Individuals & Families

Term Life Insurance

"Term" refers to the amount of time that your rates are guaranteed. To for example, Term 10 Life Insurance would guarantee your rates for ten years; Term 20 Life Insurance would guarantee your rates for 20 years, etc.

We generally use Term Life Insurance for one of two reasons:

• To control costs (Term 10, or T10 is generally the least expensive life insurance available in the short term)
• To cover an insurance cost that will go away over time. For example, using a Term 30 Life Insurance policy (or T30) as Mortgage Insurance, with the the idea that in 30 years your mortgage will be paid off and you won't need that insurance any more Term lengths for Term Life Insurance can vary from 5 Year Renewing Term (which goes up every five years, usually based on your age) to Term 10 Life Insurance, Term 20 Life Insurance, Term 25 Life Insurance, all the way up to Term 35 Life Insurance

For those who are later in life and want to guarantee their rates, we also have access to Term 100 Life Insurance that will guarantee your insurance costs for the rest of your life.

• T10 When budget is the biggest concern Can be very inexpensive to start. Guaranteed for only 10 years then expensive renewal

• T20 Budget is some concern, covering mortgage, young kids Better guarantee period than Term 10. Expensive to renew coverage after 20 year term expires

• T30 Longer term needs with fixed end date: growing kids, mortgage, income protection Will generally cover many working careers and mortgage lengths. Potential for big sticker shock at the end of 30 year term.

• T100 To cover final expenses, tax burdens, etc. later in life Minimum age to qualify (usually 55 or 60), will have to keep paying for life (unlike some permanent insurance)

Question: So if it's the cheapest insurance available, why doesn't everyone use it?

Answer: Good question! We said it was the cheapest in the short term. The one catch to Term Insurance is that at the end of the guarantee period, the price generally increases dramatically -- an increase of 500% isn't uncommon. So a lot of people will choose to either go with a Permanent policy from the start, or plan to convert their Term policy to a Permanent one down the road. As well, Permanent Insurance can build up cash values that can be used for other purposes (as a policy loan, for long term care or to take a holiday from premiums, for example. With Term insurance, you have to keep paying your premiums or your policy will expire.

Question: What's the difference between Term 10 Life Insurance, Term 20 Life Insurance and Term 30 Life Insurance in terms of costs?

Answer: Term 10 will be the least expensive in the short term. But because of renewal costs longer guaranteed terms often end up working out better in the long run.