Updated: April 2025  |  bremo.io financial guides

Canada Term Life Insurance: 2025 Guide

Term life insurance is the most straightforward and affordable way to protect your family in Canada. You pay a fixed monthly premium for a defined period — typically 10, 20, or 30 years — and if you die during that term, your beneficiaries receive the death benefit tax-free. If you outlive the term, coverage ends and you can renew, convert, or purchase new coverage. This guide explains everything you need to know about term life insurance in Canada.

How Term Life Insurance Works

When you purchase a term policy, you choose: the coverage amount (death benefit), the term length, and the beneficiaries. You pay monthly or annual premiums, which are fixed for the term. If you die while the policy is in force, the insurance company pays the death benefit directly to your named beneficiaries. The payment is tax-free under Canadian income tax law.

Available Term Lengths

Most Canadian insurers offer the following term options:

• 10-year term — Cheapest option, good if coverage need is short-term
• 20-year term — Most popular choice, covers working years with mortgage and young family
• 30-year term — More expensive but provides coverage to age 60–65 for buyers in their 30s
• Term to 65 — Coverage until age 65, natural retirement transition point

Term Life Insurance Rates in Canada 2025

Monthly premiums for a healthy non-smoker for $500,000 coverage:

• Age 30, 20-year term: approximately $30–$45/month
• Age 35, 20-year term: approximately $40–$60/month
• Age 40, 20-year term: approximately $65–$100/month
• Age 45, 20-year term: approximately $110–$160/month

Women typically pay 15–25% less than men for the same coverage due to longer life expectancy statistics.

Renewal and Conversion Options

At the end of a term, you can: renew at a higher premium (based on your new age), convert to a permanent policy (without new medical underwriting, if within the conversion period), or let coverage lapse if you no longer need it. The renewal option guarantees you can continue coverage regardless of health changes during the term — a valuable feature.

Convertible Term Policies

Many term policies include a conversion privilege allowing you to convert to a permanent policy without medical underwriting. This is valuable if you develop a health condition during the term that would otherwise make new coverage expensive or unavailable. Conversion rights vary by policy — confirm the conversion deadline before purchasing.

Best Canadian Term Life Insurers

Top term life insurance providers in Canada include Manulife, Sun Life, Canada Life, Empire Life, iA Financial, and Desjardins Insurance. Rates are competitive across these carriers, so comparing quotes through an independent broker will find the best rate for your specific situation. All are well-capitalized, financially strong companies.