Term Life Insurance Explained

If you’re new to buying term life insurance, here’s what you need to know.

Term Life Insurance at a Glance

Term life insurance is also known as temporary life insurance, is by and far the most popular and well-known of life insurance plans available in Canada.

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Term life insurance is bought and held for a set period of years, often in 10, 20, or 30 year terms, though other term lengths do exist. During this term, the life insurance company, or insurer, is bound to pay a sum of money, known as a coverage amount, in the event that the person insured should die. This amount is paid to designated beneficiary and may be used for any purpose.


Once a term expires, it may be renewed at adjusted rates, also known as premiums. Oftentimes, renewing a life insurance policy does not require the insured to be subject to a medical exam, which means that these renewals are guaranteed.

Benefits of Term Life Insurance

There are numerous benefits to a term life insurance policy including being the most affordable type of life insurance.

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Key benefits of term life policy are:

  • It is the most affordable type of life insurance.
  • You are able to get a large amount of coverage at low cost.
  • Fixed premiums for the length of the term.
  • The benefit is paid tax-free.
  • You are able to renew your policy without a health exam.
  • You are able to convert your policy to a permanent plan.

What Can Your Insurance Coverage Protect?

Any assets or debts you want to protect can be covered with the right life insurance policy. While everyone has their own unique circumstances that drive them to get term life insurance policies, there are some of the common scenarios to consider.

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  • You’ve just bought a home, and you want to ensure that the home will stay in your family’s hands, even if a death in the family would make it difficult to make mortgage payments.
  • You are raising children, and you want to make sure they’ll have access to the right education and care if you’re weren’t around to provide for them.
  • You own significant property, assets, or investments, and you want to pass them down without the beneficiaries being subject to capital gains taxes.
  • You own a business, and you want to ensure that it will have the capital to continue operations without you leading the way.
  • You want to build insurability for a child in order to give them a range of financial options when they reach adulthood.

Your Guarantees with Term Life Insurance

When you own a term life policy, your policy allows you some guarantees which ensure that your policy is exactly what you need it to be.

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Nearly all term life policies in Canada are level term, which means they offer guaranteed coverage amounts and cost the same amount from year to year regardless of how long the term has been in effect. A level term ensures that the value of your insurance doesn’t change unless you need it to.


You also often have the guarantee to renew up to a certain period. When your policy expires, you have the option to renew it without going through the application process again, allowing you to avoid unnecessary medical exams or doctor’s visits. It also means that the earlier you buy term life insurance, the more stability you will have later on in life, when getting insured can be more difficult.

Getting Insured Without a Medical Exam

For individuals concerned that their health or insurance history may make it difficult to get life insurance, we offer No Medical term life coverage that can be obtained without the need for a medical exam or doctor's visit. To learn more about this type of insurance, please Click Here

There’s A Range of Options That Can Help You

The Canadian insurance industry is rife with term life insurance options available to you. But finding the right one without some guidance can be difficult.

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When you’re ready to create a financial plan for your loved ones, we encourage you to begin with our free, no-obligation quote form. We search on behalf of your best interests for the best term life insurance rates on the market. It takes only a minute to fill out, and you’re under no obligation to accept a quote you don’t feel is in your best interests.


Knowledge CENTRE

Learn more about Term Life Insurance and see how a policy can work for you with these helpful tools and resources.

TIPS

We’ve provided these helpful tips for creating the right insurance plan.


Q&A

We address some of the most common questions about life insurance.


Calculator

Calculate how much term life insurance you need.