critical illness insurance could be an invaluable safety net if you’re affected by one of these conditions one day. If you have a job that increases your risk of injury or certain illnesses, then disability insurance may be the option for you.
Employment situation: Anyone is eligible for critical illness insurance; whereas, you must be employed or self-employed to purchase disability insurance. If you work for a company or organization, make sure you’re familiar with your employee benefits. For example, you may have comprehensive disability coverage, but no critical illness insurance. In that case, you might want to purchase your own critical illness policy.
Budget: In an ideal world, we’d all have premium disability and critical illness insurance coverage. In the real world, these plans cost money. It’s important to balance your coverage needs with the premiums that you can afford.
Dependants and family responsibilities: You may have a wide variety of people (children, aging parents, or family members with disabilities) and pets relying on your income. Critical illness insurance can provide flexibility with a larger payout if you’re diagnosed with a serious condition, while disability insurance can help to cover your day-to-day expenses.
Is it better to combine both types of insurance?
Even though both are types of health insurance, critical illness insurance provides different benefits than disability insurance. Critical illness insurance is designed to immediately alleviate financial strain if you’re diagnosed with a serious illness or condition. Disability insurance covers a broad range of illness and injuries that can affect your ability to work and helps with day-to-day expenses. You may want to combine both types of insurance if you’re looking for well-rounded coverage that protects you in many circumstances. Speak with an insurance advisor to help you make the decision that best suits your lifestyle. They can help you balance your current and long-term needs, consider your risks and budget, and help you choose the right policies to protect you and your family in all scenarios.
*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
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