The Best Life Insurance Term Lengths (And What You Don't Need)

Term life insurance policies typically come in 10, 15, 20 or 30-year lengths.

You should pick the term length that best lines up with when you'll have dependents and/or big debts.

In general, shorter terms are ideal for those nearing retirement and longer terms are better for younger Canadians.

Let's dive into what the perfect term length may be for you.

How long should my life insurance term be?

Your life insurance term should be as long as you have significant financial obligations, such as a mortgage balance, minor children or student debt.

The average PolicyMe customer has a 20-year term life insurance policy.

Shorter term lengths are better for:

  • Older applicants
  • Those who have almost paid off their mortgage or other debts
  • Those who aren’t sure what the future holds

Longer term lengths are better for:

  • Younger applicants
  • Those with major debts
  • Those with a family that relies on their income

Term life insurance is a life insurance product that covers you for a preset number of years. You can choose how long it will last, making it a flexible and affordable option for the majority of Canadian families.

PolicyMe offers some of the most affordable term life insurance in Canada, making it easier to say "yes" to the term length you want.

What does term length for life insurance mean?

Term length in life insurance refers to how long your coverage will last.

So if you purchase a 20-year plan, your life insurance policy will protect you for the next 20 years. This is the term length of your policy.

Canadian life insurance companies offer different options for term lengths:

  • BMO has fewer term length options,
  • Wawanesa has a wide variety of term lengths available.
  • CIBC only offers 10 and 20 year term length options.
  • RBC has a wide variety of options, from 10 to 15 to 20 to 40, and anything in between.
  • iA Financial lets you pick whatever term length you want.

PolicyMe offers term lengths of 10, 15, 20, 25 and 30 years, which is standard for the life insurance industry.

This allows you to choose the best term for your needs without having to round up or down the coverage you need.

How long do I need term life insurance?

You will need term life insurance for as long as you have significant financial obligations.

In other words, your life insurance term should last as long as you have significant debts and until your children are grown.

Term life insurance works to protect your family financially, so the surviving partner or kids can cover:

  • The payments on your mortgage
  • The kids’ art classes, swimming lessons and summer camps
  • Saving for the kids' post-secondary education
  • Saving for retirement
  • Any debts you share
  • Daily expenses, and more

In short, life insurance makes sure your family can maintain the lifestyle you currently enjoy if you weren't there to financially contribute.

At some point, you’ll have paid off your mortgage, your kids will move out and become independent. You’ll hopefully have saved and invested enough money to take care of the expenses you have left.

That's the main advantage to a term life insurance policy.

So, it’s best to choose a term length that will bridge the gap between where you are now and where you’ll be in the future when you have taken care of these financial responsibilities.

Not sure exactly how long that gap will be? Try our online life insurance calculator and get three recommendations for term length and coverage.


Until what age is it best to have term life insurance?

When it comes to term life insurance, age isn’t the most relevant factor. Some people in their early 20s need it, and some in their late 60s or older do too.

The most important thing to consider is whether you have people who depend on you financially” to cover their expenses, pay your shared debts and support the kids. If you do, you should have life insurance until you’re no longer responsible for these obligations.

In summary: You need a term life insurance policy for as long as you have significant financial obligations

There's a lot to consider when buying life insurance. It’s best to choose a term for your life insurance that will cover your family for the years they depend on your income the most. This is often while you’re paying off your mortgage and debts while supporting your children and/or partner.

  • If you’re older, or have limited financial obligations that are ending soon (e.g. your mortgage is almost paid off, your children are moving out), a term of 5-10 years might work well for you.
  • If you’re younger, have big debts such as a mortgage or student loans, or have very young children, a longer term of 20-30 years could work best for you.
  • Remember to factor in other expenses or assets you have before making a decision.

Decide on a term and find out how affordable term life insurance can be through PolicyMe. Get an online quote in minutes.

FAQs: Life insurance term lengths

What happens after 20 years of term life insurance?

After 20 years of term life insurance, your term will end if that is the length you have chosen for your coverage. In some cases, you may be able to renew your policy and extend the length if you still need protection. You can reach out to your insurer to determine your options.

If your term is longer than 20 years, nothing happens! You’ll continue to be covered until your term ends.

What should be the duration of a term insurance plan?

The best duration for your term life insurance should be as long as you have major financial responsibilities.

So if you have children, a mortgage, or a partner who depends on your income or any other major debts, you should have protection until most of these obligations have been paid off or managed.

Do you get your money back at the end of term life insurance?

At the end of term life insurance, you don’t get your money back. However, whole or permanent life policies do offer a cash surrender value. These plans will pay back a portion of your premiums if you cancel your coverage. 

That being said, there is a cost, literally. Whole life premiums can be up to 10x as much as term life policies. Because your cash surrender value is only a small percentage of the total money you paid into the plan, you’ll likely save money going with term life versus a whole life policy.

Recommended reading: How much term life insurance should you buy.

Laura McKay

COO & Co-Founder

About the Author

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