Deciding on what life insurance policy to purchase is a serious life decision. It has lasting consequences. In making this decision different factors come into consideration, like where to purchase the life insurance policy from. 
For visitors, exploring options such as https://gms.ca/visitors-to-canada-insurance can provide valuable insights.  
For example, some United States citizens consider purchasing life insurance from Canada and vice versa. Here are important differences between life insurance in Canada and the United States of America. 

TAX

Perhaps the most important difference between life insurance in Canada versus in the United States of America is the tax considerations.

In Canada, the general guideline is that upon the death of a person their death benefits are paid to the named beneficiaries on a tax-free basis. The death benefit paid from a life insurance policy is a tax-free, lump-sum amount to your named beneficiary or beneficiaries so they can use the money to finance any number of things; paying off a mortgage so they can remain in the same home and community, replacing income so they can maintain their standard of living without you, or to pay for funeral expenses.  

Research into Canada’s best life insurance companies reviewed all explain the same thing, your named beneficiaries generally won't pay taxes whether the life insurance policy was term insurance or whole insurance, or huge payment.

In the United States, on the other hand, insurance proceeds are considered part of the estate of the deceased and can be subject to estate taxes. What happens is that generally, when the beneficiary of a life insurance policy receives the death benefit the money is not counted as taxable income so the beneficiary does not have to report it. However, the paying of the taxes part happens when for instance, if the policyholder elects not to have the benefit paid out immediately upon his death but rather held by the life insurance company for a given period, then the beneficiary pays taxes on the interest generated during that period. Also, when a death benefit is paid to an estate, the person or persons inheriting the estate may have to pay estate taxes on it.

The Risk Pool

To first understand the concept of risk in relation to insurance, it's important to have an idea of population numbers. By June 4th, 2019 the population of the United States of America was an estimated 317.2 million. Comparatively, the Canadian market consisted of an estimated 37.6 million people. 

The population in a country has a direct impact on how life insurance works because of the concept of underwriting. In life insurance, underwriting is the process your application goes through when you apply for a traditional term or permanent insurance policy. Your vital information is analyzed along with your medical records by an underwriter who assigns you a rating based on the risk a life insurance company takes to ensure you.

Because the United States clearly has a larger pool of applicants this means there is more money, diversity of health, and options for the consumer. Plus there are more reinsurers to make the market more competitive. The overall result is that companies tend to underwrite people who may not be insurable in the Canadian market, which has a much smaller risk pool.

This is why the United States of America has more lenient underwriting than Canada. This means that your chances of getting insured in America even if you have a medical condition that makes you ineligible in Canada is significantly higher. 

Cost 

A popular question is which country has the cheaper term life insurance; Canada or the United States of America? 

The answer is Canada has a cheaper term life insurance policy. Canadian term insurance products are in almost all step-level terms. For example, a ten-year term will have a level premium for the first ten years, then increases on the eleventh year for another ten years, and so forth. 

Conversely, American insurance products are completely different. Nearly all of them are level only for the duration of the initial period then subsequently renewed at yearly increasing costs. 

For example, a ten-year term is level for the first ten years but then escalates yearly from the eleventh year. The premiums can go up so much that they could increase by 300 percent in the eleventh year. Sometimes prices could skyrocket to the point where by year 17 or 18, the premium cost could be equivalent to that of guaranteed-issue insurance.

Thus, insurance pricing is higher in the U.S. than it is in Canada if you’re looking at pricing overall. The initial premium is sometimes cheaper in the U.S. because of the structure of term life policies and once you measure term prices by the initial premium, they may appear superficially cheaper in the United States than they are in Canada. But in the long term, they’re more expensive.

When deciding on life insurance packages to benefit your family, comparing countries is a good idea. Remember to factor in cross-border policy considerations in your final decision.