Before you buy life insurance: 5 things you must know
How advisor commissions really work, how to find your real coverage number, when term beats permanent — and the questions that protect you before you sign anything.
By the SecureMyFamily Team · October 18, 2026 · 8 min read
Your advisor is paid from your premium
An insurance advisor is paid a commission, and that commission is calculated as a percentage of your premium. The higher your monthly premium, the more the advisor earns. That’s true for us, and it’s true for every advisor in Canada. Now watch what that does to the advice you might get:
Does that make permanent insurance bad? No. Sometimes it’s exactly the right tool, and we’ll show you when below. But it does mean this: if an advisor recommends a $300-a-month permanent policy before asking detailed questions about your life, you should wonder whose outcome they’re optimizing for — yours, or theirs.
On many permanent policies, the first-year commission can run as high as 100% of the first year’s premium. So on that $315-a-month whole life policy — $3,780 a year — the advisor can earn up to $3,780 from your first year alone. On the $35-a-month term policy ($420 a year), even the same percentage would pay just $420 — and term commissions are usually a smaller percentage to begin with. Same client, same meeting, same paperwork. The pay for recommending one product over the other can differ by thousands of dollars.
Figure out how much coverage you need — before anyone sells you a number
The most common mistake we see isn’t buying the wrong type of insurance. It’s buying a random amount — a round number someone suggested — that has almost nothing to do with your actual life. Your real number comes from your real obligations:
Income to replace
If your family depends on your paycheque, how many years of it would they need? A common starting point is 10–12× your annual income.
Debts to clear
Mortgage balance, car loans, credit cards, lines of credit — anything you’d want gone so it never becomes their problem.
Future costs
Childcare, education, and the expenses your family will face over the next 10–20 years while the kids grow up.
Final expenses
Funeral and end-of-life costs, covered in advance so your family isn’t scrambling at the worst possible moment.
Then subtract what you already have: savings, investments, and any coverage through work — keeping in mind work coverage usually ends when the job does, and it’s often only 1–2× your salary.
Don’t guess. Calculate it.
Our free calculator walks you through exactly this math in about a minute. Whatever number it gives you is a starting estimate — but it’s your number, based on your life. Walk into any advisor conversation with it, and it’s much harder for anyone to sell you a policy sized for their commission instead of your family.
Term vs. permanent: when each one is actually the right answer
TERM LIFE
For needs that end
Covers you for a set period — 10, 20, 30 years. Inexpensive because it’s pure protection for the years your family needs it most.
Usually right for:
· Replacing income while your kids are growing up
· Covering a mortgage and debts that will be paid off
· Real protection on a real-world budget
PERMANENT LIFE
For needs that never end
Whole life or universal life — covers your entire life and can build cash value. Costs more because the insurer knows it will eventually pay.
Usually right for:
· Final expenses, guaranteed whenever they happen
· A dependent who needs lifelong support
· Estate taxes, a buy-sell agreement, a guaranteed legacy
Notice what’s not on the permanent list: most families’ basic income protection. For the average young family, buying enough permanent coverage to replace an income is simply unaffordable — and a too-small permanent policy is worse than a properly sized term one. Want the deep dive? Read our guide to term vs. whole vs. universal life insurance.
Often, the best answer is a combination of both
Here’s what honest advice often looks like in practice: a large term policy for the years of heavy responsibility, plus a small permanent policy for the needs that last forever. One family’s $600,000 need, structured two ways:
That’s the conversation a good advisor will have with you — including the cheaper option, explained fairly.
Ask your advisor these 8 questions before you sign anything
Print this list. Ask them of us, ask them of anyone. A good advisor will welcome every one.
How are you paid, and how much do you earn if I buy this policy? They may not give an exact dollar figure, but they should explain the structure honestly.
Why this amount of coverage? Show me the math behind it. The number should come from your debts, income, and family — not a round figure.
What would the same coverage cost as term insurance — and why aren’t you recommending that? Sometimes there’s a good reason. Make them say it out loud.
Is any part of this policy guaranteed — and what part isn’t? With permanent policies, ask which values are guaranteed and which are illustrations that can change.
What happens if I stop paying in 5 or 10 years? Ask about surrender charges and what you’d walk away with. Life changes; know your exit cost.
Do you work with one insurance company or compare several? An advisor who can only sell one company’s products can only recommend one company’s products.
What would you buy if you were in my exact situation — and why?
Can I see all of this in writing before I decide? Real advice survives being written down. Pressure doesn’t.
Know your number. Then buy on your terms.
Life insurance itself is simple: your family loses your income, the policy replaces it. What makes it confusing is that the person advising you is paid more when you spend more. So know your number before the meeting. Know when term is enough, when permanent earns its cost, and when a blend is best. Ask how your advisor is paid. Then buy — confidently.
How we’re paid: we’re licensed advisors, and when you buy a policy through us, the insurance company pays us a commission — you never pay us directly, and comparing quotes is free. We compare 20+ Canadian insurers on price, features, service, and claims process to find the best value — not just the cheapest price. And if we can’t help you, we’ll tell you that too.
Quick answers
How much life insurance do I need in Canada?
A common starting point is 10–12 times your annual income, plus your debts and future family costs, minus savings and any coverage you already have. Our free calculator works out a personal estimate in about a minute.
Is permanent life insurance ever worth it?
Yes — for needs that never expire: final expenses, a lifelong dependent, estate taxes, or a guaranteed legacy. For income replacement during your working years, term insurance usually gives far more protection per dollar.
How are life insurance advisors paid in Canada?
Advisors are paid a commission by the insurance company, calculated as a percentage of your premium. You don’t pay the advisor directly — but because commission scales with premium, it’s fair to ask how your advisor is paid on any policy they recommend.
Can I combine term and permanent life insurance?
Yes, and it’s often the smartest structure: a larger term policy for your high-responsibility years plus a smaller permanent policy for lifelong needs like final expenses.