Chat with us, powered by LiveChat

Get Your Life Insurance Quotes Today

Insurance

Birth Date
Contact

20 Year Term Life Insurance

20 Year Term Life Insurance is one of the most affordable and frequently purchased life insurance products available in Canada. This is because of many different factors but mainly the affordability and that 20 years of coverage suits most Canadians needs.

20 Year Term Life Insurance is a life insurance product that has premiums (the cost of the policy) that are level for 20 years. The death benefit (the coverage amount) is also level for 20 years. At the end of the 20 years the insurance policy typically renews automatically at higher premiums (higher cost), again level for another 20 years. This process can continue until the expiration date of the policy which is usually around age 75 for most life insurance companies in Canada.

20 Year Term Life Insurance Graph

Example

A 20 year term life insurance policy for $1,000,000 will have the same premium for the length of the term (20 years). It will also have the same coverage amount for the length of the term ($1,000,000).

If you use our free online instant quote generator on our website you will be able to compare the pricing from all top life insurance companies in Canada (instantly, for free). There is a link for the quoter at the top of this page.

Who Is 20 Year Term Life Insurance Designed For?

20 Year Term Life Insurance is commonly used by families who are looking to cover their mortgage debt (or other debt) and/or protect their family financially. Many families who have a young family will purchase 20 year term life insurance policy because it provides coverage until their children are adults and no longer financially dependent on them.

It is also used by business owners who are looking to cover outstanding debt of their business.

Benefits

  • Affordable when compared to other life insurance policies
  • Peace of mind knowing that your beneficiaries will receive a lump sum amount, tax free in the event of your death
  • The rates (cost of the policy) are guaranteed for the length of the term of the policy
  • Policies are very customizable which allows you to ensure that it suits the needs of you and your family
  • Renewable (see below)
  • Convertible (see below)

Renewable

Most life insurance companies in Canada have a feature available called “renewable” or “renewability” where they allow you to continue your 20 year term policy after the initial 20 years.

At the end of the initial 20 years, the insurance policy typically renews automatically at higher premiums (higher cost), again level for another 20 years. This process can continue until the date of the policy which is typically around age 75 for most life insurance companies in Canada.

The reason the premiums are higher after the first 20 years is because the insurance company does not require any health questions or medical evidence (blood, urine, etc.). They are assuming that something has changed in your health which is why the policy premiums increase. If you are in good health and still need life insurance at the end of the 10 year term, you are usually better off applying for a new policy to get a lower premium and cancel your old policy after the new policy is in force.

The longer the length of the term, the higher the premiums will be. For example, a 20 year term life insurance policy costs more than a 10 year term life insurance policy. We recommend contacting us to determine what policy is right for you.

Convertible

Most life insurance companies in Canada also have a feature called “convertible” or “conversion” which means that the policy owner is allowed to convert (switch) their term life insurance policy to a permanent life insurance policy (whole life, universal life, term to 100) without having to complete a medical exam or health questionnaire. You are just required to do a policy change where you complete some paperwork, select a permanent life insurance policy and pay premiums based on your age and smoking status.

Recommendation

When purchasing life insurance it is very wise to seek out independent, unbiased advice from a life insurance broker who represents all of the life insurance companies in Canada. Feel free to reach out to us by email or phone at 1-877-344-4011 to speak with one of our licensed brokers and determine what product is best for you and your family.