Women pay less for life insurance than men of the same age and health status. But why is that the case? Insurance companies in Canada view women as lower risk and thus charge them less for coverage for several vital reasons.
This article will explore the major factors that result in women getting lower life insurance rates, including life expectancy, health conditions, risky behaviours, and occupational hazards.
We’ll also look at some example premium quotes to illustrate the real-world cost difference for men and women. Gaining a better understanding of how gender impacts pricing can help educate women on why they need to seek life insurance and close the coverage gap.
Women Pay Less for Life Insurance because Women Have Longer Average Life Expectancies
Actuarial Data Shows Women Live Longer
One primary reason women pay less for life insurance than men is that they have longer average life expectancies than men. According to Statistics Canada, the average life expectancy for a Canadian woman is 84 years, compared to 80 years for a man.
Insurance companies heavily rely on actuarial data and mortality tables to forecast the life expectancy of applicants based on factors like age, gender, and health. With women expected to live approximately 4-5 years longer on average, insurers are likely to pay out claims later for them. This makes them lower risk, and their life insurance premiums are priced accordingly.
Lower Risk of Earlier Payouts
Since female policyholders are more likely to live longer lives, there is a reduced chance insurance companies will have to pay out claims to women earlier in the policy term. Earlier payouts lead to losing money on insurance companies’ policies. The tendency for women to outlive men by over 4 years makes them less risky and less likely to die prematurely while holding a policy.
Life Expectancy Gap Closing But Persists
According to population studies, the gap in life expectancy has narrowed over the last few decades but remains significant. This means the age advantage will continue to grant women lower insurance rates for the foreseeable future. However, individual lifestyle choices also play a major role in longevity.
Women Pay Less for Life Insurance because Women Engage in Fewer Risky Behaviors
Risky Behaviors Linked to Lower Life Expectancy
In statistical studies, certain behaviours are linked to lower life expectancies. Men have higher rates of engaging in many high-risk behaviours:
- Smoking
- Binge drinking
- Drug use
- Dangerous hobbies
Since these behaviours increase the risks of developing fatal health conditions like cancer, heart disease and stroke, Canadian men face higher mortality rates at younger ages and pay more for life insurance in Canada as a result.
Insurance Pricing Reflects Lifestyle Choices
The insurance application process considers lifestyle choices when evaluating applicants. Hazardous hobbies, tobacco and alcohol use, recreational drug use, and any criminal history must be fully disclosed. This allows insurers to identify individuals engaged in behaviours that pose increased mortality risks and price policies accordingly through higher premiums.
Paying More to Cover Added Risks
Those who frequently engage in dangerous activities and substance use must pay higher premiums, as they are reasonably expected to have a lower life expectancy. According to national data, this helps explain the pricing advantage women maintain over men since women partake less in risky behaviours.
Women Pay Less for Life Insurance because Women Have Lower Rates of Certain Health Conditions
Gender Gap in Fatal Health Conditions
There are significant differences in the rates at which men and women develop certain potentially fatal health conditions.
- Heart disease
- Stroke
- Diabetics
- Cancer
With lower incidences of these top causes of death, women’s premiums are justifiably priced lower than men’s at a given age and health status.
Pregnancy No Longer High Risk
Historically, life-threatening complications from pregnancy and childbirth led to higher mortality rates among women of childbearing age. However, modern medicine has drastically reduced these risks in Canada and other developed countries. Today, normal pregnancy is not considered high risk for insurance purposes for women with access to quality healthcare.
Insurers Assess Individual Health
While the overall rates of these conditions are lower among women in Canada, individual medical results from lab tests, exams, and health history questionnaires allow insurers to identify anyone with above-average health risks for their age and gender. Less healthy applicants pay higher rates, regardless of being male or female.
Women Pay Less for Life Insurance because Canadian Women Work in Safer Occupations
High-Risk Jobs Linked to Lower Life Expectancy
Workplace fatality statistics reveal a significant gender discrepancy in Canada:
- Approximately 93% of all workplace fatalities occur among men
- The leading causes are motor vehicle accidents, being struck by objects, falls, and assaults
Source: https://www.bls.gov/iif/oshwc/cfoi/cfoi2006_13.pdf
High-risk occupations dominated by men include:
- Construction workers
- Loggers, fishers, and farmers
- Aircraft pilots
- Roofers and structural iron and steel workers
- Truck drivers
- Miners
- Power linemen
The hazardous nature of these vocations contributes to lower average life expectancy for men working in them and higher insurance rates as a result.
Insurance Pricing Reflects Occupational Hazards
Life insurance applications in Canada require listing your occupation industry and exact duties. Applicants working in provably high-risk roles will face increased premiums or exclusions to account for the greater risk of fatal accidents on the job. Safer clerical roles allow women to qualify for lower rates.
Paying to Match Voluntary Risks
Pursuing the most dangerous careers is almost always voluntary. It is reasonable to factor in the increased mortality risks from high-risk jobs into insurance pricing through proportionally higher premiums. Women’s tendency toward safer, less hazardous occupations results in tangible financial savings on insurance.
Comparing Life Insurance Premiums for Men and Women
Here’s an example of the premium difference using quotes on 10-year term policies with $1 million in coverage from Sun Life, one of Canada’s major insurers. In this example, both applicants are non-smokers from Ontario.
These quotes don’t include accidental death or critical illness insurance. Here are the monthly premium quotes for men and women at various ages:
| Age | Men | Women | Difference |
| 30 years old | $74.88 | $59.12 | 21% lower for women |
| 45 years old | $135.92 | $104.40 | 23% lower for women |
| 60 years old | $574.64 | $376.28 | 34% lower for women |
These assume similar health profiles. Applicants complete medical exams and questionnaires about health history and risks.
Based on the quotes, women pay 21% less at age 30, 23% less at 45, and 34% less at age 60 compared to men. Premiums vary by policy type, length, coverage amount, and individual factors.
With larger coverage amounts, the premium difference typically increases. Women benefit from proportionally greater savings with higher coverage policies.
Why Women Need Life Insurance Too
Women may believe that lower rates mean they need less coverage. But life insurance is crucial for:
- Replacing lost income if a household’s primary earner passes away
- Covering final expenses like funeral costs
- Paying off a mortgage and other debts
- Funding college savings for children
- Providing family members with financial stability
Just because rates are lower does not mean women require less insurance protection. The needs remain identical for men and women, while women simply enjoy lower rates.
Canadian women have a moral duty to seek out the right level of affordable life insurance made accessible by gender-based discounts. Taking advantage of preferential pricing protects your loved ones from preventable financial devastation.
Closing the Life Insurance Gender Gap
Despite lower rates, Canadian women remain far less likely to carry individual life insurance policies. Canada’s insurance gender gap persists partly due to lack of education on:
- The financial vulnerabilities life insurance addresses
- The measurable mortality differences granting women lower rates
- Today’s affordable and accessible coverage options
Awareness that female premiums range 15-35% lower empowers women to seek proper protection. Comparing quotes from leading Canadian life insurers makes obtaining the right level of affordable coverage simple.
The Bottom Line
While premium costs are based partly on gender, an individual’s health, lifestyle, and occupational risks are also factored in. So, while women, on average, pay lower rates, a hazardous hobby or illness could still increase an applicant’s costs over the typical female. Comparing quotes and choosing the right insurer is key to maximizing savings.
There are many compelling reasons pay less for life insurance than men – take advantage of this pricing difference to protect your loved ones. The need for adequate and affordable life insurance remains for all families, regardless of gender.
FAQs Related To Why Women Often Pay Less For Life Insurance Than Men
How much less do women pay for life insurance than men?
On average, women pay 15-35% less than men for life insurance depending on age and coverage amount. The gap tends to widen as applicants get older.
What are the main reasons women get lower insurance rates?
The main reasons are that women statistically have a longer life expectancy, engage in fewer risky behaviors, develop deadly diseases less often, and work in safer occupations than men.
Where does the life insurance gender gap exist?
This gap exists in countries all around the world, including Canada, the United States, and across Europe. It is driven by fundamental differences in mortality risks between men and women.
Why do insurance companies charge women lower premiums?
Insurers charge women less because actuarial data shows women live longer and have lower mortality rates at most ages, making them less risky and costly to insure.
When do men and women begin paying different premiums for life insurance?
Gender-based pricing differences begin at the time life insurance policies are purchased and persist throughout the duration of coverage. Women enjoy lower rates starting from the time of application.
Do transgender people get quoted male or female life insurance rates?
It depends on the insurer, but most base rates on the gender identity indicated in the application, not on sex assigned at birth. However, non-binary rates generally don't yet exist.
Can men get the same life insurance rates as women?
No, men cannot access the same preferential rates as women solely because of their gender. However, leading a low-risk lifestyle can help minimize these cost differences.
Is it illegal for life insurance companies to use gender in pricing?
No, it is standard industry practice for insurers to use gender-based actuarial data as one factor when pricing life insurance policies.
Do only healthy women get lower rates or all women?
All women are quoted lower rates than men of the same health status and risk class. However, poor health still increases rates proportionally for women based on conditions.
Are there any cases where men pay less for insurance than women?
In rare cases, specific high-risk occupations or health conditions more common in women could make insurance cheaper for men with equivalent risk profiles. But this is uncommon.
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