Skip to main content
Ratehub logo
Ratehub logo

Compare term life insurance quotes

Looking for term life insurance in Canada? We’ve got you covered – get a personalized term life insurance quote with us today, so you can secure the coverage you need.

compare term insurance quotes

What is term life insurance?

Term life insurance is a life insurance product that guarantees a death benefit payout to the stated beneficiary within a specific period of time, typically from five to thirty years. When you buy term insurance, your coverage amount (death benefit) and premiums (monthly or annual payments) lock in for the entire term or length of the policy.

When your term expires, you may have the option to renew your policy for a higher cost due to being older or let your coverage expire. Some policies also let you convert to whole life insurance or universal life insurance, typically between one and five years before the policy ends.

When you buy term life, you choose the term length (how long you want to be covered for) and your coverage amount (how much you want your beneficiary to receive when you die). If you die within the term set out by your policy, your life insurance company will pay the coverage amount, also known as the death benefit, to your beneficiary.

When to buy term life insurance in Canada

Term life insurance is best for those that have a temporary need for life insurance. And this temporary need can extend for many years – in most cases, you can renew your term insurance policy for a longer period or convert it to permanent life insurance before it expires. 

Some examples of when to buy a term insurance policy include:

  • If you have a mortgage – Assuming you don’t have mortgage life insurance, term life insurance can leave your family with enough money to pay it off if you die.
  • If you have young children – Term life insurance can provide for your young children if you pass and help fund their future education. 
  • If you need the coverage for pre-retirement – A term insurance policy can provide you with the coverage you need while you're expected to work. For instance, a 25-year term policy that begins at age 40 can cover the critical time of raising kids and paying down a mortgage. 
  • If your partner is going back to school – Term life insurance can be especially helpful when your household is dependent on one person’s income. In this case, a five-year term policy could be a good idea. 

Why Ratehub.ca?

A few things we're proud of

  • 1,200,000

    monthly users

  • 11 years

    young

  • Over 1M

    better choices made

  • Trusted partner

    to Canada’s top financial institutions

Types of term life insurance

Despite being a relatively easy to understand product, it's important to know the differences and options you have for a term life policy.

Level term, otherwise known as a level premium policy, is a standard term insurance policy where both the premium and death benefit remains fixed for the life of the term. The premiums for a level term policy are slightly higher than a yearly renewable term life insurance policy because the insurers must account for the increased likelihood of death as you approach the end of your policy. 

Term vs. whole life insurance in Canada

 

Product features

Term life insurance

Whole life insurance

How long is the term?

1-100 years

Long term coverage as long as you pay the premiums

Average cost? (female, 30 years old, $100,000 benefit)

$10-$15 monthly
(25-year term insurance)

$50-$60 monthly

Does it build cash value?

No

Yes

Fixed cost?

Fixed for the life of the term

Fixed for the entire policy

Can you loan or withdraw money from the policy?

No

Yes

Convertible?

Yes, can convert to a permanent life policy

No

What is it best for?

Protecting family, assets, and investments

Complex financial plans and estate planning

How much term life insurance do I need in Canada?

One of the most important choices in choosing a life insurance policy is deciding how much coverage you need. There are a number of different questions to ask that will influence your decision:

  • Your family situation – If you have young children, how much money would it cost to raise them?
  • Your debts – How much do you owe on your mortgage and other loans? Who will be responsible for making payments if you pass away?
  • Your income – How much do you make after-tax each year? How long will your family need your income to be replaced?

To learn more about how to calculate the amount of life insurance you need to purchase, read our blog on the topic: How much life insurance coverage do I need?

Renewable vs. convertible term insurance

Renewable term life insurance is coverage that automatically renews at the end of the term. If your coverage expires after 10 years, you’ll automatically be renewed into a new 10-year term. When you choose renewable term life insurance, your premiums will increase at renewal, so it’s a good idea to compare life insurance quotes before your term expires.

Convertible term life insurance gives you the option to convert your term life insurance policy to a permanent life insurance policy. The primary benefit of having a convertible policy is that you won’t have to pass a medical exam to get permanent coverage. If you’re diagnosed with a serious illness while you have a convertible term life insurance policy, you can convert to a permanent life insurance policy you might not otherwise have been able to get. Learn more about this by reading our article on renewable and convertible life insurance.

In the market for term life insurance?

Term life insurance rates can vary wildly, and you won't know what you're eligible for until you get a quote. Compare term life quotes for free to find the best rate today.

Coverage calculator: term insurance case study

The amount of coverage you choose is up to you. You might decide to buy enough term life insurance to replace your salary for a certain number of years, enough to pay off your mortgage, or just enough to cover funeral expenses. There’s no rule against having multiple life insurance policies, so you can buy additional coverage any time you need it. Here’s one example you can use to help determine the amount of coverage you need on your term insurance policy. 

Mike is 35 years old and married. He earns an annual salary of $70,000, has two children under 5 years old, and has an outstanding $350,000 mortgage with 20 years left to pay off.

  • Cost to raise two children to age 18: $500,000
  • College tuition for two children: $50,000
  • Five years income replacement: $350,000
  • Mortgage: $350,000
  • Term length: 20 years
  • Term life insurance coverage: $1,250,000

Mike’s major expenses are the cost of raising his children and his mortgage. In this case, it makes sense for Mike to choose a 20-year term. After 20 years, his kids will be over 18, and his mortgage will be paid off. At that time, he can save money on life insurance by renewing at a lower coverage amount. 

How to extend your term life insurance coverage

Some term life insurance providers allow you to purchase extended coverage, or riders, to cover you for other circumstances – here are a few examples: 

  • Critical illness provides a payout if you develop a life-threatening illness (e.g. cancer, stroke).
  • Disability insurance provides a payout in case you're unable to work for a long period of time. 
  • A children’s rider, which pays out in the event your child dies, can be added to your policy.
  • Accidental death pays an additional benefit if your death is the result of an accident.
  • Disability waiver of premium allows you to stop paying your premiums if you become disabled.

Ratehub.ca is not affiliated or otherwise associated with Hub International Canada.

FAQ

Common questions about term life insurance

Which is better: term life or whole life insurance?


Can I sell my term life insurance policy in Canada?


What is the best term life insurance to buy in Canada?


Can you cash in your term life insurance?


Does term life insurance cover accidental death?


Does term life insurance cover disability?


Can a term life insurance policy expire?


What do you do when your term life insurance expires?


How do you buy term life insurance online?


Author Bio

Matt Hands, Business Director of Insurance

Matt started his professional career at CARPROOF where he honed his marketing and analytical skills for over 3 years. Matt then took his wealth of experience to Ratehub.ca’s Toronto offices, working with insurance providers, agents, and brokers to grow and expand the Insurance business unit. He is a thought leader in the community and a valuable insurance resource to respected publications like the Globe & Mail, Toronto Star, Huffington Post, Yahoo News, and 680 news radio in Toronto.

read linkedin bio

The knowledge bank

A wealth of wealth knowledge delivered right to your inbox

By submitting your email address, you acknowledge and agree to Ratehub.ca‘s Terms of Use and Privacy Policy. Contact us for more information. You can unsubscribe at any time.

About Ratehub.ca

Whether you need a mortgage, credit card, savings account, or insurance coverage, we help you find and compare the best financial products for your specific needs.

When it comes to mortgages, Ratehub.ca is more than just a place to research and compare the best rates. Our goal is to give Canadians the best mortgage experience from online search to close. This means offering Canadians the mortgage tools, information and articles to educate themselves, allowing them to get personalized rate quotes from multiple lenders to compare rates instantly, and providing them with the best online application and offline customer service to close their mortgage all in one place.

Ratehub.ca has been named Canada's Mortgage Brokerage of the Year for four years straight (2018-2021). With over 12 years of mortgage experience, and over $11 billion in mortgages funded, we deliver you the best mortgage experience in Canada.

How does Ratehub.ca make money?

Financial institutions pay us for connecting them with customers. This could be through advertisements, or when someone applies or is approved for a product. However, not all products we list are tied to compensation for us. Our industry-leading education centres and calculators are available 24/7, free of charge, and with no obligation to purchase. To learn more, visit our About us page.

read more about us