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Personal Canadian Insurance

Updated: May 30th, 2023

When moving to a new country, it’s vital to ensure you’re covered. Having adequate insurance ensures that you're looked after if bad things happen. While there are many types of insurance in Canada, the primary type of insurance to get when you start in Canada is to get personal insurance. Personal insurance can protect your family's financial future and give you the confidence to embrace every opportunity to live each day to the fullest.

There are multiple types of personal insurance, and which one you utilize can vary depending on individual circumstances. Generally speaking, insurance is a good idea if someone depends on you financially.

To help you start, this article will discuss some of the most prevalent types of insurance in Canada, how to apply for personal insurance, and why it’s an integral part of getting started in Canada.

Types of Personal Insurance in Canada

Types of Personal Insurance in Canada

Personal insurance is a contract that provides a binding guarantee that compensation will be paid in case of an injury, illness, or death. It is a type of insurance designed to protect individuals and their families from financial loss due to unexpected events. Personal insurance in Canada can include life insurance, home insurance, and other types of insurance that cover personal property and liability.

Life Insurance in Canada

Life insurance policies in Canada pay a death benefit if the person insured dies within a specific period or before reaching a certain age. There are two basic types of life insurance coverage: term and permanent.

Term life insurance provides financial protection for a specific period. Your coverage can be for a fixed period, such as 10 or 20 years, or until you reach a set age, such as 65. It pays a set, tax-free death benefit if the insured person dies within that period.

Term life insurance is generally more affordable than other life insurance policies, such as whole life insurance.

There are three types of permanent life insurance: whole life, participating, and universal.

Whole Life Insurance

A type of permanent life insurance policy that provides coverage for the entirety of your life. It offers guaranteed death benefits, cash value growth, and bundles as an investment vehicle. A portion of your premium pays for insurance; the rest goes into a savings/investment account managed by the insurer.

This is a good fit for those who want to leave a financial legacy to their heirs or dependents who rely on them financially. It is also a good option for those who want peace of mind knowing that their family will receive support upon death.

Participating Life Insurance

This insurance provides lifelong coverage, a tax-free payment to the beneficiary when the policyholder dies, and a cash value that can be accessed as cash. The policyholder's payments are pooled in a separate account with other policyholders, and the funds are professionally managed and may provide the policyholder with a dividend.

If you want the opportunity to earn annual dividends, participating life insurance may be a good option for you.

Universal Life Insurance

This two-part policy allows you to invest your insurance money while receiving coverage. You choose your investments, and wealth can accumulate tax-free, within limits set by the government.

You can access the money as long as there’s enough remaining to cover your monthly insurance cost and any cancellation charges, policy loans, and market value adjustments.

The policy also provides guaranteed, lifelong protection that lets you invest and build your wealth. The policyholder can choose who to leave their money to.

Life insurance is fundamental in Canada and should be the primary insurance you seek upon arrival.

Disability Insurance in Canada

Disability insurance in Canada provides financial protection to individuals and their families in case of an unexpected illness or accident that leaves them unable to work and earn an income.

Disability insurance can replace between 60% and 85% of your regular income, up to a maximum amount, for a specified time if you temporarily can't work. It can also give you a tax-free monthly benefit to replace your income and cover expenses if an illness or injury keeps you from working.

Disability benefits are tax-free financial recognition for the impact a service-related injury or disease can have on your life.

It is important to note that the specific terms and conditions of disability insurance policies can vary depending on the insurance provider and the policy itself.

Critical Illness Insurance

Critical illness insurance is insurance coverage that can help Canadians pay the additional costs associated with life-altering illnesses like cancer, stroke, heart attack, and dementia. The coverage will be a lump sum and act as a living benefit if you are diagnosed with a specified covered illness. This means you can use the payment to cover expenses related to your illness, such as medical bills, home care, or modifications to your home or vehicle.

Critical illness insurance usually pays a one-time lump-sum payment if you're diagnosed with a life-threatening illness. The amount of coverage and the specific illnesses covered can vary depending on the insurance provider and policy.

Your payment can be tax-free if you're diagnosed with a serious condition. The payment is usually made directly to you; you can spend it however you wish.

Long-Term Care Insurance

Long-term care insurance provides coverage if you cannot care for yourself and need assistance to manage daily living activities. Long-term Care insurance covers the costs incurred if you cannot care for yourself and Provides an income-style benefit if you become unable to care for yourself due to aging, an accident, illness, or deteriorated mental abilities.

However, Long-term care insurance is exclusive to seniors, and long-term care insurance can be expensive, particularly if you need to move into a care facility.

Supplementary/Extended Insurance

Canada is famous for having universal healthcare and, yes, healthcare in Canada can help cover basic medical and dental expenses. However, Canada’s healthcare may not cover all your medical needs as it primarily focuses on major surgeries and doctor and hospital visits. To supplement some of the shortcomings of Canada’s healthcare system, many Canadians will get Supplementary or Extended insurance.

This insurance, typically offered by private insurance companies, can cover a range of medical expenses, including prescription drugs, dental care, and vision care. The cost of these plans can vary depending on the level of coverage and the insurance company offering the plan.

Personal insurance in Canada provides a binding guarantee that compensation will be paid in case of an injury, illness or death, and can include medical, dental, vision and other health expenses.

A major aspect of personal insurance is ensuring that you have all of your eligibility criteria fulfilled and your resources gathered before you begin your application process. If you’re unfamiliar with Canada’s personal insurance system, the best way to make this process easier is to have an expert in Canadian processes like a Regulated Canadian Immigration Consultant (RCIC).

How to Get Personal Insurance in Canada

How to Get Personal Insurance in Canada

To get personal insurance in Canada, you can follow these general steps:

Step 1: Pick Your Insurance

Determine what type of personal insurance you need based on your circumstances. Some common types of private insurance include health, life, personal property, and disability insurance. Learn more about insurance in Canada.

Step 2: Research Local Insurance Companies

Research insurance providers and policies to find the best coverage for your needs. You can do this by searching online, asking for recommendations from friends and family, or consulting with an insurance broker. Currently, the some of the top insurance companies in Canada are:

  • Manulife
  • Great-West Lifeco
  • Desjardins
  • Sun Life Financial
  • Fairfax Financial
  • Industrial Alliance
  • Co-operators
  • Aviva
  • TD Insurance
  • RBC Insurance

However, the best insurance companies often depend on where in Canada you’re living so it’s vital to research the multiple insurance companies from your local area to ensure you find where to get the best rates.

Step 3: Apply for Coverage

Once you have identified a policy that meets your needs, you will need to apply for coverage. This typically involves filling out an application and providing information about your health, lifestyle, and other relevant factors.

Step 4: Gather and Submit Documentation

Depending on the type of insurance you are applying for, you may need to undergo a medical exam or provide additional documentation to support your application.

Step 5: Pay The Premiums

Once your application is approved, you must pay the premiums associated with your policy to maintain coverage.

It's important to note that the process of getting personal insurance can vary depending on the type of coverage you need and the insurance provider you choose. Therefore, it's recommended to speak with an insurance professional to guide you through the process and ensure that you get the coverage you need.


What’s the Difference Between Disability and Critical Illness Insurance?

Disability Insurance provides a monthly benefit to replace a portion of your income if you're unable to work due to an injury or illness, while Critical Illness Insurance pays a lump sum benefit upon diagnosis of a covered critical illness.

What are Some Common Mistakes to Avoid When Buying Life Insurance?

Some common mistakes to avoid when buying Personal insurance include:

  • not buying enough coverage,
  • not reviewing your policy regularly, and
  • not being honest on your application.

It's important to review your policy document to understand what risks your policy covers, how much it will pay your beneficiaries, and under what circumstances.

Start Your Life in Canada the Right Way

Start Your Life in Canada the Right Way

Personal insurance in Canada can provide financial security and peace of mind in case of unexpected events. Personal insurance can also help manage debts, handle funeral costs, and plan for your children's future.

It’s vital to ensure you’re covered when you start your life in Canada so that you can enjoy starting your new life in Canada in safe hands.

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