What are the best term life insurance?

Alexandre Desoutter Alexandre Desoutter  updated on 2020-11-25

Term life insurance is life insurance which you take out for a limited time period, such as 5 or 20 years, and which will pay out if you die within that time. You can use it to ensure your mortgage is repaid, or to make sure your family is looked after till your children have grown up.

How does term life insurance work in Canada?

When you take out life insurance, you pay a monthly premium in return for which, the insurer will pay out a lump sum to your family or other named beneficiary if you die during the term of the insurance or before you reach a certain age.

With term life insurance, you pick a certain period of cover when you buy the policy, and the insurance will only cover you if you die within that time.

Your premiums can increase when you renew the policy, for exemple, if you take a 5 years renewable contract, and you want to renew it, your premiums would increase.

What does term life insurance cover in Canada?

Life insurance is an insurance that will pay out to your family if you die.

It’s intended to make sure that your family won’t be financially ruined if anything happens to you. It can also pay out to make sure that a mortgage or other debt is covered – so even if you don’t have a family, your mortgage lender might ask you to take out a policy.

  • paying the mortgage on your family home, if you’re the sole breadwinner or you need both incomes to be able to keep up the payments;
  • looking after a dependent partner if you have very young children;
  • paying for university tuition for your children;
  • paying for full time childcare if a non-earning partner dies;
  • looking after an aged parent or disabled child, if you’re a carer;
  • repaying debts.

How much is term life insurance in Canada?

Let’s see what are life insurance quotes in Canada for different profiles :

  • TD 10-Year Term Life : $75 per month – or $862 per year for $400,000 term life insurance. This life insurance quote is for a 40 years old women, non smoker.
  • Manulife 10 year term life : $32.20 per month or $357.76 per year for term life insurance for 10 years. This life insurance quote is for a 40 years old women, non smoker.

Is term life insurance a good idea?

The big pluses of term insurance are that it’s cheaper than permanent life insurance and gives you certainty, but it does have disadvantages too.

  • It’s cheap, compared to whole-of-life
  • you can set the term that works for your particular circumstances
  • you know exactly what lump sum will be paid out if the worst happens
  • if no claim is made, your premiums are ‘lost’. There’s no chance to surrender the policy as there is with a permanent life insurance.

What are the best life insurance in Canada?

Here are the best term life insurance in Canada :

Life insurance companiesDetails
td life insurance
  • Coverage up to $10 million
  • Automatic renewal for 10 and 20 year plans
  • Tax-free cash benefit
  • 10 or 20 years term life insurance
RBC life insurance
  • Offers convertible term insurance
  • You can renew your life insurance at the end of the term
  • Coverage Available: $50,000 – $1.000,000
  • Starting from $12.67 per month
  • Accidental Death Benefit
sunlife life insurance
  • Different term life insurance : Simplified or normal term life insurance
  • Different types of term life insurance that can fit every profile
  • Terms of 10, 15, 20 or 30 years
Manulife life insurance
  • Different kind of term life insurance family, business, solo…
  • $100,000 to 20 million in coverage for Family term life insurance
BMO life insurance
  • Coverage from $50,000 to $5 million
  • 10, 15, and 20 year renewable term options
Best term life insurance in Canada

What happens at the end of my level term life insurance policy?

When you reach the end of a term-life-insurance, you stop paying the premiums. That’s it. If you’re still alive, the insurance doesn’t have to pay out. Just as happens with your home or car insurance, you’ve paid the premiums and you didn’t make a claim. There is no refund. Term insurance policies don’t include cash value.

What is the difference between renewable and convertible term life insurance?

You can also choose between two term life insurance :

  • Renewable term life insurance: your coverage automatically renews at the end of the term.
  • Convertible Term Life Insurance: your can convert your coverage to a permanent life insurance policy. Good point, if you choose this policy, you won’t have to answer any medical questions.

All life insurance are not renewable or convertible, most of life insurance just stop when the term ends.

Should you take out single or joint term life insurance policy?

This isn’t quite as easy as it looks, because two single life policies aren’t quite the same as a joint policy. If you and your spouse or partner take out a joint policy, it will only pay out when the first partner dies. That might be all you need if it’s to pay off the mortgage, but then again, you might need more protection if you have young children. A joint life insurance policy covers two lives but will only pay out on one death.

A single life policy covers one individual only. If you have a single policy, and your partner has a single policy, then if either of you dies, the relevant policy will pay out and the other policy will be unaffected.

How much life insurance do you need?

Well it depends on so many things. It depends on your age, your own situation, your health…

First things to calculate how much life insurance you need:

  • Debts : do you have any debts?
  • Mortgage: do you have a mortgage? how much do you owe on your mortgage?
  • Income: how much do you need to have a standard life?
  • Education: how many kids do you have?
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