Life insurance is rarely a topic that Canadians like to think about, talk about — or even do anything about for that matter.

Recent statistics show

  • Quebec’s average coverage is lower than the national average ($374,000 vs. $431,300).
  • Quebecers tend to get life insurance later in life (median age 43 vs. national average 41).
  • Nearly half (48%) rely on employer-provided coverage.

One of the biggest problems is many consumers simply have no idea how much life insurance they need or the best place to get it.

So, who needs insurance?

Simply put: If you have anyone in your life who depends on you financially or to whom you would like to leave a gift, you need life insurance. While many Canadians get life insurance policies through their job, The coverage is usually lower than individual policies costs more, and is only in place while they’re employed. According to 2021 data released by IPSOS. In its survey, A quarter (26%) of Canadians are not confident their family would be able to pay for the mortgage/rent/housing costs if they were to pass away.

So how much insurance is enough?

Some experts say you should have enough life insurance to cover five to 10 times your annual income (especially if you have a young family), but often that’s just a guess. The answer really depends on how much money your family and/or dependents will need after you’re gone.

There are three key steps to take to determine the amount of life insurance that is right for you:

Evaluate your family’s needs. How much money does it take to run your household? Do you have unpaid bills, a mortgage balance and/or outstanding debts? Don’t forget to add funeral expenses and possible estate taxes to the mix. Life insurance policies can pay immediate expenses, including medical costs, as well as funeral bills, taxes, mortgage payments/balance and other debts. The equivalent of all of that will get you close to the amount of life insurance you may need.

Consider future financial obligations. You should also have enough coverage to pay for future financial obligations. If you intend to help pay for college for your kids, say, factor in pending tuition costs and fees as well. Outline your family’s cash-flow needs as well as financial goals. Add it all up to figure out the estimated amount of money that your survivors would need.

Tally up the resources. Now look at the money that would be available. What is your spouse’s income? Do you have long- and/or short-term savings? Add up the balances in your RRSPs, TFSAs, RESPs education savings plan, emergency reserves and estimated survivor benefits, as well as any existing life insurance policies (perhaps through your employer).