25-Year Term Life Insurance in Canada

TL;DR: Is a 25-year life insurance term right for me?

A 25-year term is a good choice if you want long-lasting protection through major life events but don’t want to pay the higher premiums of a 30-year term life insurance policy or a permanent life insurance policy.

Choose a 25-year term if you:
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• Have young children who will rely on your income for the next two decades
• Recently took on a 20–25-year mortgage
• Want to lock in lower premiums before age-related health risks increase
• Are having children later in life and need coverage that lasts into their adulthood
• Want predictable, affordable coverage without committing to lifelong insurance

How a 25-year term life insurance policy works

A 25-year term life insurance policy provides life insurance coverage for a set period of time (25 years), ensuring your loved ones receive financial protection during the years they rely on you most. 

During this period, you’ll pay a monthly premium in exchange for guaranteed level rates and a tax-free death benefit for your beneficiaries if you pass away while the policy is active. They’ll receive a lump sum payment that can support a mortgage, children’s education, or lost income replacement, providing financial security and peace of mind for your family's future.

Many policies require underwriting, which evaluates your health history, lifestyle, and medical risks. Factors like age, smoking status, and overall health all play a role in determining your final premium. The application process may include a questionnaire, medical exam, or digital health verification, depending on the insurer.

You can estimate your coverage needs with a life insurance calculator and compare quotes from different providers to find a plan that fits your budget and long-term goals.

25-year term life insurance rates in Canada

25-year term life insurance typically costs more than 10- or 20-year policies, but it offers longer protection. This term length is often enough to cover a mortgage, early parenting years, and most long-term financial obligations. 

Below are sample monthly rates for healthy non-smokers across four common coverage amounts.

$100,000 coverage

$250,000 coverage

$500,000 coverage

$1,000,000 coverage

Who is 25-year term life insurance best for?

A 25-year term works well for families with long-term insurance needs who want predictable premiums and solid protection for their loved ones. Since the coverage lasts through major milestones, it offers long-term peace of mind without the higher price of permanent options.

Here’s who gets the most value from a 25-year policy:

• Young families with children: If you have babies, toddlers, or elementary-aged kids, a 25-year term will protect your income until they finish post-secondary education and become financially independent.
• Homeowners with 20–25 years left on a mortgage: A 25-year term aligns most perfectly with many Canadian mortgage timelines. It ensures your family can stay in the home even if you pass away before the mortgage is paid off.
• People who want to lock in pricing before major health changes: Your 30s and early 40s are prime years to secure a long-term policy at an affordable rate. A 25-year policy lets you lock in a health-based premium before age-related risks like high blood pressure, diabetes, or any critical illnesses increase your costs.
• Parents expecting to have kids later: If you’re welcoming kids in your mid-30s or early 40s, a 25-year term extends protection through their teen years and early adulthood, without the need to reapply.

You can also choose from different coverage options to match your budget and future financial goals.

25-year vs. 20-year vs. 30-year terms: How to choose

Selecting the right term length really comes down to three things: price, how long your financial obligations last, and whether you plan to layer policies to save money in the long run. 

Shorter-term policies almost always come with a lower monthly premium, but they run out sooner, which often means reapplying later in life when rates are higher.

A 25-year policy often hits the “just right” zone; it’s long enough for major milestones but not as expensive as 30-year coverage.

If you're unsure which term length fits your needs, speaking with an insurance advisor can help clarify your options.

Laddering term life insurance policies

“Laddering” means buying more than one term policy, each with a different duration, so your coverage naturally decreases as your financial responsibilities drop off.

As each policy ends, your total coverage becomes smaller—and so do your premiums. A 25-year term works as a strong base layer because it covers the longest stretch of high-responsibility years, covering your mortgage, early-to-mid parenting years, and your core earning period. By pairing it with shorter terms, you can build a customized long-term strategy that protects your family while lowering your lifetime insurance costs.
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An example of laddering

• Use a 25-year policy as your long-term foundation for your mortgage and your youngest dependants
• Add a 20-year term to cover medium-term needs like income replacement or education planning
• Add a 10-year term to handle short-term expenses such as daycare or a remaining loan balance

How to choose the right coverage amount

The right coverage amount will protect your family’s financial future if you pass away. There’s no universal number that fits everyone, but most Canadians end up somewhere between $250,000 and $750,000, depending on their income, debts, lifestyle, and long-term goals.

Here’s how to figure out how much life insurance makes sense for your situation.

1. Start with the 10x income rule (a quick estimate)

Multiplying your annual income by 10 gives you a fast baseline for replacing a decade of earnings. It isn’t perfect, but it’s a helpful jumping-off point when you’re unsure where to begin.

2. Add in major debts and long-term financial obligations

Your coverage should be large enough to handle anything your family would struggle to pay off without you. That includes your mortgage, car loans, personal lines of credit, student loans, and any outstanding credit card balances.

3. Consider your dependants’ financial needs

Your policy should last through the years your children or partner depends on your income. Ask yourself:

• How long until your kids become financially independent?
• Do you want to help cover their post-secondary education?
• Does your partner rely on your income, and for how long?

4. Don’t forget everyday living expenses

Mortgage or rent, groceries, utilities, transportation, childcare, and healthcare costs all add up. Coverage should reflect what it actually takes to maintain your household’s lifestyle if your income were gone.

5. Subtract any existing financial resources

If you already have RRSPs, TFSAs, a pension, emergency savings, or group life insurance through your employer, you may opt for a lower coverage amount. Make sure the total remaining resources are still enough to support your family.

6. Keep your monthly budget realistic

Your coverage should balance strong protection with affordability. If your ideal number stretches your budget, you can adjust by:

• Choosing a slightly lower coverage amount
• Selecting a shorter or mid-length term
• Laddering multiple smaller policies
• Matching your term length to your most important financial timeline

The goal isn’t to buy the biggest policy possible; it’s to get dependable, long-lasting coverage that you can comfortably maintain.

What happens when the 25-year term ends? 

When your 25-year term comes to an end, your coverage stops, but most insurers offer a few different paths you can take from there:

• Renew your policy. You can usually renew your term without a new medical exam, but renewal rates are significantly higher because they’re based on your age at renewal.
• Apply for a new term policy. You can choose a new term length and adjust your coverage amount, but you’ll need to reapply and your premiums will be higher simply due to age. Even so, buying a brand new policy is typically cheaper than renewing an expired one.
• Convert to permanent life insurance. Some term policies allow you to convert all or part of your coverage into a permanent plan (like whole life insurance) without a medical exam. This is useful if, during your term, you developed a lifelong obligation that you need to plan for.
• Let the coverage expire. This option makes sense if your major financial responsibilities are behind you—the mortgage is nearly paid off, children are financially independent, or retirement is close. If you no longer have people relying on your income, ending the policy may be the simplest option.

FAQs: 25-year term life insurance