With some planning and a little bit of prep work, you can help make sure your summer road trip is a safe one. Here are five tips for road trip safety.
Vehicle maintenance
Chances are your next road trip adventure will see you driving distances you don’t normally drive. If your car is close to its regularly scheduled maintenance, consider taking it in before you leave. Get a tune-up, ensure fluids are topped up, get an oil change (if your car uses oil), and have any small repairs you might have been putting off addressing. You don’t want small things to become bigger problems while you’re away from home.
If you’re not due to take your car in, check the following:
Tires: Make sure your tire pressure is correct — check your owner’s manual for the recommended pressure. Ensure there’s a safe amount of tread left, and inspect for any signs of damage
Fluids: Top up necessary fluids and consider putting an extra jug of windshield washer fluid in your trunk
Lights: Inspect to make sure lights and signal indicators are working
Should you find something that isn’t right, schedule a trip to the mechanic.
Pack an emergency road kit
Emergencies can happen when you least expect them. Out on the road, unfamiliar terrain or unpredictable weather conditions can make dealing with problems more challenging. Preparing a well-stocked emergency road kit can help you handle common roadside or first-aid situations.
Consider putting the following in an easily identifiable bag (makes it easier to find in a packed car):
Jumper or booster battery cables
Tire pressure gauge
Nylon utility cord
Syphon pump (a device used to move fluid, like gasoline)
LED flashlight
Safety vest
Signal cone
Batteries (to power things like a flashlight)
Gloves
Rain poncho
Mylar or thermal emergency blanket
Light sticks
Paper towels
Quick-fix tire sealant
Multi-tool (can include a screwdriver, pliers and cutting tool)
First aid kit
Emergency water and food
Extra cellphone charger
Check your car seats
If you have kids in the car, it’s a good idea to check the car seats:
Does the child’s harness still fit as instructed by the car seat owner’s manual?
Are there any wear patterns on the belts or harnesses that require further inspection or replacement?
Is there food or debris that needs to be cleaned (check your owner’s manual on how to clean them properly)?
Remember, any loose items in the car may become projectiles in the event of an accident. Toys and tablets inside the car might become potential hazards to all passengers, not just kids.
Travelling with pets
Keep pets secure to ensure they’re safe — and to avoid unexpected distractions for drivers. For larger dogs, consider a properly fitting harness. For smaller dogs or cats, an appropriate-sized carrier can help keep them safe and comfortable and prevent wandering around the car.
If you need a break, chances are your pet does too. Plan for frequent stops and make sure all passengers have plenty of water. And remember to never leave a pet alone in the car. Temperatures inside the car can change quickly, leading to a dangerous situation for your pet.
Know the weather conditions
With warm weather comes heat warnings, the risk of severe thunderstorms, potential flooding, and even wildfires. Check weather forecasts and know what type of driving conditions you might be facing.
Things to watch out for if you’re driving through unexpected weather conditions:
High heat may cause your engine to overheat
Wind storms can cause downed trees or other damage, making roads difficult to navigate
Heavy rains can cause floods and reduce visibility. Driving on flooded roads may affect your engine and brakes
Wildfire smoke may reduce visibility
Make sure your car insurance is up to date
Do you know when your car insurance policy renews? Make sure you check on the renewal date and that payments are coming out of your account as expected. You don’t want to be away from home in an accident only to find out your coverage has expired.
Some insurance companies have towing coverage as a part of their policies. Others offer optional roadside assistance or trip-planning services. Know what services are available as a part of your coverage before leaving.
And before pulling out of the driveway, ensure you have proof of valid insurance. If you’re an RBC Insurance client, you can sign in through Online Insurance to get a copy of your insurance slip (and if you’re new to Online Insurance, you can enroll here).
Lastly, know how to contact your insurance company before you leave on your trip. Keep a copy of the claims phone number stored in your glove box and your contact list on your phone. In the event of an accident, take some of the stress out of the situation by knowing how to connect with your insurance provider and ask for help.
Get Your Free Car Insurance Quote
Take a few minutes to get a competitive auto insurance quote online*
*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.
Road safety goes beyond what’s in your car and extends to the type of car insurance you buy. Buying the right plan and coverage helps to protect your family in the event of the unexpected and gets you back on the road faster.
Car insurance offers financial protection for you and your family or dependents in the event of an auto accident. It’s mandatory for all drivers in Canada and can help cover the costs of injuries to yourself and others, as well as auto repairs, theft and more. But just like no two families are the same, no car insurance policy or insurance company is alike. Here are some things to look for when shopping for a family car insurance policy in Canada.
Understanding Car Insurance
With car insurance, you pay a monthly or annual fee (called a premium) to cover yourself or other drivers in your household. If you have an accident, the insurance covers the cost of repairs to your car and any damages you may be liable for and could pay out money to you or your family in the event of injuries or deaths.
Car insurance policies provide coverage for:
Personal injury or death: Receive a financial settlement if you or your family are injured or die in a covered car accident.
Injury or death of others: Liability insurance covers costs if one of your passengers or another driver is injured or killed in an accident where you’re at fault.
Uninsured or unidentified drivers: Your insurance may also cover you if you’re involved in an accident with someone who doesn’t have insurance or with an unknown driver, like in the event of a hit-and-run.
When choosing a policy, some parts of it will include mandatory coverage (this varies for every province or territory), and there will be additional optional coverages that you can also buy. Usually, coverage falls into a few categories:
How much does car insurance cost for families in Canada?
Car insurance prices depend on many things, including:
Location: Insurance prices vary by province, city and region.
Driving history: Experienced drivers tend to pay less. New or young drivers, people on graduated licensing programs (depending on your province), and people with a driving record that includes accidents or traffic convictions (like speeding tickets) usually pay more.
Driving habits: Do you drive only on weekends, to and from work, or is your personal vehicle used for work purposes? The different ways you use your car can impact your insurance price.
How to choose a car insurance policy for your family
Think about your family’s driving needs
Maybe you all share your parents’ car for work, school and grocery runs. Or maybe you have multiple cars and a recreational vehicle, like a motorhome and require motorhome insurance. It’s useful to talk to an insurance advisor about what your family needs.
Some important factors you should be aware of:
Multi-vehicle households: You could save by insuring multiple cars under the same car insurance policy rather than taking out separate insurance policies.
The number of drivers (or soon-to-be drivers): Young drivers can gain experience by being “secondary” or “occasional” drivers on their parents’ car insurance policies, even if they’re away at college or university.
Budget: Some insurance policies go beyond the basics and may cost more than others. Look at the coverage you need and how much you can afford. There are ways to customize your insurance policy and price. For example, to save on the price you pay monthly or annually, you could select a higher deductible, which is the amount you have to pay if you make a claim. You’ll pay more if you make an insurance claim, but you’ll get a lower cost upfront.
Comparison shopping for car insurance
Shopping around can help you save money, as well as give you a better idea of features available with different companies.
Get quotes from multiple insurers: Doing your research can help you find the policy that works best for your family. An insurance advisor can answer questions and help you understand what types of insurance would meet your family’s needs and what prices to expect.
Compare coverage options: Compare what’s covered with each plan and the different options. There are additional coverages that you can buy to help you save money in the event of a claim, like forgiveness for your first at-fault accident.
Get advice from a licensed insurance advisor: They can review the policy with you so that you understand the terms of your plan. They can also explain any situations where you may not be covered or require additional coverage.
Ask about discounts: Some insurance companies offer special pricing for bundling home and auto insurance together, as well as discounts if you drive an electric or hybrid vehicle1 or belong to an eligible professional association or organization, like an employee group or union.
How to purchase car insurance in Canada
There are several ways to buy car insurance in Canada, including:
Directly from an insurance company where licensed advisors can guide you through the process and give you helpful advice
Insurance brokers can help you shop around for different plans and get you prices from multiple insurance companies
Maintaining your car insurance policy
It’s important to be proactive about paying your bills and keeping your information up to date to ensure your insurance coverage stays active and your family is protected.
Be sure to:
Pay premiums on time to avoid extra fees: Set up automatic payments and check that your monthly payments have gone through, or ask your insurance company about making annual payments and when they send reminders.
Keep your information updated: Update your personal information as it changes, like adding or removing drivers from your policy and updating your address and credit card number and expiry date.
Renew your policy on time: Make sure you’re prepared for when your policy is up for renewal, and take the time to speak to an insurance advisor about your options in advance. There may be ways you can save money; for example, if your needs or situation has changed or if there are options for bundling insurance.
Making a car insurance claim
Steps to take after an accident
No one plans to get in a car accident, but if it does happen, here are the steps you need to take:
Stop and pull over when and where it is safe to do so
Check for injuries (yourself and if other parties are involved). Call 911 if required
Contact the police immediately
Exchange information with the other driver, including:
Name, address and phone number
Driver’s license number
Car make and model and license plate
Insurance company name, phone number and the policy number
Take photos of the damage to both cars
Filing a claim with your insurance company
If you’re involved in an accident:
Report the accident to your insurance company right away
Keep any documentation you have from the car accident
Submit any requested documentation and receipts to your insurance company
Having the right car insurance policy can protect you and your family from the financial impacts of a car accident. Be sure to update your plan as your family’s situation changes. This can help ensure your loved ones have the coverage they need and get them back on the road faster.
Interested in learning more about car insurance? Read your policy carefully. Be sure to check your policy every year to ensure that all your information is accurate and current. Ask questions in case there are discounts your insurance company offers that you qualify for.
1. Electric vehicle and hybrid vehicle discounts can vary based on the province or territory where the customer lives.
Get Your Free Car Insurance Quote
Take a few minutes to get a competitive auto insurance quote online*
*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.
In 2021, the number of renter households grew faster than owner households, according to Statistics Canada, and in cities like Québec City and Halifax, more than 60 per cent of new dwellings built since 2016 are rentals. Yet many tenants aren’t aware that if there’s an unexpected situation like a flood or fire, the landlord’s insurance won’t cover the loss of their personal belongings — and those items can add up quickly. Insuring yourself and your belongings now could help you get back on your feet if you need to make a claim.
What is tenant insurance?
Like other types of home insurance, tenant insurance offers protection for damage or loss to your personal property at your rental home. In some cases, it can also cover your personal property when it is away from your premises. For example, if your laptop is stolen from your car.
Tenant insurance may also help cover costs, like moving expenses if you need to leave your rental property so repairs can be made after a covered claim for fire or water damage. Liability claims may also be covered if you accidentally damage someone else’s property, like a neighbouring unit or home. Plus, no matter where you are, liability claims may be covered if you accidentally cause physical injury to someone else. For example, while you’re on vacation out of the country, you throw a baseball and accidentally knock out a bystander’s tooth.
What does tenant insurance cover?
Tenant insurance, sometimes called renter’s insurance, generally covers two things: Personal belongings and liabilities. You can also purchase special coverage for things like business equipment kept at home, bicycles or jewelry.
Personal belongings
This is what you own, like your clothes, furniture, and electronics. You may be surprised by how much it would cost to replace your stuff. Try walking around your home and estimating what it would cost to buy everything new again — from your shoes to your toothbrush to your bed. It can add up quickly!
Liability
Tenant legal liability coverage can help protect you from accidentally injuring another person or damaging someone else’s property. For example, if you have a guest over and they slip and fall, or if your microwave catches fire and your neighbour’s unit has smoke damage.
Additional living expenses
Tenant insurance may also help cover costs, like hotels or food if you need to leave your rental property so repairs can be made after a covered claim.
Do all renters need tenant insurance?
Renters are legally responsible for damages to the rental properties they live in, any unintentional injuries to the people in them and accidental damage to other properties. Anyone renting a property can have tenant insurance, but it isn’t mandatory in Canada. However, many landlords ask for proof of it as part of the rental agreement.
While your landlord’s house or property insurance may cover damages to the structure of the home itself or any appliances the landlord owns, it won’t cover damage to items that belong to you. It also doesn’t cover you from situations where you could be personally liable, like if you accidentally cause a flood that damages a neighbour’s unit.
How does tenant insurance protect my personal belongings?
Tenant insurance covers items ranging from clothes and computers to appliances and books as long as you own them. For example, if a pipe burst and ruined your furniture and belongings in your basement apartment, your renter’s insurance could help you replace those items. Or if your storage locker in your building is broken into and items stolen, having tenant insurance could also help replace your losses.
Consider getting enough coverage so you can repurchase everything new if needed. Keep an itemized list of what’s inside your home, take photos and videos of your belongings and record serial numbers. Store your list somewhere safe outside of your home, like a safety deposit box or a secured document online. This way, you can access it if you can’t get into your home. Update your list on a regular basis, especially when you buy something valuable, and consider whether you need to increase your coverage.
What is liability coverage?
This is the amount of money you are covered for if someone (or their insurance company) sues you for damages. For example, if you have coverage for $2 million, your policy covers your legal liability up to that amount. For this reason, many renters buy policies with as much liability coverage as they can afford.
How much does tenant insurance cost?
Compared to home insurance, tenant insurance is usually more affordable because it does not cover the replacement costs of the house itself, but it covers:
Your personal property and belongings, like clothing and furniture
Liability if someone is injured in your home, like if they slip and fall on your steps
Liability coverage for repairs and damages where you’re at fault
Legal defence costs if someone sues you for damages to their property
Some insurance companies, like RBC Insurance, offer discounts for bundling your tenant insurance with other policies, like car insurance. It’s an option to explore if you need both types of policies.
Getting tenant’s insurance now could spare you from spending thousands of dollars later to replace items, repair damages, or deal with costly lawsuits from landlords or other individuals.
A licensed insurance advisor can help you get a tenant insurance quote and find the right coverage for your situation.
Great Rates and Expert Advice on Home Insurance
Get a free online quote for coverage to protect you, your property, and your belongings from the unexpected*.
*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.
Here are nine ways to make sure you get the coverage you need, at a price you can afford.
1. Get professional insurance advice
Have an open, detailed conversation with an insurance advisor about what you own and how much coverage you need. Make sure you have the conversation annually, for as long as you own your home. If you renovate, enhance your property or make a major purchase, let your advisor know so that your insurance coverage can be adjusted.
2. Pay for your insurance annually
You may save money if you pay your premiums (i.e., what you’re charged for the insurance) annually instead of monthly. Many insurers charge a service fee if you opt to pay month to month.
3. Consent to a credit check
Some provinces allow home insurers to ask for your consent to check your credit score. You can say no. But saying yes might save you money if you have a good credit score. Studies have found a link between high personal credit scores and lower risks for the insurer, which could lead to a better rate. This credit check is a “soft inquiry,” which means it will not actually impact your credit score. And your credit score cannot be used as a reason to increase your premium or deny you coverage.
4. Bundle your insurance
You may be able to save if you insure both your home and auto with the same company. Bundling could save you up to 15%.
5. Ask about group insurance plans
Some employers and associations partner with an insurer to offer more affordable group insurance coverage. If you’re an employee or member, ask whether your organization has a group home and auto insurance plan.
6. Install smoke and burglar alarms
You may be eligible for savings if you have a home security system that is centrally monitored for fire and theft.
7. Consider buying a new home vs. an older one
It may be less expensive to insure a newly built home than an older home. That’s because older homes often have a higher incidence of claims than newer homes.
8. Get rewarded for your loyalty
Some insurers may offer savings to loyal customers. You may also qualify for savings if you’ve had home insurance coverage continuously in effect for a certain number of years.
9. Protect your home
One of the best ways to save money on home insurance is to take care of your home and be claims free:
Prevent water damage by buying water sensors that alert you if there is a leak in your house, or by installing a sump pump with a backup battery and alarm.
Clean dryer lint trap and dryer vents regularly.
Prune trees so they don’t overhang your house.
Clean your gutters in the spring and fall.
Inspect your roof and shingles to ensure both are in good shape.
Read RBC Insurance’s Homeowner’s Guide for more tips on protecting your home.
Every insurer is different, and rules and regulations may vary by province. To learn more about choosing the right type of coverage for your home, talk to an RBC Insurance advisor or get a quote online today.
Great Rates and Expert Advice on Home Insurance
Get a free online quote* for coverage to protect you, your property, and your belongings from the unexpected.
*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.
Both types of insurance can protect your loved ones and their futures, but not all life insurance policies are the same. Different products have features that can help you meet your personal needs and goals, whether you’re growing your family, getting ready for retirement, or just planning ahead.
Key takeaways
Life insurance helps protect your loved ones from unexpected costs when you pass away.
There are two main types of life insurance: term and permanent life insurance.
Term life insurance provides coverage over a fixed amount of time with often affordable monthly or yearly payments. However, your beneficiaries won’t receive a payout if you live beyond your policy’s term.
Permanent life insurance costs more upfront but covers you for life, even if there are changes in your health.
Some permanent life insurance policies also work like investments. If you cancel early, you can receive the policy’s cash value.
Life Insurance Basics
Life insurance is a great way to help your loved ones meet financial goals or commitments, after you pass away. It’s also a way to ensure they’re able to:
Pay for final expenses, such as funeral costs
Pay off a mortgage or other debt
Cover the costs of raising children
Put aside funds for retirement
There are two basic types of life insurance: term and permanent. The cost of your life insurance policy depends on your personal situation, factoring in things like your age, gender, health status, habits (like smoking and drinking), and any activities that may be considered risky (like motorcycling). However, in general, term policies are more affordable than permanent ones.
It’s important to note that not everybody is insurable. There are instances where something like a pre-existing health condition may affect eligibility to buy life insurance. However, there could still be options, like guaranteed life insurance policies that offer a lower death benefit (the amount paid out by the life insurance company) at a higher premium.
What is term life insurance?
Term life insurance is often the most straightforward and affordable way to get coverage. You pay an affordable premium (a regular monthly or yearly fee), and in return, receive life insurance coverage for a defined amount of time (called a term), such as 20 years. When your term ends, your insurance fees also end, and your loved ones are no longer eligible to receive a death benefit when you pass away.
Term life premiums
With term life insurance, you choose how long you’d like to pay premiums for, such as 10, 20, 30 or 40 years. The length of your term and the amount of coverage you choose affects the price you’ll pay each month, which could be as low as $13 a month[1] (paying for policies yearly is also an option). While coverage is temporary, you may have options to convert to long-term coverage later if needed.
Benefits of term life insurance
There are many benefits to term life insurance, including:
Flexible terms: Flexible policy terms commonly range from 10-40 years.
Affordable rates: Monthly or annual fees are guaranteed to stay the same for your entire term.
Accessible policies: Medical exams may not be required depending on your policy and terms.
Customizable add-ons: Policies can be adapted to meet changing needs over time or include coverage for children (such as a children’s term rider, which provides life insurance for children as well).
Tax-free death benefit: Your beneficiaries will receive a lump sum, tax-free benefit if you pass away, offering extra stability at a critical time.
Convertible options: Some policies have the ability to convert to a permanent or universal life insurance policy before the age of 71, with no health or medical exams needed.
Drawbacks of term life insurance
Terms can run out: Living beyond your term means your policy ends without your beneficiaries getting a benefit payout. However, there may be options to continue or renew your policy or convert it into a permanent policy.
Eligibility can change: As we age, our health circumstances also change. Buying life insurance when you’re younger can make policies more affordable. For example, term insurance is usually easier to qualify for when you’re younger and may be more challenging to qualify for when you’re older, or become more expensive to buy.
What is permanent life insurance?
Permanent life insurance covers your entire life, regardless of your age, how long you live, and your health status. Depending on the policy it can also help with estate planning needs, like costs associated with transferring assets to your partner or kids. Permanent life insurance premiums can be paid monthly or yearly, just like term insurance, but coverage remains in place when your payments end. Like term insurance, buying life insurance when you’re younger and healthier can make policies more affordable. If you cancel a permanent life policy before your death, you’ll receive the cash value of your policy (minus any fees from managing the plan associated with the policy).
Some permanent policies also allow parents or grandparents to transfer a life insurance policy to a child. That way, they have life insurance coverage as they grow up, and if the child develops an illness or health condition that would make them uninsurable.
Common types of permanent life insurance are:
Participating Whole Life Insurance: These policy premiums and benefits don’t change over time. Because you’re paying into the policy it can be structured so that it’s paid up (reaches full value and monthly payments end) after a certain period of time, like 10 or 20 years, or once you reach 100 years old. Once a policy is paid up, coverage still remains in place. With participating whole life insurance the policy’s invested assets are professionally managed by the insurance company, not the policy holder.
Universal Life Insurance: These flexible policies allow you to update policy premiums and benefits over the years. They can be structured so that you overfund your policy (pay more than the minimum monthly fees required) earlier in life to raise the cash value up front, and offset the cost of premiums later. This can be really helpful for people anticipating retirement or another fixed-income situation down the road. With universal life insurance the policy holder is involved with managing the assets in the policy.
T100 permanent life insurance: This type of permanent life insurance policy covers you for life but without the investment and cash-value benefits of other permanent policies. Like term policies, you pay your monthly or annual contribution fees and are covered.
Benefits of permanent life insurance
Permanent policies have a range of benefits, on top of paying out a benefit when you pass away. Additional benefits include:
Dividend reinvestment: The dividends you earn in the policy can be reinvested, increasing the value of the policy’s death benefit over time. As the value of your death benefit grows, so does the cash value of your policy.
Tax-deferred growth: Your policy’s annual cash value can grow without incurring annual taxes, but it is subject to limits set by the Income Tax Act.
Options to use your cash value: You may request to use your policy as collateral for a loan from a financial institution, subject to the lender’s requirements. You can also access the funds in your policy to supplement retirement income or if you have an illness.
Drawbacks of permanent life insurance
As these policies last your lifetime, they tend to cost more than term life insurance, making them less affordable in the near term.
What are the differences between term insurance vs. permanent life insurance?
Below is an overview of the differences between RBC Insurance term and permanent life insurance policies and some answers to common questions.
Term Life
Permanent Life
Coverage Timeframe
Usually varies: 10 to 40 years, with the option to renew for another term
For life
Coverage amounts
$50,000 – $25,000,000
Amounts depend on type of product and age of the insured.
$25,000 to $25,000,000
Medical Exam
May, or may not, required depending on the term product
Typically required
Tax-free death benefit
Yes*
Yes*
*Note that probate fees are applicable if you have not designated a beneficiary and the proceeds of your policy become part of your estate.
How Do I Know Which Policy Is Right For Me?
While both permanent and term life insurance provide a payout when you pass away, permanent life insurance offers additional benefits that may be worth the additional cost to you.
Here are some questions to consider when choosing a life insurance policy:
Do you want the guarantee of life insurance coverage in place for as long as you live?
Are you concerned that you may become uninsurable over time?
Are you seeking an additional tax-deferred growth opportunity to build up savings beyond your Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP)?
Are you more interested in ensuring affordable life insurance coverage now, versus a product that combines insurance and investing?
Will you only require life insurance coverage for a defined period? For example, you might want to ensure you have funds available to pay the costs of your child or children’s post-secondary education or to cover your remaining mortgage balance.
Term Life Insurance
Permanent Life Insurance
Universal Life Insurance
Participating Whole Life Insurance
An option for shorter-term needs if:
● Others depend on your income
● You have debts that need to be paid off in the event of your death
● You are in need of a cost-efficient solution
An option if in addition to lifetime insurance coverage:
● You’re looking for a tax-deferred growth opportunity
● You want to take a hands-on approach to managing the investment risk of your life insurance policy
An option if in addition to lifetime insurance coverage:
● You’re looking for a tax-deferred growth opportunity combined with the comfort of guarantees
● You want to take a hands-off approach to your life insurance policy by benefiting from the investment expert
Common Questions:
How long does a life insurance policy last? Permanent life insurance provides coverage for as long as you’re alive, regardless of age or health status. Term life insurance covers you only for a specific period, known as a term, such as 10, 20 or 30 years. As you age, term insurance may be more challenging to qualify for and more expensive to buy.
What do life insurance premiums pay? With both types of policies, you’re entering into a contract with an insurance company to pay the death benefit you’ve agreed on if you die while the insurance coverage is in force. This death benefit can range from $25,000 to $25 million, depending on your selected coverage level.
Is my life insurance policy considered an investment? In addition to the guaranteed death benefit, some permanent insurance policies, such as Universal Life and Whole Life, include an investment component. This component, called the embedded cash value, grows without being taxed yearly. You can use the cash value as an emergency fund by withdrawing or borrowing against it before the person insured under the policy passes away. If you withdraw or borrow from the policy, some income tax might be payable.
Will my beneficiaries need to pay taxes? When the person insured under the policy passes away, the beneficiary will receive a lump sum death benefit that isn’t taxable.
Will I need to manage my life insurance policy? Different options are available, depending on how hands-on you want. Some permanent life insurance policies that include investment options, such as RBC Growth Insurance® are managed by RBC Insurance, so you can be hands-off and let the company manage ongoing changes.
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 right choice. Speak with an RBC Insurance Advisor by calling 1-888-925-0946 or Have an Advisor Call Me. Want to speak with an advisor in person? Find an Advisor or Store
RBC Life Insurance
Protect Your Loved Ones With Dependable Life Insurance
*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.
1. Rate based on a $100,000, Term 10 policy for a male, age 37, non-smoker. This does not constitute advice. Please speak with a licensed insurance advisor for more information on what coverage is suitable for your needs. Subject to policy exclusions. Underwritten by RBC Life Insurance Company. The information within this site is not intended to provide tax advice. You should seek independent tax advice from a tax professional or advisor.
For many, it’s a time to double down on values and build a strong foundation for the future, but there are many reasons to consider life insurance right now as part of that plan.
Life insurance can be an important part of short and long-term financial planning. Starting early can help you find financial security and protect all that you’re building and working towards now, with other benefits, like more affordable monthly rates and investment growth.
Key takeaways
Life insurance is a great way to protect your family’s financial future even when you’re young, by ensuring they can financially support themselves if you’re gone.
It may be more affordable to buy life insurance in your 20s and 30s, when you’re likely younger and healthier.
Short-term financial benefits can include affordability and coverage without a medical exam, for peace of mind as life changes and your family grows.
Long-term financial benefits can include better eligibility (coverage even if you wait until later in life and develop health issues) and ways to grow wealth through investment opportunities.
Why should people in their 20s get life insurance?
Younger people might consider life insurance for the following reasons:
Lower premiums
Life insurance premiums, the monthly or annual fees you pay now to keep your coverage active, are often lower for younger people. It can be much more affordable to have purchased life insurance when you’re younger, than when you are in your 40s or older.
Easier to get approved
There are many factors that affect life insurance premiums but your age and your health are arguably two top factors, so why not lock in low premiums now? When you buy a term policy the rate is set and you pay the same premium for the duration of your policy term.
You plan to own a home
Carrying a mortgage can feel daunting when you’re starting a family and money is tight. Life insurance includes benefits that could help your family cover mortgage costs and afford to stay in your home if something happens to you. Plans that offer investment opportunities can also add equity to your estate and give you more options for getting loans or paying down debts later.
You are getting married or starting a family
Protecting your family goes beyond baby-proofing the house. Life insurance is a way to safeguard your new family’s financial stability, now and in the future, so you can all sleep better at night.
How does life insurance in your 20s and 30s protect your loved ones?
Immediate benefits: You’ll have peace of mind knowing that if something happens to you now, any expenses related to your death will be taken care of. Your loved ones will receive a death benefit, a lump sum of tax-free or tax-deferred money when you pass away. Death benefits can help cover funeral costs and expenses and cover your debts. For example, public student loan debts are forgiven when you die, but private loan debts may still need to be paid off.
Long-term benefits: Signing up for a life insurance plan early means costs will be more affordable over the years. This can help during a time of life when daily expenses can be high, like when you’re paying for daycare costs or rent. Even if you don’t have a family but plan on starting one someday, you can rest easier knowing you’ve planned for their financial stability.
Permanent life insurance plans can have additional long-term benefits. They can help grow your wealth over the years, with a portion of your premiums invested. It can also help with estate planning by covering some of the government taxes and fees that arise when you pass away, and your assets are transferred to loved ones.
What life insurance options are available to younger people
Depending on your goals and life plans, life insurance companies have different options to meet your budget and life stage.
Types of life Insurance
Term life insurance: Term life insurance plans are more affordable plans over a set amount of time (called a term), usually between 10 and 40 years. Coverage expires when your term is up but can be converted to permanent plans later. Term insurance is a popular choice for people at a younger age who may want a lower monthly cost now, as they’re paying off debts or planning other life purchases.
Permanent life insurance: Permanent coverage costs more upfront but covers you for life. Different types of permanent life insurance plans are available including Whole Life, Universal, and T100. Some permanent plans offer investment opportunities to grow wealth as you protect your family.
Whole life insurance: Provides lifetime coverage, with monthly fees that won’t change over time. You will still be insured for life, even when your payments end. This can be an option for people who take a “set it and forget it” approach to their finances and investments.
Universal life insurance: A more flexible permanent plan that allows you to update your premiums and benefits over time as life changes. This can be an option for people who want to be able to shift plans and enjoy being hands-on with investments.
T100 life insurance: A straightforward permanent plan where you pay a fixed amount each month or year for life and no longer need to pay a monthly premium when you reach 100.
Questions to ask when considering what life insurance is best for you:
Do I need life insurance if I don’t have kids?
Life insurance can be an important part of your financial plan, even if you don’t have kids. It can cover expensive funeral costs, debts like private student debts and bank loans, and relieve the financial pressure on other family members or friends. If you do have kids in the future, you can list them as beneficiaries on your plan at any time.
What if my goals change over the next 20-40 years?
You can update your beneficiaries at any time throughout your life, so if you have a new partner or more children, you can ensure everyone is protected.
Can I change my life insurance plan over the years?
Permanent life insurance plans can be adapted over the years. You can pay your set premium or decide to pay more into your plan to increase its value or end its term early.
Will the amount I pay monthly change over the years?
Both term and permanent plans have set monthly payments that won’t change over your lifetime. However, some permanent plans have the option of changing the amount you pay and your coverage.
What is the best age to buy life insurance?
There is no best age to buy life insurance, but purchasing a policy in your 20s and 30s has many benefits, like more affordable costs. It’s usually more affordable to purchase a plan when you’re young and healthy rather than waiting until later when you may have developed health issues.
How to decide what options are right for you?
Getting a policy earlier in life may help you save money, plan for your family and invest in your future. A licensed insurance advisor can help you ask the right questions and develop a personalized plan that will ensure you make the right choice for you and your family.
*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.
1. Rate based on a $100,000, Term 10 policy for a male, age 37, non-smoker. This does not constitute advice. Please speak with a licensed insurance advisor for more information on what coverage is suitable for your needs. Subject to policy exclusions. Underwritten by RBC Life Insurance Company. The information within this site is not intended to provide tax advice. You should seek independent tax advice from a tax professional or advisor.
TORONTO, May 2, 2023 – Inflation and market volatility continue to hammer at Canadians’ spending and savings, so when it comes to estate planning, a large majority want to maximize the inheritance left to their loved ones, be it by avoiding unnecessary estate fees (87%) or minimizing out-of-pocket settlement costs (86%) according to a recent survey by RBC Insurance. This is particularly true among those 55+ (93% and 91% respectively).
However, the findings also suggest there is a lack of planning and prioritization among Canadians when it comes to preparing their estate, which not only jeopardizes the value of the inheritance but also places potential hardship on beneficiaries.
“Estate plans are important to ensure loved ones aren’t left feeling overwhelmed when managing your end-of-life finances,” says Selene Soo, director of Wealth Products for RBC Insurance. “This includes paying out-of-pocket for funeral arrangements, mortgage payments, utility bills, and lawyer fees, among other things.”
What happens to your money after you die?
Many Canadians don’t have a clear understanding of what happens to their money after they die, revealing a lack of knowledge about important aspects of wills and estate planning:
61% don’t feel knowledgeable about or have never heard of the probate process
62% don’t know that having a will does not prevent an estate from being taxed after death
57% aren’t aware that estate taxes may be reduced by insurance policy benefits, which offer opportunities for your inheritance to bypass probate
This awareness gap makes it more difficult for Canadians to set up their estate advantageously through financial products and services that can help to leave the legacy they intended. For example, only 25% say they are knowledgeable about segregated funds, an investment solution that can help maximize an inheritance by reducing estate fees, since the funds bypass probate and are paid directly to an appropriate named beneficiary.
Talking to loved ones and financial advisors inspires confidence
Adding to the lack of knowledge is that Canadians aren’t having open conversations about their preferences for what happens with their assets at the end of their lives. Communicating your estate plan to loved ones is important, yet four in ten Canadians (42%) aged 55+ are not talking openly about their long-term wishes and how they want their estate plan to be executed.
In fact, two in five (38%) aged 55+ say their financial affairs are private and they don’t feel comfortable discussing them with their loved ones, while one in five (21%) say that speaking with their family about it will cause infighting.
Furthermore, one-third (34%) say that their spouse/partner is not familiar with what’s in their estate plan, while half (51%) say their financial planner is not familiar, despite the knowledge and advice they could provide.
Yet — perhaps not surprisingly — having open conversations about how you want to preserve, manage and distribute assets reflects positively on Canadians’ feelings and confidence regarding retirement and leaving a legacy. Among those Canadians who have open conversations about their estate, 60% feel they will leave loved ones financially secure (versus 39% who do not), and 53% feel confident/comfortable in their ability to pass on a legacy (versus 29% who do not).
“Having an estate plan in place allows you to protect what’s most important to you and will help you to better manage your family’s financial future,” adds Soo. “It will also give you peace of mind that your wishes are in place and make the transition of your assets to your loved ones a quick and smooth process.”
About the RBC Insurance Study
These are some of the findings of an Ipsos poll conducted between March 21 to 24, 2023, on behalf of RBC Insurance. For this survey, a sample of 1,501 Canadians aged 18+ was interviewed online. This total sample included a boost sample of those aged 55+. Quotas and weighting were employed to ensure that the sample’s composition reflects that of the Canadian population according to census information. The precision of online polls is measured using a credibility interval. In this case, the results are considered accurate to within ± 2.9 percentage points, 19 times out of 20, of what the results would have been had all Canadians been surveyed. The credibility interval will be wider for subsets of the population.
About RBC Insurance
RBC Insurance® offers a wide range of life, health, home, auto, travel, wealth and reinsurance advice and solutions, as well as creditor and business insurance services. RBC Insurance serves nearly 5 million clients globally, catering solutions uniquely for individuals, businesses and groups. Its brand is built on trust, strength, stability and continual success, and it has consistently been awarded strong credit ratings by A.M. Best and S&P Global. Its over 2,600 employees hold people at the heart of their service, continually striving to offer the best advice and care when their clients need it the most. For more information, please visit rbcinsurance.com. Any amount that is allocated to a segregated fund is invested at the risk of the contract holder and may increase or decrease in value (subject to death benefit and maturity guarantees).
Media contact
Jana Lepp, Senior Manager, Corporate Communications, RBC Insurance, 416-348-2966
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