You can often apply for Canadian life insurance when you’re a newcomer. However, your immigration status won’t determine a consistent set of national rules about which products are available, coverage limits and waiting periods. Each company has its own residency, financial and medical underwriting criteria, so if one says no or offers different conditions, you’ll want to know what to do next.
The article draws on IRCC’s guide to Canadian immigration status documents, IRCC’s permanent resident status guide, the Financial Consumer Agency of Canada’s life insurance guide and FSRA’s guide to working with a life insurance agent or company.
Can Newcomers Get Life Insurance in Canada?
Permanent residents, protected persons, holders of certain work or study permits, and other foreign nationals may be considered for coverage.
Approval, policy type, coverage amount, cost and requirements may vary depending on the applicant and the insurer. Temporary residents are not automatically refused, just as permanent residents are not automatically approved.
Coverage Amounts and Eligibility for Newcomers
There’s no standard table to help you work out how much coverage you can buy. Insurers will look at the amount you’re requesting and determine if it’s reasonable based on your financial situation, such as income, debt, dependants, assets and the reason you’re getting the policy.
- Government-issued photo ID
- Valid immigration documents, if requested
- Contact and mailing information in Canada
- Occupation or school information
- A form of premium payment that’s acceptable to the insurer
- Information about debts and family or financial responsibilities
- An estimate of the amount of coverage needed, such as income replacement, family protection and debts
- Details about foreign assets
- Current and previous doctors’ names and contact information, both in and outside Canada
- Medical reports, tests, medication information, diagnoses, treatments and approximate dates
- Details about previous and future travel
- Information about previous countries you’ve lived in and current citizenships
- Intent to move back to another country during underwriting, if applicable
You may be asked for medical reports from outside Canada. Medical reports from other countries can be expensive to obtain or translate.
Before paying for translations of medical reports, call the insurer to determine which reports they’ll require. Find out which languages are acceptable, who may translate the records and what formatting is required. Having this information will speed up the underwriting process.
Types of Life Insurance Available for Newcomers
| Policy type | What it does | Question for a newcomer |
|---|---|---|
| Term life | Covers a stated period and normally has no cash value | Does the term match your work, debt or family-support period, and what happens at renewal? |
| Whole life | Provides permanent coverage and commonly includes cash value | Which values and premiums are guaranteed, and can you maintain the cost? |
| Universal life | Permanent insurance with a policy account whose results depend on the contract’s terms and options | What happens under lower returns, higher insurance costs or a move outside Canada? |
| Simplified or guaranteed issue | Some products ask fewer health questions and require no medical evidence | How do the maximum coverage amount, graded death benefit, waiting period, exclusions and premiums compare with fully underwritten coverage? |
Read More: Compare Life Insurance Options in Canada
Review Language, Consent and Foreign Records
Ask for any term of the policy you don’t understand to be explained to you in a way you understand.
If someone is interpreting for you, make sure the insurer is okay with this. Check all the answers yourself. Never sign an incomplete application, and don’t allow someone else to make assumptions about medical conditions, medications or dates.
FSRA points out that by signing the application, you may be giving the insurer permission to contact your doctors, hospitals or the Medical Information Bureau for medical histories.
Ask for a copy of your application and keep it with your issued policy. Make sure all the information is correct, including names, addresses and immigration status. Check the beneficiary designation, premium-payment provisions, health information, exclusions and temporary or conditional coverage.
If the designated beneficiary resides outside Canada, additional issues may arise, including documentation, beneficiary identity proofing, tax considerations, claim procedures and the currency of claim payments.
When the policy owner, beneficiary or source of the premium is outside Canada, you may wish to seek advice from legal or tax professionals in the relevant countries.
Read More: Read How Health Records Affect Life Insurance
Life Insurance Considerations for Newcomers
You can only compare written quotes for the same type of insurance, amount of coverage, length of term, person and underwriting risk category to see who has the best price.
Age
Apply using your correct date of birth. Age affects the likelihood of making a claim, so in most cases it affects the cost of your insurance.
There is no set price for people under 30. Work out the total cost over the whole term, including renewal prices where applicable, when assessing policies.
Health Status
Don’t assume a pre-existing medical condition automatically excludes you from coverage, as your health history affects more than exclusion decisions, including the medical records requested, available benefits and premiums. Be thorough and complete.
Lifestyle Choices
It is important that you accurately describe what you do and plan to do. Factors such as where you’ve been and where you live, smoking, occupation, alcohol or drug use, hobbies, sports and driving record may be considered.
Coverage Amount
A larger death benefit usually costs more and may require stronger financial evidence. Use a written needs calculation, including support sent abroad, instead of requesting the largest amount a marketing page says may be available.
Type of Life Insurance
Term coverage generally has a lower initial premium than permanent coverage for the same death benefit. Permanent policies may add cash value and guarantees, but compare the premium you can sustain if your job, permit or country of residence changes.
If an Insurer Postpones, Limits or Declines the Application
Ask for more information about the underwriting decision. Find out why you received that decision. See whether providing more documentation, information about how long you’ve lived in Canada, or plans regarding your immigration status could change the decision.
- If there are errors or inconsistencies, follow the insurer’s process to have them corrected.
- One decision does not necessarily reflect the decisions of other companies. Ask your agent, broker or other insurance companies about their current guidelines.
- Compare guaranteed-issue, fully underwritten and simplified-issue products. Consider waiting periods, exclusions, benefit limits and cost.
- Keep copies of applications and outcome decisions. Future applications will probably ask if your insurance was ever declined, rated or postponed.
Read More: See How to Seek Life Insurance After a Coverage Denial