Protect the people who depend on you

Why it matters

LIMRA also found that more than a third of Canadians overestimate the cost of life insurance by about three times. For a healthy non-smoker, term coverage is often far less expensive than people expect — the only way to know is to get a quote.

Term vs permanent insurance

How much coverage do you need?

Add up what your family would need, then subtract what's already in place:

• Income replacement — your after-tax income times the number of years your family would rely on it
• Debts — mortgage, car loans, lines of credit
• Final expenses — a traditional funeral in Alberta commonly costs about $7,500–$12,000; direct cremation can be under $2,000
• Future goals — children's education, a dependant's long-term care
• Minus existing coverage and savings. The CPP death benefit is a one-time $2,500; a surviving spouse may also receive a monthly CPP survivor's pension.

Coverage through work

Group life insurance is a great benefit, but it's rarely enough on its own:

• Coverage is often a flat amount (for example $50,000) or 1–2 times your salary.
• It usually ends when you leave the job; most plans allow only about 31 days to convert to an individual policy.
• Employer-paid premiums are generally a taxable benefit on your T4.

Personal coverage stays with you whatever happens at work, and it's priced on your health today.

How life insurance is taxed

• The death benefit paid to a named beneficiary is generally tax-free.
• Premiums paid personally are generally not tax-deductible.
• Cash value in a permanent policy that meets the federal "exempt" test grows tax-deferred. Withdrawals, surrenders or loans above the policy's adjusted cost basis can be taxable.
• For incorporated business owners, a corporately owned policy can pay out largely tax-free to shareholders through the capital dividend account.

Beneficiaries in Alberta

• Name a person, not your estate. A named beneficiary receives the money directly, typically within weeks. Money paid to your estate is exposed to estate creditors and delayed by probate (Alberta's probate fee is modest, capped at $525, but the process takes time).
• Creditor protection. Naming a spouse, adult interdependent partner, child, grandchild or parent of the insured — or making any designation irrevocable — generally protects the policy and its cash value from the owner's creditors.
• Minor children. In Alberta anyone under 18 is a minor. Without a trustee named, money for a child may be paid to the Public Trustee until age 18. Naming a trustee on the policy, or a trust in your will, keeps you in control of how and when the money is used.
• Keep it current. Review beneficiaries after marriage, separation, a new child or a death in the family.

Planning for a loved one with a disability

Life insurance and the RDSP work well together. Many Alberta families direct life insurance to an absolutely discretionary (“Henson”) trust for a child with a disability. Under AISH policy, assets held in a trust for a beneficiary are not counted, although income paid out of the trust may affect the living allowance. A permanent policy can fund the trust for life, while the RDSP collects government grants and bonds. Work with a lawyer to draft the trust — we'll coordinate the insurance side.

How buying works

Useful riders

Sources: CLHIA – Canadian Life and Health Insurance Facts, 2025 · LIMRA – Canadian coverage gap · Canada.ca – CPP amounts · Alberta.ca – assets of a minor · Canada Life – creditor protection · VAD – Henson trusts & AISH. Figures current for 2026; verified September 2026.