1How Term Life Works
You choose an amount of coverage and a length of time. You pay a premium that normally stays the same for the whole term. If you die during the term, the insurer pays the full amount to your beneficiaries, tax-free. If you outlive the term, the policy has done its job: your family was protected through the years they depended on you.
Term life has no savings or investment part. That is exactly why it costs so much less than permanent insurance for the same amount of coverage.
2Choosing the Length
Match the term to the need it protects:
- Mortgage: the years left on it, so the house is never at risk.
- Children: until your youngest is independent.
- Income: until you plan to retire, when your family no longer relies on your pay.
Many families combine two policies, for example a 20-year term for the mortgage years and a smaller 10-year term for the busiest years of raising children. Our quote shows 10, 20 and 30 years and term to 65 side by side.
3Renewal and Conversion
Most term policies can renew at the end of the term without new medical questions, but the renewal premium is based on your age at that point and is usually much higher. Many term policies can also be converted to permanent insurance without new medical evidence, up to an age set in the policy. If your health changes, conversion can be valuable, so your advisor points out the renewal and conversion terms of each plan before you apply.
4How Much Coverage
Add up what your family would need without you: debts and the mortgage, the years of income they would have to replace, and future costs such as your children’s education. Subtract savings and any coverage you already have, for example through work. Our guide on how much life insurance you need walks through it.
5Term or Permanent?
Term protects the years when people depend on you. Permanent insurance is for needs that last your whole life, such as final expenses, estate taxes or leaving an inheritance. See term vs whole life, or compare both in one quote.
6Frequently Asked Questions
Is term life insurance tax-free in Canada?
Yes. The death benefit paid to a named beneficiary is generally tax-free in Canada.
What happens when my term ends?
Coverage stops unless you renew it, usually at a higher premium based on your age then, or convert it to permanent insurance if your policy allows.
Do I need a medical exam?
It depends on your age, the amount and the insurer. Many applicants answer health questions only, and no-medical plans exist. See our no-medical life insurance guide.
Can I cancel a term policy?
Yes, you can stop paying and cancel at any time. Term life has no cash value, so nothing is paid back.
Is it cheaper to buy through EGE?
You pay the same price as buying from the insurer directly. Insurers pay us, never you.
Ready When You Are
Decide with real prices and honest answers. When you want help, a licensed advisor goes through your application with you and explains your coverage, in your language.