What term life insurance is
Term life insurance provides a death benefit for a set number of years. If you pass away while the policy is in force, the insurer pays your beneficiaries. If the term ends and the policy is not renewed or converted, coverage stops.
Because the insurer is only on risk for a defined window, term is generally the least expensive way to buy a large amount of coverage at younger ages.
Common term lengths
Not every insurer offers every length, and features differ between contracts. Always read the specific policy wording.
- 10-year term — often the lowest initial premium, common for shorter obligations
- 20-year term — frequently used to cover child-raising years or a mortgage
- 30-year term — longer price certainty for younger buyers with long horizons
- Term-to-65 or similar designs offered by some insurers
Level premiums during the term
Most term contracts in Canada are structured so the premium stays level for the selected period. That is a contractual feature of the plan you buy, not a universal rule — some plans step up in cost annually or at set intervals. Confirm the premium schedule shown in your illustration and contract.
Renewability
Many term policies are renewable at the end of the term without new medical evidence. Renewal is usually automatic but at a substantially higher rate that reflects your age at that time. Renewal typically stops at a maximum age stated in the contract.
If your need continues past the original term, comparing renewal against a fresh application or a conversion is worth doing before the deadline.
Convertibility
A conversion privilege lets you exchange term coverage for a permanent policy without answering new health questions. This can matter a great deal if your health changes after you first apply.
Conversion deadlines, eligible permanent plans and whether partial conversion is allowed vary by insurer and by contract.
Typical use cases
- Covering a mortgage on personally owned terms rather than through a lender's creditor product
- Replacing income for the years a family depends on it
- Protecting a business loan or a fixed-term obligation
- Adding a large, affordable layer of coverage while budgets are tight
What drives the price
Preliminary quotes are illustrative. The final premium is confirmed only after underwriting.
- Age at application and nicotine use
- Health history, build and family history
- Coverage amount and term length
- Occupation and certain travel or hobbies
- The individual insurer's underwriting and pricing rules
Term compared with permanent
Term generally costs less at the outset and covers a defined window. Permanent coverage is designed to last for life under the contract's terms and can build value in some designs, at a higher initial premium. Many households layer both — a term policy for temporary needs and a smaller permanent policy for lifelong ones.
Common questions
What happens when my term ends?
Depending on the contract, coverage may renew automatically at a much higher premium, may be convertible to a permanent policy without new medical evidence, or may simply end. Check the renewal and conversion provisions in your specific policy.
Can I convert term insurance to permanent coverage later?
Many term contracts include a conversion privilege that lets you move some or all of the coverage to a permanent plan without answering new health questions, usually up to a stated age or deadline. Availability and eligible plans vary by insurer.
Which term length should I choose?
Match the term to the responsibility. People often align it with the years remaining on a mortgage or the years until children finish school. Longer terms cost more per year at the start but lock the price in for longer.
Keep reading
The full overview: types, coverage amounts, underwriting and premiums.
Term vs permanentCompare duration, cost, conversion and cash value side by side.
Permanent life insuranceHow lifelong coverage designs work.
Get preliminary quotesSee illustrative pricing before starting any application.
Written and reviewed by Mathew Cordeiro, a licensed life and health insurance broker serving Ontario through Bluebird Assurance. This page is general information only, not financial or insurance advice. Coverage, features, eligibility and pricing vary by insurer and are subject to underwriting and policy terms.