Term Life Insurance in Canada (2025)

Are you searching for the best term life insurance in Canada? Unsure which coverage is right for you? Term life insurance is one of the simplest life insurance options, offering straightforward protection without any savings or cash value component. It guarantees a death benefit payout to a designated beneficiary if you pass away within a specified term. Your coverage amount and premiums remain fixed throughout the policy’s duration. This means that should you die during the term, your loved ones will receive the payout, which they can use however they see fit.

While life insurance is often top of mind when it comes to protecting your loved ones, we also take a broader view of your insurance needs. Insurance plays a crucial role in providing financial security: it can replace lost income if you become disabled, cover tax obligations after your passing, and offer peace of mind to your family.

Term life insurance can help ensure your family’s financial stability by covering income replacement, paying off mortgage debts, settling final expenses, or even sustaining a business. The premiums for term life insurance remain fixed throughout the term, offering protection aligned with your future income, debts, dependent family members, and other financial obligations.

What is Term Life Insurance?

Term life insurance is an affordable life insurance policy that gives you financial protection for a certain period of time. Term insurance can be simpler and more affordable than other types of life insurance products. It’s temporary life insurance coverage that can help protect the financial security of those you care about. If you die while your policy is still active, then your beneficiaries receive a lump-sum, tax-free payment. This payment is called the death benefit. A beneficiary is a person or entity you name in your life insurance policy to receive a guaranteed tax-free payment should you pass away. The money can be used to pay bills, the mortgage, or any way they please.

Did you know, you can save money by replacing your current mortgage insurance with term life insurance? Keep the coverage even if you move! Term life insurance is temporary coverage that provides the people or charities you name as a beneficiary with a tax-free payout if you die within the term you choose. The money can be used to pay bills, mortgage, kids’ education or to keep your business running. The payments you make, called premiums, are set for the term you choose and won’t change during that period.

Benefits of Term Life Insurance

Affordable coverage when you need it. Life insurance doesn’t have to be a lifelong commitment. Term life is affordable coverage for your big expenses, so your loved ones are protected when it matters most. The payments you make, called premiums, are set for the term you choose and won’t change during that period. Payments are fixed and don’t change for the period you choose. Most term plans offer instant temporary coverage. Temporary coverage lasts up to 90 days. With temporary insurance, you’ll get coverage after you submit your life insurance application and pay any required premiums.

How Does Term Life Insurance Work?

Term coverage provides protection for a fixed payment amount, for a given number of years. A term life insurance policy is a contract between you and an insurance company for a defined period, typically between 10 and 30 years. You can choose the amount of time you need. During that term, you promise to pay a premium each month. In return, the company promises to pay a specific amount of money if you pass away during the term.

When Do You Need Term Life Insurance?

Starting a Family: Provide income replacement to help your partner and kids
Buying a Home: Make sure your family can still pay off large expenses, like a mortgage
Planning Ahead: Leave a legacy to help your family cover education and funeral costs and provide for future income

What Does Term Life Insurance Do?

Choose the coverage amount and term length you want. Customize your coverage with additional benefits. Pay the monthly or annual premiums. When the term is up, your policy will automatically renew each year, or you can end it or convert it to longer-term or permanent life insurance, within limits. If you die while your policy is active, the people or charity you named as a beneficiary receive a tax-free payout.

Which is Better Term or Whole Life Insurance?

In general, term life insurance is more affordable than whole life insurance. There are a few factors that can affect the price of your policy. Generally, insurance is less expensive when you’re younger. Family history, chronic diseases and lifestyle can increase costs. Women live longer than men on average, so their insurance may cost less. If you have a dangerous job, the cost to insure you can be higher.

How Much Insurance Do You Need?

Ideally, you want to make sure your debts are covered, so you don’t leave major expenses behind for your loved ones. Consider your future income, net worth, family needs and debt. $500,000 – $1,000,000 of coverage is sufficient for the average Canadian.

How Long Do You Need Term Life Insurance?

Again, you want to make sure your debts are covered, so you don’t leave major expenses behind for your loved ones. Consider the length of your mortgage, and age of dependents. 15 – 25 years of coverage normally meets these requirements.

Nic Tustin, BA Econ

I used my experience from Sunlife, BMO, TD, Edward Jones and Canada Life to create apps to help investors pay fewer fees and income tax. I have a degree in Economics from the University of Waterloo, and financial industry designations such as the Canadian Securities Course (CSC), Conduct & Practices Handbook (CPH), Wealth Management Essentials (WME)and LLQP. I primarily focus on tactical asset allocation by actively balancing portfolios to reduce market risk. I’ve built my business on a foundation of integrity, due diligence, and innovation. I have the essential resources and financial expertise to implement these sophisticated strategies and help you understand how the variables, such as length of investment, liquidity of the investment, inflation rate, income taxes, market fluctuations, and interest rate risks can impact the results you want to achieve long term.