At What Age Should You Stop Paying for Life Insurance in Canada?

Key takeaway

There is no universal age to stop paying for life insurance in Canada. The right time depends on whether your financial obligations (mortgage, dependents, debts) have been eliminated and whether your retirement savings are sufficient to support your surviving spouse without a death benefit. Most Canadians can consider dropping coverage between ages 60 and 70 if their mortgage is paid, children are independent, and retirement savings are adequate.

The obligation test: when coverage is no longer needed

Life insurance is needed when someone depends on your income or your unpaid labour. The core obligations are mortgage payments, dependent children's living and education costs, spousal income replacement, outstanding debts, and final expenses.

When all of these are eliminated — mortgage paid off, children independent, no debts, sufficient retirement savings — the primary need for life insurance ends. For many Canadians, this happens between 60 and 70.

Evaluating your situation at age 55 to 60

At 55 to 60, most Canadians still have some mortgage remaining and may have children in post-secondary education. If your 20 or 30-year term policy is approaching expiry, this is the time to evaluate whether renewal or conversion is worth the cost.

If your mortgage will be paid off within 5 years and children are nearly independent, letting a term policy expire may be appropriate. If obligations remain, consider a smaller replacement policy to bridge the gap.

The retirement inflection point at 65

By 65, many Canadians are retired or approaching retirement with CPP, OAS, and workplace pensions providing baseline income. If your spouse would have sufficient income from these sources plus retirement savings, the need for life insurance drops significantly.

However, if your spouse depends on your pension and that pension has no survivor benefit (or a reduced one), life insurance may still be necessary to bridge the income gap.

When you should keep coverage beyond 65

Keep paying for life insurance beyond 65 if you have a lifelong dependent (such as a child with a disability), want to leave a tax-free estate or equalize an inheritance among heirs, have a corporate insurance strategy with CDA benefits, owe significant debts that would burden your estate, or want to cover Ontario probate fees (1.5% on estates over $50,000).

These permanent needs require permanent coverage — not term — so the cost of maintaining them is higher but serves a specific, ongoing purpose.

The cost of keeping coverage too long

Paying for life insurance you no longer need diverts money from retirement spending, travel, healthcare, or legacy gifts you could make while alive. Term insurance at 70+ is extremely expensive — $500,000 of coverage can cost $300 to $800+/month.

This money is almost always better deployed elsewhere if the coverage need has genuinely ended.

A step-by-step decision framework

Step 1: List all financial obligations that would fall to your spouse or estate. Step 2: Calculate whether retirement savings, pensions, and government benefits cover those obligations without a death benefit. Step 3: If yes, the insurance can be dropped. If no, calculate the gap and carry only enough coverage to fill it.

Review this analysis every 2 to 3 years as obligations change. The goal is right-sized coverage — not too much, not too little — at every life stage.

Frequently asked questions