LAST UPDATED: NOVEMBER 2023
Term life insurance Canada: affordable & hassle-free coverage
Up to 20% in savings with PolicyMe, with some of Canada's cheapest term life insurance rates
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Still need that $500,000 in coverage?
Monthly term life insurance rates for anon-smoker,$450,000in coverage over20 years
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Rates are locked-in for the full term
Coverage amounts: $100K to $5M
Policy lengths: 10 to 30 year terms
10% couple’s discount in the first year
Free $10,000 in child coverage
Cancel anytime without fees or penalties
30-day grace period for missed payments
Beneficiaries get 100% of the payout, tax-free
Automatic yearly renewals so you stay protected
Term life insurance is an affordable and straightforward type of life insurance that provides financial protection for a set period. The beneficiary gets a lump sum death benefit if the policyholder passes within that timeframe. Term policies are often the cheapest life insurance in Canada.
Term life insurance is for those that want financial protection for a set period, like while raising a family or paying off debt. If someone depends on you financially, a term policy might be for you.
Term life insurance is one of the most affordable life insurance policies. Premiums are around 7.5x less than the price of whole life insurance. Term is also more flexible; choose the length and coverage you want – with the option to renew or convert to permanent later.
Term life insurance costs around $34 a month on average in Canada, based on industry data. This can be paid through monthly or annual premiums. Your exact rate will depend on factors like age, gender, if you smoke, health, lifestyle and occupation.
Term life insurance works by providing coverage for a set amount of time – most often 20 years. A term plan guarantees that if you pass away while the policy is active, your loved ones get a tax-free lump sum, also called a death benefit.
As a new or expecting parent, your family's financial future is likely one of your top priorities (other than getting half a minute to yourself). If something were to happen to you, life insurance can provide your family with the financial resources it needs to cover living expenses, childcare and education costs.
Big investment, BIG mortgage payments. If you were to pass away unexpectedly, term life insurance can provide your family with the resources they need to keep the home, pay off the mortgage and continue with other financial obligations.
As a business owner, you may have employees or partners who depend on your income. Life insurance can provide the necessary funds to keep your business operating in the event of your death. It can also be used to buy out partners or to cover other business-related expenses.
If you're nearing retirement age and haven’t saved up as much as you’d like, life insurance can provide a safety net for your partner or any kids that depend on you financially. The term life insurance payout can be used to cover living expenses, pay off debts or provide an inheritance for your beneficiaries.
Couples who depend on each other's income should consider buying term coverage as well. In the event of one partner's death, the surviving partner can use the payout to maintain their standard of living, pay for expenses or pay debts. Financial security is romantic, right?
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After term life insurance ends, your policy will expire. At this point, you will no longer have coverage and your beneficiaries will not receive a payout if you were to pass away. It's important to note that you do have options once your term ends. You may be able to renew your policy or convert it to a permanent life insurance policy, depending on the terms of your policy.
Term policies end when the term ends – so whatever age you happen to be by then! For example: if you are 32 when you apply for a 30-year term policy, then it’ll expire when you are 62.
At PolicyMe, term coverage can be offered up to the age of 85, with the available term lengths of 10, 15, 20, 25 and 30 years. So the oldest age to apply (with minimum term length) is 75.
Term life insurance covers accidental death, as well as other causes of death. But there are two major caveats to this. Firstly, most life insurance policies have a two-year contestability period, in which suicide is excluded from coverage. This can also be referred to as a “suicide clause”.
Second, each company has a different approach to this. The majority will have a contestability period and suicide clause mentioned above. But there may be other particularities to your policy. Make sure to read your policy closely before signing to avoid any misunderstanding!
You may need to do a medical exam to get term life insurance, but it's less likely if you're of average health and under 40 years old. The medical exam is like a check-up to see how healthy you are. Insurance companies want to know this information so they can figure out how much your policy should cost and if there are any risks involved.
Not everyone needs a medical exam, though. It depends on the insurance company, your age, and the amount of coverage you're looking for. Some companies offer "no medical" life insurance policies, but they might be more expensive or have less coverage.
Your term life insurance length should roughly match the length of your financial commitments. Here are some general rules of thumb for how that breaks down for the most common term lengths:
1 to 9-year term policy: a short-term policy that’s less than 10 years in length may be suitable if you have a temporary need for coverage, such as covering a loan or a mortgage or providing for your kids until they reach adulthood.
10-year term policy: this type of policy is often chosen by people who have young children or a mortgage they want to pay off in 10 years. It's also a good option for people who want to lock in lower premiums while they are still young and healthy.
20-year term life insurance: this type of policy is often chosen by people who have young children and want to provide financial protection until they are old enough to support themselves. It's also a good option for people who want to pay off their mortgage or other debts within that time frame.
30-year term policy: this type of policy is often chosen by people who want to provide long-term financial security for their family, such as covering college expenses for their children or supplementing retirement income. It's also a good option for people who want to lock in low premiums for longer.
There are some disadvantages to term life insurance, but that will depend on your personal financial needs. One “drawback” is that once the term of the policy ends, you no longer have coverage. This means that if you outlive the term, you won't receive any payout or benefits. But take note: term life insurance is best suited to cover temporary financial needs – like a mortgage or while your kids are growing up.
If you do need to renew your term policy, it’s certainly possible, but the premiums for term life insurance can increase because if you're older.
Despite these drawbacks, term life insurance is generally more affordable and straightforward, providing valuable protection for your family during a specific period of time.
Term life insurance plans will typically not cover a few certain situations and events. Here are some common exclusions in term life insurance policies (but it will vary company to company):
Suicide: Most policies have a suicide exclusion during the first two years of coverage.
High-risk activities: Engaging in high-risk activities like extreme sports or hazardous occupations may result in coverage exclusions or higher premiums.
War or acts of terrorism: Some policies may exclude death caused directly by war or acts of terrorism.
Misrepresentation: Providing false information during the application process can lead to denial of claims or cancellation of the policy.
Make sure to carefully review the terms and conditions of your policy to understand any exclusions that may apply before you sign it!
There are a few term life insurance riders and add-ons that are relatively common across the industry in Canada. Here is a quick rundown of the most popular ones:
1 to 9-year term policy: a short-term policy that’s less than 10 years in length may be suitable if you have a temporary need for coverage, such as covering a loan or a mortgage or providing for your kids until they reach adulthood.
10-year term policy: this type of policy is often chosen by people who have young children or a mortgage they want to pay off in 10 years. It's also a good option for people who want to lock in lower premiums while they are still young and healthy.
20-year term life insurance: this type of policy is often chosen by people who have young children and want to provide financial protection until they are old enough to support themselves. It's also a good option for people who want to pay off their mortgage or other debts within that time frame.
30-year term policy: this type of policy is often chosen by people who want to provide long-term financial security for their family, such as covering college expenses for their children or supplementing retirement income. It's also a good option for people who want to lock in low premiums for longer.
PolicyMe has some of the cheapest term life insurance rates in Canada.
We have reduced cost barriers to term life insurance by delivering the same high-quality coverage but at a lower, more affordable price.
No, there is no cash value associated with term insurance policies. Once the policy expires, the coverage ends. And if you don’t die before your term expires, you or your beneficiaries don’t get a payout (death benefit) either, nor do you get any of your premiums back.
Term life insurance is usually worth it for most Canadian families. The main advantage of term life insurance is that it offers really affordable and simple coverage for a specific period, like 10, 20, or 30 years.
This makes it a popular choice for those who want to ensure financial security for their dependents, pay off debts, or cover future expenses like childcare or tuition. However, it's important to consider your personal circumstances and financial goals before deciding if term life insurance is right for you.
Unlike whole or universal life insurance, term life insurance does not have a cash value. When your term ends, or if you cancel your policy before the end of your term, there’s no refund.
Sounds like a bad deal? Think of it this way: term is like auto insurance or home insurance. If you don’t make a claim on your car insurance, you don’t get your money back. Same deal with term.
Life insurance rates usually vary between men and women for a few reasons. One important factor is the difference in life expectancy. On average, women tend to live longer than men, which means they may pay premiums for a longer period. Another factor is that women often have lower mortality rates for certain health conditions compared to men. This lower risk of mortality can result in lower insurance rates for women.
While these are certainly over-generalizations about the life expectancy for each gender, life insurance companies use this type of data to calculate the risk of covering an applicant.
The bottom line? It's important to remember that individual circumstances; your age, health, and lifestyle choices, also play a role in determining life insurance rates. So it's not just about gender, but a combination of factors.
PolicyMe’s term life insurance policies are sold by PolicyMe, a licensed life insurance agency, and are insured by Canadian Premier Life Insurance Company.
You do not necessarily need to be Canadian or a Canadian resident to get a term life insurance policy. But note that it is rarer to find a company that will approve you in this scenario. If you do find a company that offers coverage to non-Canadians and non-residents, chances are that your coverage amounts will be more limited.
For PolicyMe’s term life insurance coverage, you’re either required to be Canadian or be a resident of Canada. And you’d need to be a Canadian resident at the time of application, with the contract being signed while in Canada and cannot be signed while overseas.
PolicyMe operates like any other insurer: we sell insurance products, which are underwritten by Canadian Premier. The great news is that because we've automated operations, cut out the middleman and reduced underwriting requirements (such as medical exams), we're able to pass along the savings to you, while still delivering the same quality of coverage.
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