Life insurance premiums aren’t arbitrary. Insurers price each policy based on the statistical likelihood they will pay a claim, and on how much it will cost them when they do. Understanding what moves your premium — up or down — helps you make better decisions when you shop and gives you some control over what you pay.
Age: The Factor You Can’t Change, Only Manage
Age is the most significant driver of life insurance cost, and the one you can’t negotiate. Mortality risk rises with age, so premiums rise with age — consistently, predictably, and substantially.
The practical implication: every year you wait to buy, coverage costs more. A healthy 30-year-old pays significantly less for the same policy than a healthy 45-year-old. The premium difference between applying at 35 and applying at 40 can be meaningful on a 20-year term policy. Applying while young and healthy is consistently the lowest-cost approach.
Health and Medical History
Insurers assess your current health, medical history, prescription history, and family history of serious illness. Based on this assessment, you’re placed into an underwriting category — often labelled preferred plus, preferred, standard, or substandard (rated).
The better your health profile, the lower your premium. A healthy individual with no significant history qualifies for preferred rates. Conditions like high blood pressure, diabetes, or a history of cancer may result in higher rates or, in some cases, a decline for certain types of coverage.
The key point: underwriting happens when you apply, not when you claim. Your health at the time of application sets your premium for the life of the policy. A condition that develops after you’re approved doesn’t affect your existing coverage.
Smoking Status
Smokers pay substantially higher premiums — often significantly more than non-smokers for equivalent coverage. The definition of “smoker” varies by insurer but typically includes cigarettes, cigars, chewing tobacco, e-cigarettes, and sometimes cannabis.
Most insurers have a non-smoker qualification period: if you have been completely tobacco-free for a defined period (commonly one to two years), you may qualify for non-smoker rates. If you quit after purchasing a policy as a smoker, many insurers will reclassify you and reduce your premium if you can demonstrate cessation for the qualifying period.
Type of Coverage
Term and permanent life insurance are priced on fundamentally different bases.
Term insurance is less expensive because it is temporary and most policyholders outlive their term — meaning the insurer often collects premiums without ever paying a claim. The cost reflects the probability of dying within the specific term window you’re insuring.
Permanent insurance is significantly more expensive because it is guaranteed to pay out eventually, and because it funds a growing cash value account alongside the death benefit. You’re paying for lifelong certainty and a savings component, not just a temporary death benefit.
For the same coverage amount, the premium difference between term and permanent is substantial. This is why term is often the starting recommendation for straightforward income and mortgage protection, and permanent coverage is considered when the lifetime guarantee and cash value serve a specific purpose.
Term Length
Within term insurance, longer terms cost more. A 30-year term costs more than a 20-year term, which costs more than a 10-year term, because each extends the window of risk the insurer is covering. The question to ask is how long you actually need the coverage — matching the term to the obligation (a mortgage, the years until children are independent) avoids paying for coverage beyond when you need it.
Coverage Amount
More coverage costs more, but not proportionally. Larger policies often have lower rates per unit of coverage due to insurer efficiencies. Two people in identical health profiles may pay less per thousand dollars of coverage on a larger policy than a smaller one.
Gender
Statistically, women in Canada have longer life expectancies than men, which typically results in somewhat lower premiums for the same coverage. This varies by insurer and is one factor among many.
How to Get the Best Rate
Apply while you’re young and in good health — that combination produces the best available rates and the widest choice of insurers. Compare multiple insurers, because rates and underwriting philosophies differ meaningfully between companies. A broker who works with 25 or more Canadian insurers can compare the market and match your profile to the insurer most likely to offer competitive terms.
About Ottawabroker
Ottawabroker is an independent insurance brokerage serving Ottawa-Orleans, working with 25+ Canadian insurance providers to compare life insurance rates across the market for clients in Ottawa and beyond. Services include life, disability, critical illness, and health/dental coverage. Bilingual service (English/French), 5 days per week, 9 AM–9 PM.
Contact: (613) 863-3278 | (613) 370-6226 | ottawabroker.com
Publication Date: August 2026
Insurance Disclaimer
This article provides general educational information about life insurance pricing for Canadians. It is not personalized financial, legal, tax, or insurance advice. Insurance products, premium rates, underwriting criteria, and regulations vary by insurer, province, and individual circumstances. The information provided is current as of the publication date but may change. Always consult with a licensed insurance broker to assess your specific situation before making insurance decisions.