How term life works
- You choose an amount of coverage and a term, commonly 10, 20 or 30 years, or coverage to a set age
- Premiums are typically level for the term and may increase at renewal if the policy is renewable
- Many term policies can be converted to permanent coverage before a certain age without new medical evidence, according to the contract
- Death benefits paid to a named beneficiary are generally received tax-free in Canada
How much coverage do you need?
A needs analysis looks at what your family would have to pay for without your income:
- Mortgage and other debts
- Years of income your family would need to replace
- Children’s education and childcare
- Final expenses
- Minus existing savings and coverage, such as group life at work
I’ll walk you through the numbers in plain language. You decide what feels right for your family.
Term life versus mortgage insurance from a lender
Mortgage life insurance offered by a lender usually pays the lender, and the coverage may decrease as the mortgage is paid down. An individually owned term policy pays your chosen beneficiary, who decides how to use the money. Compare both before you decide.
The application
Applications include health and lifestyle questions and may include a paramedical exam or lab tests depending on age and amount. Answer completely and accurately. Misstatements can lead to a denied claim.
Coverage descriptions are general. Your policy wording, limits and exclusions determine what is covered. Availability and premiums vary by insurer and by your circumstances.