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Life Insurance for Seniors in Canada – The Guide to Buying at 60+

Feb 24, 2023 | Insurance, Life Insurance

There is no argument about the benefit of life insurance for a healthy adult. There are many policy options to choose from, and the premiums are affordable. When the applicant dies, the death benefits can go to named beneficiaries, who can use the payout as they see fit.

As you approach senior citizenship, the policy conditions become less favorable. Many Canadians already have life insurance by the time they retire.

However, with 52% of the population still without a policy, some individuals may still need to explore life insurance for seniors as they reach this age range. It may not always be a result of poor financial planning. Sometimes, it just makes sense to reevaluate an existing life insurance policy or take out a new one as you draw close to retirement.

Can you buy a policy around this age? How much will it cost? We’ll cover all the details in this article.

When Is It a Good Idea to Get Life Insurance at Age 60?

You need life insurance at age 60 if:

  • You’re not yet retired. If you and your family still rely on your earnings from your job, you need life insurance to ensure that they will have a soft landing if you pass suddenly.
  • You fall into the high net worth bracket. A permanent life insurance policy can help reduce your estate taxes when you pass.
  • You still have dependents. Many Canadians aged 60 and over no longer have people depending on them. If that’s not the case in your situation, you need life insurance to ensure that your dependents are well-supported when you pass on.
  • You have outstanding debt. The death benefits from a life insurance policy can help offset any debts that may transfer to your loved ones after you pass.
  • You want to cover burial and funeral costs. Funeral expenses in Canada range from $5,000 all the way up into the tens of thousands depending on your beliefs and the style and format of the event. The benefits from your life insurance policy can help your family pay off this significant expense.
  • You have to replace your group life insurance policy. Most group benefit insurance policies end when you retire. Moving to a new insurance policy is the best way to stay under cover in retirement.
  • You need a more befitting life insurance policy. If you bought life insurance in your 30s or 40s, you might feel the need to change the terms now that you are in your 60s. You can choose to add to the policy or replace it.

Looking at the possible scenarios above, you can see that many circumstances can push anyone to buy insurance at 60 years or older.

Even in Your 60’s, There Is a Life Insurance Policy For You

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Do Insurance Companies Sell Life Insurance for 60-Year-Olds?

Yes, insurance companies in Canada sell life insurance to 60-year-olds. They sell all types of life insurance to people in this age range, including traditionally underwritten life insurance.  

The one major difference between buying life insurance at this age compared to your 30s and 40s is the cost of the policy. The monthly premium for a 60-year-old looking to buy life insurance will generally be more than 300% higher compared to a 30-year-old looking to buy a similar policy.

However, you can get reasonable rates (for the age bracket) as long as you are healthy. If you are already on medications or battling any health condition, you may find it difficult to secure life insurance at a good rate. If this is the case, exploring life insurance policies for pre-existing conditions is an option.

Most insurance providers will put you through a medical exam before selling you a traditional term or whole life insurance policy. If you choose not to undergo medical checks, you can only qualify for a “no-medical” policy. A “no-medical” policy commands higher life insurance premiums without providing adequate coverage.

So, the good news is that you can still buy life insurance at 60. However, you must be prepared to wade through terms and conditions you would have avoided 20 to 30 years ago.

What Is the Best Life Insurance for 60-Year-Olds?

The best life insurance for 60-year-olds will vary from one individual to the other. The options you can choose from include the following:

Term Life Insurance

A term life insurance policy is an affordable option if you’re in excellent health and don’t mind going through a medical examination. At age 60, you can find a 10-20-year term life insurance policy.

These short-term policies are the best for covering debts and providing financial support for your loved ones if you pass within the policy term.

Whole Life Insurance

Whole life insurance policies provide lifelong coverage for as long you pay the premiums. They have a cash value component that will accumulate in value over time. When the value has grown well enough, you can withdraw the cash or take a loan against the policy.

However, choosing whole life insurance for the cash value component may not be a good idea. It will take up to a decade for the cash value to amount to tangible sums. You should also keep in mind that these policies typically cost more than others, especially when you buy yours as a 60-year-old.

No-Medical-Exam Life Insurance

Life insurance companies put prospective policyholders through a medical examination (typically free) to predict life expectancy.

However, they offer no-medical-exam policies to people who prefer not to undergo medical checks due to underlying conditions or fear of hospital procedures. If you choose these policies, you’ll only need to fill out a health questionnaire.

No-medical-exam policies have higher premiums, and their coverage is usually below $100,000.

Some types of no-medical-exam life insurance policies have a two-year wait period. If you pass within this two-year window, the provider will not pay any death benefits. Instead, your named beneficiaries will receive the total premiums you’ve paid for the policy plus interest where applicable.

You should only choose no-medical life insurance if you’re certain that the coverage on offer is good enough for your goals and reason for securing the life insurance policy.

Want to dig deeper into the different types of life insurance options discussed above? You can do that here.

How Much Life Insurance Coverage Is Good for a 60-Year-Old?

The extent of life insurance coverage you need as a 60-year-old depends on your personal situation. Imagine a scenario where:

  • You have paid off your mortgage
  • You have only your spouse as a dependent
  • You have healthy retirement savings

In such ideal conditions, you don’t need to pay high premiums for high death benefits. On the other hand, if you still have dependents and ongoing mortgage or other such debts, you’ll need to choose the highest level of coverage you can afford to avoid transferring the debt burden to your loved ones when you pass.

Top Tips to Keep In Mind When Shopping for Life insurance for 60-Year-Olds

When shopping for life insurance as a 60-year-old, you must first draw up your financial goals and calculate how much it would cost to reach them.  

Are you looking to purchase life insurance to keep the burden of mortgage payments off your spouse? In that case, you should look for a policy that can pay out sums that amount to at least 100% of the remaining mortgage payment.

If you’re looking for a policy to take care of your burial and funeral expenses, you can consider getting a small whole-life policy. When you’ve settled on a type of policy to buy, here’s what you should do:

Compare Rates and Death Benefits From Multiple Providers

Don’t choose a policy from the first life insurance company you find. Even if you already have a relationship with the company, you could find a better policy elsewhere. While comparison shopping, pay attention to the death benefits and the monthly premiums to ensure that you find a policy that matches your financial goals and budget.

When comparing rates, be honest about your medical history. Different life insurance providers have different underwriting standards. You can’t get actionable quotes if you don’t disclose cancer, heart disease, stroke, or kidney disease. These conditions often mean more expensive premiums, and you may be declined coverage for a traditional policy.

Work With a Broker

Working with an insurance broker as opposed to an advisor from the issuing company has many advantages. While specific companies may offer decent plans for your age group, a broker has a far more expanded knowledge base on what all life insurance companies offer.  While you may think that you’ve found a policy that suits your needs and budget, there could very well be another one out there that has added benefits which you wouldn’t have known about otherwise.

Save Time, Get the Best Rate, Get the Best Plan

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Pay Attention to the Fine Print 

What does your policy say about missing premium payments? What about causes of death excluded from the policy?

Reading the fine print is the best way to ensure that you don’t get any bad surprises years down the line. There’s nothing worse than finding out that your insurance policy is void when you’re well beyond the approval range for a policy.

Explore the Insurance Rider Options

Insurance riders are add-on features that can make a policy more beneficial. Most insurance riders come at an extra cost. The options available will vary across providers. Some of the popular options include:

  • Child riders. This option takes care of a policyholder’s young children separately from the death benefits that go to the named beneficiary. Basically, it makes young children a part of the policy beneficiaries.
  • Long-term care riders. This option will cover the cost of care in a hospital or nursing home.
  • Accelerated death benefit riders. If you include accelerated death benefit riders, you can access a portion of the policy if you’re diagnosed with a terminal, critical, or chronic illness.

What Is the Age Limit for Life Insurance?

The age limit for purchasing life insurance is between 75 and 80 years old for most insurance companies. However, some may offer slightly higher limits while others may lower the limit on specific products to between 65 and 70 years.

Keep in mind that the average life expectancy in Canada is 80 years old. Providers will be less willing to sell a policy the closer you are to that age.

What Is the Difference Between Life Insurance and Funeral Insurance?

Life insurance pays death benefits to a beneficiary, and there is no limit to how the beneficiary can use the payout.

With funeral insurance, the payout goes to a funeral home directly to take care of any pre-agreed funeral expenses. The payout sum is only enough to cover the cost of the funeral. Most holders of life insurance policies don’t need separate funeral insurance.

Related Article

Every Canadian needs life insurance, and this article explains the top 3 benefits.

Find Out How Much Life Insurance Costs for a 60-Year-Old

Regardless of age, investing in a life insurance policy provides a safety net for family members and loved ones left behind in case of an unexpected death. Buying life insurance can be challenging at any age. However, it is even more difficult to navigate in your latter years. With different companies operating different underwriting regimes, it can be tough to know what’s practical and what isn’t.

At Alliance Income Services Corp. (AIS), our experienced advisors can help you find the ideal life insurance for 60-year-olds.

We have long-established relationships with the top insurance companies in Canada, including:

  • GMS
  • Manulife
  • Assumption Life
  • iA Financial Group
  • Green Shield Canada

Fill out the quote form to find out how much your life insurance policy will cost. We save you the leg work of complete due diligence for dozens of insurance products. Our advisors will evaluate your situation and offer the best policies on the market at the most competitive rates.

Request your free quote today.


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