Compare the best term life insurance quotes in Canada
Shop the Canadian term life insurance market with us today – your best rate is only a few steps away.
let's get startedHow to get term life insurance with Ratehub.ca
- Tell us a bit about yourself
Life insurance is specific to you, so we'll need a few details to customize your policy.
- Speak with an insurance broker
We'll show you quotes from multiple providers, so a broker will be in touch to help you choose.
- Finalize your policy selection
You may need a medical exam to finalize your policy, but you'll be guided through the process.
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What is term life insurance?
Matt Hands, VP, Insurance and MoneySense
A term policy is a life insurance product that guarantees a death benefit payout to a stated beneficiary during a specific period of time, typically ranging between five to thirty years. So if you pass away during the set term, your loved ones can use this money for whatever they wish – including paying off the mortgage, replacing your income, and financing their education, When you purchase a standard term insurance policy, your coverage amount and premiums are locked in for the entire length of the plan.
When the term expires, you'll usually have the option to either renew our policy for a higher cost, or you can let your coverage expire. Some policies also let you convert the term life insurance to permanent life insurance (such as whole life insurance or universal life insurance), typically between one and five years before the term ends.
When you bind your term life policy, you choose the term length (also known as how long you want to be covered for), as well as your coverage amount (also known as how much you want your beneficiary to receive after you die). Only if you die within the term does your life insurance company pay out the death benefit.
When to buy term life insurance
Term life insurance is best for those that have a temporary need for coverage. And this temporary need can extend for many years – here are a few situations in which this type of policy could come in handy.
Mortgage
Children
Retirement
Education
Find your best term life insurance quote with us today.
We're here to help you find the best term life insurance policy to suit your personal needs. Compare quotes from one of our licensed brokers today to find the cheapest rate.
Types of term life insurance in Canada
Term life insurance is a relatively simple product when compared to other types of life insurance, but it's still important to learn about the options you have when shopping around for your policy. Here's a brief overview of three popular types of term insurance plans in Canada.
Level term insurance
Yearly renewable term insurance
Decreasing term insurance
Choosing your term insurance length
So how long should your term life insurance last? While plans typically range between five to thirty years, the right term for yourself will depend on your personal needs – here are a few factors you should consider.
Age & retirement
Mortgage & debt
Children
Cost
Common term life insurance coverage additions
Most providers also allow you to purchase extended coverage (or life insurance riders) to protect you against special circumstances. And while you can add these to your term life policy, you may also be able to purchase some of these as standalone policies. Here are a few common additions you can ask your broker about.
Critical illness insurance
Critical illness insurance can be purchased as a rider or a standalone policy. It is exactly what it sounds like – if you're diagnosed with an approved critical illness, your insurer will pay out a lump sum to cover the financial burdens involved.
more about critical illness insuranceDisability insurance
Like critical illness, you can purchase disability coverage as either an add-on or a standalone policy. This type of insurance ensures you'll be financially covered in the event you become disabled and unable to work, acting as income replacement.
more about disability insuranceChildren's insurance rider
Life insurance for your child can typically be purchased as a rider, on top of your term life insurance policy. This is generally a much cheaper option to ensure your child also has coverage, instead of purchasing them a standalone policy of their own.
more about life insurance for childrenAccidental death insurance
Accidental death insurance can also be purchased on its own or as a rider. As a standalone, the benefit will only be paid out for cases of accidental death. And as an add-on, your beneficiaries will receive an increased benefit in cases of accidental death.
more about accidental death insurance
How much term life insurance do I need?
One of the most important decisions you need to make when purchasing life insurance is the coverage amount on your policy. To determine the right number, there are three different factors you should consider – your family situation, your debts, and your income. Visit our blog on this topic to learn more about calculating your term coverage needs.
learn moreHow much is term life insurance in Canada?
While the cost of term life insurance depends on various individualized factors, here are a few sample rates we pulled in September 2024. To find out the exact price you'll be paying, be sure to compare term life insurance quotes with us.
- $117/year
30-year term policy with $100,000 coverage
for a 30-year-old, non-smoking female
- $345/year
20-year term policy with $500,000 coverage
for a 35-year-old, non-smoking male
- $362/year
10-year term policy with $600,000 coverage
for a 40-year-old, non-smoking male
What factors affect term life insurance premiums?
Generally speaking, the more risk you bring as a policyholder, the more expensive your insurance will be – here are some of the factors insurers look at to determine your term life premium.
- Age
The older you are, the more expensive your term life insurance will be – that's why it's often a good idea to bind policies early.
- Gender
Statistically speaking, the life expectancy for females is longer than the expectancy for males, so your term life rates will reflect this.
- Health
Pre-existing conditions, family medical complications, and habits such as smoking excessive drinking lead to higher premiums.
- Lifestyle
Participating in high-risk activities on a regular basis, such as skydiving, can lead to higher term life insurance premiums.
- Job
If you work in a high-risk industry, such as roofing or logging, you may need to pay more for your term policy.
- Policy type
More coverage and longer terms result in higher term life premiums – you'll need to pay more for the additional peace of mind.
What happens at the end of my term life insurance period?
Oftentimes, the death benefit of a term life insurance policy won't be paid out – this is because the coverage can expire if you don't pass away during the set period. If you want to extend your policy term, you can look into renewable and convertible life insurance.
A convertible life insurance policy gives you the option to convert your term policy into a permanent policy. The primary benefit of having a convertible policy is that you won’t have to pass a medical exam to get permanent coverage. So if you’re diagnosed with a serious illness while you have an active convertible term life plan in place, you can still get permanent coverage that may not otherwise be available to you.
A renewable life insurance automatically renews at the end of your set term. Let's say your policy is set to expire after ten years – in this case, you'll be automatically renewed into another ten-year term, provided you didn't pass away during the first decade. When you choose a renewable policy, be aware that premiums increase at the time of the renewal, so it's a good idea to shop the market again before the term expires.
For more insight on your various options, check out our blog – What to do when your term life insurance expires.
Ready to speak with a broker about term life insurance?
Request your free term life insurance quotes today, and find out which carrier offers the most affordable policy options to meet your personal coverage needs.
Term life vs. whole life insurance – what's the difference?
The overwhelming decision for many Canadians when shopping for life insurance is choosing between term life and whole life coverage. Here, we cover the main differences between the two, so you can choose the one that best suits your needs.
Feature |
Term life insurance |
Whole life insurance |
---|---|---|
Coverage period |
Term life insurance only covers you during the fixed term you choose – be it five years, ten years, or thirty. |
Whole life insurance covers you for an entire lifetime – from the policy start date until the day you pass. |
Coverage needs |
Term policies are well-suited if you only need financial protection for a specific period (e.g. mortgage debt). |
Whole life insurance is recommended if you have a lifetime need for coverage (e.g. estate planning). |
Death benefit |
Your death benefit is the set amount purchased – it'll also only be paid out if you pass away during the term. |
Your death benefit is usually also fixed to a certain amount, but it can change it some cases – it's also guaranteed to pay out after you pass. |
Cash value |
Term life insurance policies don't accumulate in cash value, so you won't be growing a reserve. |
Whole life plans can accumulate in cash value, so you can access funds during your lifetime. |
Withdrawals |
You can't withdraw from a term life insurance policy during your lifetime. |
With whole life insurance, you're generally able to withdraw or borrow against your cash value reserve. |
Cost |
Term life is generally much more affordable than whole life – that's because you might not need a payout. |
Whole life insurance policies are eventually paid out, so expect to pay much more for this coverage. |
The Canadian term life insurance market
According to the Canadian Life & Health Insurance Association, 75% of in-force policies were term life plans in 2023. This number consisted of both individual term life plans (40%) and group term life plans (35%). On the other hand, individual whole life insurance policies took up 12% of the market while individual universal life insurance policies took up 13%.
40%
individual term life market share in 2023
35%
group term life market share in 2023
Term life insurance sales in 2023
According to LIMRA's Canadian Life Insurance Sales Survey, the new annualized premium for life insurance within the country increased by 4% in 2023 to $1.86 billion – this number was the highest sales recorded in the Canadian market (since the survey was first established in 1993).
Term life insurance took up 19% of the new annualized premium market share. Premiums totalled $345 million which was a 1% growth from 2022. The number of policies sold, however, decreased by 2%. In comparison, whole life new annualized premium market share amounted to 68% while universal life amounted to 13%.
What are the benefits of term life insurance?
Even though term life insurance is only a temporary coverage solution, there are many benefits to opting for this type of product. Here, we cover a few advantages to selecting term, including its simplicity, flexibility, affordability, and more.
- Simplicity
Term life policies tend to be much more easy to understand than permanent life policies. You choose a set death benefit, along with a set term period.
- Long-term flexibility
With term life insurance, you generally have options to covert the plan (to permanent life insurance) or renew it when expiration nears.
- Level premiums
In a standard term life insurance policy, your premium won't change within the entire term duration – you won't need to worry about a rate increase due to health status or old age.
- Affordability
A term life insurance policy is much cheaper than a whole life one – this is because your insurer may not need to payout the death benefit.
- Tax-free benefit
Like all types of life insurance, term life benefits are tax-free. Your beneficiaries won't need to pay taxes on the lump sum amount.
- Peace of mind
This also goes for other life insurance products, but a term life policy can provide you with peace of mind while you need it. It's nice knowing your kids will be covered while they're still growing up.
Frequently asked term life insurance questions
What term life insurance is best?
There is no one right answer. Selecting the right policy amount and term length will be unique to your situation. The best term life policy for you will be the one that meets all your coverage needs for the best rate possible. That's why we recommend doing a full coverage calculation breakdown and then comparing term life insurance quotes to find the carrier that best suits your needs, for the right price.
What is the most popular term life insurance?
Common lengths of term life insurance typically range between one and thirty years, with the most popular plan being a 20-year term life policy.
Is term life insurance better than whole life?
The best life insurance for yourself is the one that satisfies the needs of your specific case. Term life is less expensive and covers you for the most critical time in your life. Whole life is more expensive and covers you until death. Think about your beneficiaries – anyone who depends on you financially – that's who you need to worry about. For more information on the topic, read our article on term life vs. whole life insurance.
Can I sell my term life insurance policy in Canada?
No, but you can cancel to avoid paying any more premiums. Selling a life insurance policy in Canada is complicated, only allowed in certain provinces, and is generally reserved for a permanent life insurance policy. For more information on the topic, read our blog post – Can you sell a life insurance policy?
How much term life insurance should I buy?
It depends on your situation. Debts, income, mortgage, and education (DIME) are the four factors to consider in how much coverage you need. The more coverage you have, the higher the monthly or annual premiums will be. We recommend comparing life insurance quotes to see what suits your budget and your lifestyle best.
Can I cash in my term life insurance policy?
No, money doesn't accrue in a term insurance policy as it would in a universal life insurance plan. You can try to convert to this type of policy, but you wouldn't start accruing money within the policy until you pay into it.
Does term life insurance cover accidental death?
Yes, term life insurance – and in fact, any type of insurance – is there to protect you from the unexpected, including accidental death.
Does term life insurance cover disability?
No, but you can add disability insurance as part of your overall life insurance plans. Disability is nearly a requirement for most people as workplaces continue to do away with short-term and long-term disability options in their benefits. Disability insurance provides income replacement for a period while you are unable to work. Critical illness insurance, on the other hand, gives you a one-time lump sum payment in case you're unable to work, but also covers unforeseen expenses related to the affecting illness.
What do I do when my term life insurance expires?
Wondering what to do when your term life insurance expires? There are a few options you can consider if you still want to protect your loved ones financially:
- Renew the term insurance policy for another term (before the coverage expires).
- Covert the term insurance policy into permanent insurance (before the coverage expires).
- Shop for an entirely new life insurance policy.
Be sure to speak to a licensed life insurance broker for more details on your specific case. New policies typically come with higher life insurance rates due to aging, so if you’re opting for brand new coverage, compare term life insurance quotes to ensure you're getting the cheapest premium possible.
Can I cancel my term life insurance policy?
Yes, you can cancel your term life insurance at any time, simply by contacting your provider. But before you do, consider why you purchased the policy in the first place. You may want to consider alternatives, such as reducing your coverage, as biding a new policy often leads to higher premiums.
How do I buy term life insurance online?
If you’re looking to buy term insurance in Canada online, we’ve got you covered. By providing us with a few details in our term life insurance calculator, we’ll connect you with a licensed broker who will guide you through the application process of obtaining the coverage you need.
When does term life insurance payout?
A term life insurance policy will only payout in the event that the insured individual dies within the effective policy term. The reason for death must be a result of one of the covered reasons for the policy to payout to the beneficiary. If the insured individual does not pass away during the policy term, then a payout will never occur.
Is term life insurance tax-deductible?
The simplest answer is likely no it won't be, but there are a few situations where you may get a tax deduction if you use your life insurance policy as collateral on a loan. It's best to ask your personal accountant or a tax professional if it’s possible in your situation.
Check out our blog for more information on life insurance tax implications.
Is term life insurance worth it?
Term life insurance can be worth it, but this depends on your specific needs as a policyholder. If you have kids that depend on your finances and an outstanding mortgage that could be passed on, a term life policy can protect your loved ones while providing you with peace of mind.
On the other hand, if you have no debt and no dependents, a term life policy might not be worth the monthly premiums. You may also look into other life insurance products – such as whole life insurance – if you have long-term end-of-life goals, such as estate planning.