How Much Life Insurance Do You Need? A BC Checklist

A mortgage renewal notice landed in the mailbox of a Burnaby townhouse a few weeks ago. Nothing dramatic about it. The couple who live there sat down after dinner, spread the paperwork across the kitchen table, and worked out what the new payment would do to their budget. Then one of them asked the question that actually mattered: if something happened to me, could you keep this place?

Neither of them knew. That's normal. Plenty of people buy life insurance the way they buy a mattress, by picking a number that sounds about right and hoping it holds up.

There's a better way, and it isn't complicated. You're not guessing at a multiple of your salary. You're measuring a specific hole, then filling it. Early fall is a good time to do it, too. School is back, the budget has settled, and renewal letters are showing up in a lot of Metro Vancouver mailboxes.

Your number is a subtraction, not a multiplication

You'll hear rules of thumb everywhere. Ten times your income. Five times. A tidy round million. None of those rules know whether you're carrying a Metro Vancouver mortgage, whether you have three kids under ten, or whether you're mortgage free with a defined benefit pension waiting for you.

The honest version is arithmetic. What your family would need, minus what your family would already have, equals the gap. Life insurance is one way to close that gap. Everything below is just filling in those two columns.

The BC coverage checklist

Work through these with a pen and your actual statements, not numbers from memory. Column one is what's needed:

• Mortgage balance. Not the purchase price, not the assessed value. The number on your most recent statement, and if a renewal is coming, the payment you'll be facing after it.
• Other debts. Car loans, line of credit, credit card balances, any student debt still outstanding.
• Income replacement. Decide how many years your household would need your income for, then multiply. Five years buys breathing room. Fifteen to twenty gets a surviving partner to the point where the kids are grown and the mortgage is gone.
• Childcare and the daily gap. If one parent dies, the surviving one often can't work the same hours. Daycare, after school care and a reduced work schedule are real costs that show up immediately.
• Education. Whatever you'd want in an RESP that isn't funded yet.
• Wind-up costs. Funeral, estate administration, legal and accounting help, probate fees.

Column two is what already exists, and this is the part people forget to subtract:

• Group life coverage through your employer, including any optional amounts you've added.
• Individual policies you already own.
• Savings you'd genuinely be willing to spend, including TFSAs and non-registered accounts.
• RRSPs, keeping in mind they'll be taxed on the way out unless they roll to a spouse.
• Government survivor benefits, which brings us to the part most people badly overestimate.

What the government actually pays

This is where the checklist gets uncomfortable, and it's the single most useful thing to know before you pick a coverage amount.

The Canada Pension Plan death benefit is a one time payment of $2,500. For deaths on or after January 1, 2025, a top-up of up to another $2,500 is available, for a maximum of $5,000, but the Government of Canada is specific about who qualifies: the person must never have received a CPP or QPP retirement or disability pension, and must not leave a surviving spouse or common-law partner eligible for a survivor's pension. Read that twice. The households most likely to be relying on this, young families with a surviving spouse, generally get the $2,500, not the $5,000.

The ongoing CPP survivor's pension is modest too. For 2026, Service Canada lists the maximum survivor's pension at $803.54 a month for a survivor under 65 and $904.59 a month at 65 or older, with a children's benefit of $307.81 a month per eligible child. Those are the ceilings. The averages actually being paid are well below them, at $549.62 a month for survivors under 65 and $339.36 for those 65 and over, because the amount depends on how much the person who died contributed over their working life.

So the realistic picture for a Burnaby family is a few thousand dollars up front and somewhere between a few hundred and eight hundred dollars a month afterward. That's a cushion. It doesn't cover a mortgage payment in Metro Vancouver, and it was never designed to.

Why the mortgage line usually swallows everything else

Debt is what turns a manageable loss into a forced move. In its 2023 Survey of Financial Security, Statistics Canada reported a median mortgage of $200,000 on Canadian family homes, along with median debts of $20,000 on vehicle loans and $14,000 on student loans. The same survey put British Columbia's median family net worth at $773,500, the highest of any province, against a national median of $519,700.

That BC number sounds reassuring until you notice what it's made of. Much of it is the home, and your family can't spend the home without selling it and leaving. Meanwhile the median total income of individuals in Canada was $46,300 in 2024, according to Statistics Canada's income table, and it hasn't moved in real terms since 2023. The Canadian Income Survey release from April 2026 tells the same story from the household side: median after-tax income for families was $108,900 in 2024, people living alone sat at $41,000, and BC had the highest poverty rate of any province at 13.0 percent.

High asset values, ordinary paycheques. That's the squeeze a lot of Vancouver area households are in, and it's exactly the situation coverage is meant to absorb.

Naming a beneficiary is half the job

Getting the amount right does nothing if the money takes a year to arrive. Under section 65(1) of BC's Insurance Act, if a beneficiary is designated, the insurance money "is not part of the estate of the insured and is not subject to the claims of the creditors of the insured" from the moment it becomes payable.

That matters in dollars. Under BC's Probate Fee Act, no probate fee is payable on an estate of $25,000 or less, then $6 for every $1,000 between $25,000 and $50,000, and $14 for every $1,000 above $50,000. Money that goes to a named person rather than through the estate isn't sitting in that calculation, and it isn't waiting on the court either.

So check your beneficiary designations. Check them again after a marriage, a separation, or a birth. It's a five minute job that people skip for a decade.

What this checklist doesn't tell you

Be skeptical of anyone, including me, who hands you one number and calls it done.

The Statistics Canada figures above are national medians from 2023 and 2024. They describe the shape of the problem, not your household. A Coquitlam family with a $700,000 mortgage and a New Westminster couple who bought in 2009 are in genuinely different positions, and neither one matches the median.

Your need also shrinks over time. The mortgage amortizes, the kids finish school, the RRSP grows. The coverage that fits a 34 year old with a new mortgage is usually more than that same person needs at 58, which is one reason term length is as much of a decision as term amount.

Group coverage at work is real coverage, but it usually ends when the job does, and the amount is often tied to salary rather than to your mortgage. Counting on it fully is a common mistake.

Health and age affect what's available to you and what it costs, and only a formal application and underwriting will tell you where you actually land. Anyone quoting you a firm price before that conversation is guessing.

And insurance is one tool, not the whole answer. Disability coverage, critical illness coverage, an emergency fund and an up to date will all do work that a death benefit can't.

Sources

• Government of Canada, Employment and Social Development Canada. "Canada Pension Plan death benefit." Accessed September 2026. https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-death-benefit.html
• Government of Canada, Service Canada. "CPP payment amounts." 2026 figures, updated April 2026. https://www.canada.ca/en/services/benefits/publicpensions/cpp/payment-amounts.html
• Statistics Canada. "The assets, debts and net worth of Canadian families, 2023." Catalogue 11-627-M, 2024. https://www150.statcan.gc.ca/n1/pub/11-627-m/11-627-m2024047-eng.htm
• Statistics Canada. Table 11-10-0239-01, "Income of individuals by age group, gender and income source." 2024 reference year. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110023901
• Statistics Canada. The Daily, "Canadian Income Survey, 2024." Released April 29, 2026. https://www150.statcan.gc.ca/n1/daily-quotidien/260429/dq260429a-eng.htm
• Province of British Columbia. Insurance Act, RSBC 2012, c. 1, section 65. https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/12001_03
• Province of British Columbia. Probate Fee Act, SBC 1999, c. 4, section 2. https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/00_99004_01
• Insurance Council of British Columbia. "Insurance Licensee Directory." https://www.insurancecouncilofbc.com/licensee-directory/

*This article summarises published rules and research for general information. It's current as of the date shown above and isn't personalized financial, tax or legal advice.*

If you'd like, bring your filled-in checklist and we'll go through it together. I'm an independent broker in Burnaby, so I compare policies across several of Canada's insurers rather than selling one company's shelf, and I work in English and Tagalog. You can confirm my licence anytime through the Insurance Council of BC. Book a free call, ask your questions, and leave with a number you understand. No pressure, and no obligation to buy anything.