Do I Need Funeral Insurance in Canada?
While some life insurers offer funeral insurance in Canada, we see funeral insurance as something that comes with any life insurance policy. Let us explain…
Life insurance is an important tool when it comes to providing financial protection for your loved ones in the event of your death – meaning they may not have to worry about unpaid debts, a gigantic mortgage, or the responsibility of paying for your funeral.
What is funeral insurance (Canada)?
Funeral insurance could easily be called funeral expense insurance – because that’s exactly what it is: it’s a type of final expense insurance that covers funeral costs. Funeral expenses typically include the fee for a funeral parlour’s services, burial or cremation costs, and any expenses related to the ceremony. When you add it all up, it’s not terribly surprising that a funeral can cost an average of $9,150 (and even up to $20,000) in Canada (source) – and that many Canadians would not want their loved ones to pay this amount out of pocket. That’s where funeral insurance comes in.
But here’s the million dollar question: If you could cover your funeral plus any other outstanding debt with a single policy, wouldn’t you go for it? Let’s consider the options:
Term Life Insurance
Term life insurance is a straightforward and affordable life insurance policy that provides coverage for a specific term. The typical time periods offered by most carriers are ten years (term 10 life insurance), 20 years (term 20 life insurance), and 30 years (term 30 life insurance).
As a policyholder, you pay a premium (i.e., the amount you pay for an insurance policy) to the insurance company, and in return, your beneficiaries (i.e., the person(s) you choose to receive your life insurance payment in the event of your death) will receive a death benefit (i.e., a payment made to designated family members or other loved ones) if you were to pass away during the selected term.
Once the policy term ends, the coverage ends – which means you would need to renew or convert your policy if you still require coverage.
Participating Whole Life Insurance
Whole life insurance is a permanent life insurance policy that provides coverage for your entire lifetime, as long as you continue to make your payments until age 100. This type of policy also comes with an investment component, giving you the potential to earn dividends that can be used in different ways. For example, they can be used to:
- buy an additional layer of life insurance
- earn more interest on your earnings, or
- withdraw your money as cash1
Not to mention, whole life policies also come with a guaranteed cash value2 component that can be:
- borrowed3 to help pay for life events (e.g., tuition fees, wedding, down payment on a home), or
- used to pay your premiums while you are still alive
Term to 100 Life Insurance
Term to 100 life insurance is another form of permanent life insurance that provides coverage for your entire life where payments are only required until your 100th birthday. But unlike whole life insurance, it doesn’t come with an investment component, which makes it significantly more affordable.
Like term insurance, Term to 100 is a straightforward option that can be a good choice for those looking for an affordable policy that will help cover funeral expenses, taxes, and other final expenses. Plus, Term to 100 also gives you the opportunity to lock in affordable coverage later in life – leaving your loved ones with a legacy, rather than debt.
Why is funeral insurance in Canada important?
Like everything else these days, funerals are becoming more and more expensive. With rising costs everywhere we turn, many Canadians worry about burdening their families with end-of-life expenses. Funeral insurance in Canada provides peace of mind to policyholders, knowing their family will not have to pay out of pocket for the funeral parlour, their burial, and the reception.
The good news is that life insurance can also be used to cover funeral expenses – but it comes with the flexibility to cover so much more, like any outstanding debt you may have, your mortgage payments, or the cost of raising children solo. So while funeral insurance only covers expenses related funeral costs, life insurance does all that… and more.
Of the various life insurance products available to you, Term to 100 life insurance may be the option you are looking for due to its long-term coverage and affordability.
Benefits of funeral insurance vs. Term to 100 insurance
It can be confusing knowing which option to go with, especially considering they both cover end-of-life expenses. It’s always best to consult with an advisor you trust before making a big decision like this one, but we’ve laid out some of the main differences a little more clearly in the table below.
| Funeral insurance in Canada | Serenia Life Term to 100 insurance | |
|---|---|---|
| Coverage | Funeral insurance can cover end-of-life expenses such as: - funeral service costs - embalming and transportation - burial or cremation - reception costs - legal and probate fees | Term to 100 life insurance can cover end-of-life expenses, and so much more. Examples include: - mortgage payments - outstanding debts and loans - taxes upon death - or whatever the beneficiary chooses |
| Affordability | Very affordable – since it’s a smaller amount of coverage, the cost tends to be less than more comprehensive life insurance options, like term, whole life, or term to 100. | Affordable – while not cheaper than funeral insurance, you get more bang for your buck with Term to 100 life insurance. Plus, it’s significantly more affordable than participating whole life insurance (the other permanent option). |
| Flexibility | Not flexible – coverage is specific to funeral expenses. | Extremely flexible – the beneficiary can decide how they would like to use the money. |
| Ability to customize | Yes – you can choose to purchase pre-need funeral insurance for a pre-arranged funeral at a fixed cost. | Yes – at the time of purchase, you can choose to add on any number of optional benefits (also called riders). |
| Claims | Due to how basic this type of coverage is, it's typically quicker to process than a life insurance claim. The approval rate is dependent on which insurer you go with. | Serenia Life’s incredible claims history is streamlined, quick, and the approval rate consistently exceeds 99.9%4. |
| Other benefits | Dependent on the insurer | At Serenia Life, we have a growing collection of member benefits, including a free digital will, funding for charitable work at home or overseas, $1,000 in bereavement counselling for beneficiaries, and so much more! |
How to choose the best funeral insurance in Canada
When it comes to choosing the best funeral insurance in Canada, start by following these three steps.
Step 1. Assess your needs and budget
Make sure you’re clear on what you’d like your insurance to cover, and figure out how much coverage you’ll need. You can use our simple calculator to do the math. Once you’ve got an idea of this number, get a free quote to understand if the cost fits into your budget.
2. Compare different providers
Make sure you’re getting the best coverage for you by doing some comparison shopping. You can do this by requesting a quote from a few different providers, reading online reviews, or even asking friends and family who they trust for their end-of-life insurance needs.
3. Speak with an advisor
It’s always a good idea to speak with an expert before making a final decision. A Serenia Life advisor can walk you through the policy terms and conditions to ensure you’re clear on what is and isn’t part of your plan.
Why choose Serenia Life for funeral Insurance?
As a member-based organization with roots that go back nearly 100 years, we encourage kindness by sharing a portion of our profits through community outreach, fundraising, and unique member benefits that help Canadians support their family, their community, and the causes they care about. The more we grow, the more we can give.
We provide members with access to a growing collection of member benefits that make a positive impact on their lives and the lives of others, such as:
- $1,000 post-secondary scholarships
- $250 seed funding towards fundraising events
- Free digital wills (value: $189), or $150 reimbursed when drafting/updating a will through a lawyer
- And much more
View a full list of our member benefits.
Term to 100 life insurance is funeral insurance
If you really think about it, Term to 100 life insurance is funeral insurance… but it has a whole lot more to offer! So if you see the benefit of getting more comprehensive funeral insurance, like Term to 100, you may be ready to speak with one of our friendly advisors. Fill out the form below to book a no-obligation call to lean more.
Disclaimers
1Policy withdrawal is an option to withdraw money from the accumulated cash value of the policy if Paid-up Additions or Accumulated Dividends is the selected dividend option. Withdrawals reduce the total cash value, affects future growth, and reduces the death benefit. If the withdrawal is only up to the amount that is paid in premiums (known as the adjusted cost basis), there won’t be taxes. Otherwise, there would be taxes on the portion that is more than the adjusted cost basis.
²Cash values are accessible via a withdrawal, policy loan, or surrender. These may be subject to taxation and a tax slip may be issued. Accessing the policy’s cash value will reduce the available cash surrender value and death benefit.
3Policy loan is an easy way to access the accumulated cash value of the policy. A variable interest is charged on the amount borrowed. This may result in taxable consequences. Loan can be repaid at any time. Upon death and the loan is unpaid, the outstanding balance including any accumulated interest will be deducted from the total death benefit, with the remainder paid tax free to the beneficiary(ies).
4Life insurance claims statistics 2018-2023
