How Much Life Insurance Do You Really Need in BC?

Picture this. It's 2 a.m., the house is quiet, and you're doing math in your head. If something happened to you tomorrow, would your family be okay? The mortgage, the kids, the everyday bills. It's a heavy question, and most people I sit down with around Burnaby and Vancouver have never actually worked out the answer. The good news is that figuring out how much life insurance you need is far less complicated than it feels at 2 a.m.

Start with what you'd leave behind

Life insurance replaces your financial role in your family. So the first step is simple. List what would still need to be paid if your income stopped tomorrow.

• Your mortgage or rent, usually the biggest line anywhere in Metro Vancouver
• Loans, car payments, or a line of credit balance
• Everyday living costs for your family, often for several years
• Childcare and future education, including anything you'd want sitting in an RESP
• Final expenses, like a funeral and any leftover bills

Add those up and you have a rough picture of the gap your family would be looking at.

A simple starting point

The old rule of thumb is roughly 10 times your annual income. Earn $90,000 and that points at about $900,000 of coverage. It's a fine place to begin, but it's blunt. It has no idea whether your home is nearly paid off or you have three kids under 10.

The DIME method gets you closer. You add up:

• Debt, meaning everything except the mortgage
• Income, your yearly pay times the number of years your family would need support
• Mortgage, the full remaining balance
• Education, what you'd want set aside for each child

Then you subtract what you already have.

Count what's already in place

Plenty of people skip that last step and end up buying more than they need.

Group life through work is the obvious piece. It's a nice bonus, but it usually ends when the job does, and it's often only one or two times your salary. Then there are your savings. The TFSA annual limit held at $7,000 for 2026, and someone who's been eligible since 2009 and never contributed has $109,000 of room sitting there. Balances like that shrink the gap.

RESPs count too, and September is the natural moment to check yours. Backpacks are bought, the year feels real again, and you still have until December 31 to make it count. The Canada Education Savings Grant pays 20 percent on the first $2,500 you put in per child each year, so up to $500 of free grant money annually, with a $7,200 lifetime cap per child. The grant follows the calendar year, so nothing you contribute now is wasted.

CPP helps as well, just less than people expect. There's a monthly survivor's pension, plus a one time death benefit of $2,500, with an extra $2,500 top-up available since 2025 in limited cases where there's no surviving spouse or dependent children. Useful. Not a plan.

Where you live changes the math

A family in Burnaby or Coquitlam carrying a big mortgage lands on a very different number than someone renting in New West with no kids. Housing costs here are still high, so the mortgage line usually drives the whole calculation.

Two wrinkles worth knowing right now. First, a lot of the five year fixed mortgages signed during the cheap stretch of 2020 and 2021 have been renewing through 2025 and 2026, and plenty of those payments came out higher than the original. Second, the insured mortgage cap sits at $1.5 million and first time buyers can stretch to a 30 year amortization, which is genuinely helpful for getting into a place here. It also means a bigger balance hanging around for longer, and that balance is exactly what your coverage has to clear. Neither is a reason to panic. Both are reasons to redo the math, because generic online calculators tend to undershoot for local families.

Term or permanent?

The amount is one question. The type is another. Term covers you for a set period, like 20 years, and tends to fit growing families who want the most protection while the kids are small and the mortgage is large. Permanent lasts your whole life and builds value over time, which suits estate and long term planning goals. Neither one is automatically right.

One current note. Applications are fully digital at most insurers now, and healthy applicants within certain age and coverage limits can often skip the medical exam entirely. Something that used to take six weeks can wrap up in days. So "I don't have time for this" is less true than it used to be.

Revisit it every few years

Your number moves. A new baby, a bigger home, a raise, or paying off a chunk of debt all change it. A mortgage renewal is another natural checkpoint, since both your balance and your payment have shifted. A quick review every three to five years, or after any big life event, keeps your coverage matched to the life you're actually living instead of the one you had when you signed up.

Let's find your number

Still not sure what it should be? That's completely normal, and it's exactly the kind of thing worth talking through with a person instead of a calculator. Book a free, no pressure call with me, Milo. We'll look at your situation together, compare options from Canada's top insurers, and land on a number that fits your family. No jargon, no hard sell. Happy to do it in English or Tagalog.