Calculate your ideal coverage amount and estimate monthly premiums — tailored for Canadian families
How the Coverage Formula Works
The most widely recommended formula for calculating term life insurance coverage in Canada is: Coverage = 10–12× Annual Income + Outstanding Debts − Liquid Assets. This approximation ensures your family can replace your income, pay off debts, and maintain their standard of living.
But this simple multiplier misses important variables: how many dependants you have, how long until they're financially independent, future education costs, and whether your spouse works. The interactive calculator below uses a more complete model.
Term Life Insurance Coverage Calculator
Recommended Coverage Gap:
10-Year Term Est.
20-Year Term Est.
30-Year Term Est.
Choosing the Right Term Length
Your term length should cover the period during which your death would cause the most financial hardship. The most common terms in Canada are 10, 20, and 30 years — and sometimes a 25-year term to match a mortgage amortization.
1
Identify your longest financial obligation. Usually this is your mortgage or the time until your youngest child becomes financially independent — whichever is later.
2
Add a 5-year buffer. Life doesn't go perfectly to plan. Build in extra time for children who may take longer to launch, career disruptions, or cost-of-living surprises.
3
Consider renewability and convertibility. If your budget only supports a 20-year term but you may want 25 years of protection, choose a product with guaranteed conversion rights so you can extend without new medicals.
4
Ladder your coverage if applicable. Buy a larger 20-year policy to cover peak obligations (mortgage, young children) and a smaller 30-year policy for long-term income replacement. As the 20-year policy expires, your coverage steps down naturally as your obligations decline.
Understanding Policy Features
Level vs Decreasing Term
In Canada, almost all individual term life insurance sold is level term: the coverage amount stays constant throughout the policy period, and so does the premium. This is what you want for income replacement and debt coverage.
Decreasing term (also called mortgage life insurance sold through banks) reduces the death benefit over time as your mortgage balance theoretically falls. The premium stays fixed. This is generally poor value — you pay a constant premium for shrinking coverage. An independent level term policy is almost always a better choice.
Convertibility
A convertibility option allows you to convert some or all of your term coverage to a permanent (whole life or universal life) product in the future, without evidence of insurability. You don't need a new medical exam — which is extremely valuable if your health declines. Most major Canadian insurers include this as a standard feature, but confirm the conversion window (typically until age 65 or 70).
Renewability
At term end, most policies can be renewed without new medicals — but at a dramatically higher premium based on your attained age. Renewal is essentially a last resort. If you still need coverage at term end, ideally you should have converted earlier or applied for new coverage while still healthy.
Term Life Insurance Rate Table — Canada 2026
Approximate monthly premiums for healthy non-smoker, $500,000 face amount. Male rates shown; female rates approximately 15–20% lower.
Age
10-Year Term
20-Year Term
30-Year Term
25
$19–$26
$30–$42
$46–$62
30
$21–$28
$34–$46
$54–$70
35
$24–$33
$40–$55
$68–$88
40
$35–$48
$62–$82
$108–$140
45
$55–$75
$95–$125
$168–$215
50
$88–$120
$165–$215
Not available
55
$145–$195
$275–$355
Not available
Smoker surcharge: Smokers pay 2.5–3.5× non-smoker rates. Quitting today and being smoke-free for 12 months can dramatically cut your premiums.
Common Term Life Insurance Mistakes
Buying too little coverage — Often due to sticker shock. But the monthly premium difference between $500,000 and $1,000,000 is often $15–$30 at younger ages. Buy adequate coverage while you're young.
Choosing the wrong term length — A 10-year term at 40 leaves you needing new coverage at 50, when rates have climbed significantly and health may have changed.
Relying solely on group insurance — Employer coverage disappears when you leave or are laid off. Supplemental individual coverage is essential.
Not naming beneficiaries — If no beneficiary is named, the death benefit goes to your estate and must pass through probate, delaying payment and potentially reducing the amount.
Hiding health history on the application — Material misrepresentation can void the policy. Be honest; the insurer can usually find out anyway through medical records databases.
Waiting until "later" — Each year you wait, premiums increase. A 30-year-old who waits until 35 to buy 20-year term may pay 30–50% more over the life of the policy.
Build Your Financial Foundation
KOHO's no-fee banking and automatic savings tools help Canadians keep more of every dollar — a great complement to protecting your family with term life insurance.
Gather your information: Date of birth, height/weight, current medications, health history, family medical history, occupation, and desired coverage amount.
Get quotes from multiple insurers: Use an independent broker — they compare across 15–30 companies. Direct-to-insurer applications miss alternatives.
Complete the application: Either online (for accelerated underwriting) or through a paper/e-application with your broker.
Underwriting: The insurer reviews your application. For large amounts, this includes a paramedical exam at your home or workplace — a nurse comes to you.
Policy issued: Once approved, review the policy document. You have a 10-day "free look" period to return it for a full refund if unsatisfied.
Set up pre-authorized payments: Most insurers offer a small discount for annual vs monthly payments.