Term Life Insurance
Discover the benefits and types of plans for term life insurance at Dundas Life.
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Compare Term Life Insurance Quotes
Monthly insurance rates for a 20-year term for healthy adults based on Dundas Life policies in 2025.
Get QuoteWhat is Term Life Insurance?
What is it?
Term life insurance provides coverage for a specific period, such as 10, 20, or 30 years. If you pass away during that time, your beneficiaries receive a death benefit. Unlike permanent life insurance, it doesn’t accumulate cash value or include investment features, making it a straightforward and affordable option for families. Because it only offers coverage for a set term, it is often considered the simplest form of life insurance.
How does it compare to permanent life insurance?
Term life insurance provides temporary coverage for a set number of years at a lower cost, while permanent life insurance lasts a lifetime and includes a cash value component that can grow over time. Since term life insurance is more affordable, it has grown in popularity—term life policy purchases increased by 11.8% in 2022-23, compared to only a 3.6% increase in whole life insurance policies. However, if you outlive a term policy, there is no payout unless you choose to renew or convert it.
What is it used for?
Term life insurance is commonly used to provide financial security during key life stages when expenses and responsibilities are highest. It can replace lost income, cover outstanding debts like a mortgage or student loans, and help pay for future expenses such as a child’s education. Many people use it as a way to ensure their loved ones are financially protected while they work toward building savings and assets. Whole life insurance, on the other hand, is typically used for wealth generation and estate planning.
How does it work?
When you purchase a term life policy, you agree to pay a fixed premium for the duration of the term. If you pass away during this time, your beneficiaries receive a tax-free lump sum or installment payments. The insurer determines your premium based on factors like age, health, smoking status, and the coverage amount you choose. Most policies are level-term, meaning the premium stays the same throughout the contract. If you outlive the policy, it expires with no payout, but you may have the option to renew at a higher rate or convert it to a permanent policy without a medical exam.
How do policies work?
Term life policies typically last between 10 and 35 years, or until a specific age, such as 65 or 80. Premiums are based on personal factors, including health, lifestyle, and the length of coverage. If you pass away within the term, your beneficiaries receive the death benefit, which is usually tax-free unless it is paid to an estate. If you outlive the policy, you can choose to renew at a higher cost or convert it to a permanent policy without additional medical exams. Since life insurance rates increase with age, renewing or converting later in life will come with higher premiums.
Term Life Policy Features
Term life insurance offers a variety of features:
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Simple, straightforward coverage
Monthly cost of $25-$75
10-35 year policy length
Death benefit payout
Joint policy option
30 day grace period and cancel anytime
We’ll help you implement a plan that works for you.
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Term vs Whole Life Insurance
What are the advantages of term life insurance?
Affordability
Term life insurance rates are cheaper than whole life insurance because it offers coverage for specific years and doesn’t include a savings component.
Family Suitability
Because it is more affordable than permanent life insurance, it often offers a better value for young families in Canada. Many young families are stressed by money, shouldering the costs of a mortgage, raising children, and other expenses. Term life insurance allows them to protect their family’s financial future without breaking the bank.
Flexibility
Term life insurance is highly flexible. You can pick the terms and coverage that best fit your needs. For instance, if you want to cover a long-term debt, like a mortgage, you can lock in low rates for the next 20 or 25 years. On the other hand, if you want to cover your tuition expenses, a 10-year term policy might be a good match.
Simplicity
Term life insurance policies are much easier to understand than permanent life insurance. You must make only three decisions: preferred insurer, coverage amount, and term length. The insurer provides you coverage for the entire term, provided you pay premiums on time.
Permanent life insurance conversion
Most term life insurance policies come with a "term conversion rider." It allows you to exchange a term life policy for a permanent one without submitting proof of insurability. The primary reasons Canadians purchase life insurance are to cover final expenses, provide financial security for loved ones, and pay off debts like mortgages. These financial obligations are temporary, making term life insurance the ideal choice. Whole life insurance, on the other hand, is typically used for wealth generation and estate planning.
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How Much Do I Need?
When evaluating life insurance options, it's important to choose a policy that aligns with your personal needs and long-term goals. The more coverage you select, the higher your premiums will be.
To determine how much coverage you need, start by considering how long your income will need to be replaced. Will the payout be required until your spouse finds employment, your kids become financially independent, or long-term debts like your mortgage are paid off?
Next, consider your annual salary and multiply it by the number of years for which your family will need the funds. Now, consider any debt you may have (mortgage, vehicle loans, credit loans, etc.).
Subtract the value of all your current savings from the total amount you owe and add this figure to the previous one. The resulting figure is a rough estimate of the amount of coverage you need.
Use Our Life Insurance CalculatorTo determine how much coverage you need, start by considering how long your income will need to be replaced. Will the payout be required until your spouse finds employment, your kids become financially independent, or long-term debts like your mortgage are paid off?
Next, consider your annual salary and multiply it by the number of years for which your family will need the funds. Now, consider any debt you may have (mortgage, vehicle loans, credit loans, etc.).
Subtract the value of all your current savings from the total amount you owe and add this figure to the previous one. The resulting figure is a rough estimate of the amount of coverage you need.
How Much Will it Cost?
Term life insurance has an end date, which is less expensive than permanent life. How much you pay depends on many factors, such as:
Insurers give younger applicants better rates than older shoppers
Age
Insurance companies reward healthy applicants with lower premiums
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Health
Women live longer than men and, as such, get better life insurance rates
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Gender
Premium rates go up as the coverage amount increases
Amount
The greater the term length, the more coverage will be paid
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Term Length
If you have a job or a hobby that puts you at risk, expect to pay more
Job/Hobbies
Insurers charge smokers two or three times more than non-smokers
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Tobacco Use
A family history of heart disease or cancer can increase your premium rates.
Family History
Term Length Options
Term insurance policies come with various term length options, allowing you to choose the duration that best fits your needs. Selecting the correct term length ensures that your policy aligns with your financial goals and obligations, providing the necessary protection when needed.
10-year term
Provides temporary coverage at affordable rates; suitable for short-term financial responsibilities, such as students or car loan payments.
20-year term
Balances cost and coverage duration; ideal for longer-term financial responsibilities, such as newly married couples or young children.
30-year term
Provides long-term peace of mind; best for an extended period, such as until children are financially independent or a mortgage is paid off.
What Customers Are Saying
Got Questions?
We have answers.
Our licensed advisors are here to discuss your personal situation and needs.
What are the different types of term life insurance?
Level-premium
Premiums and the death benefit remain the same throughout the policy term.
Annual renewable
The term lasts one year. You can renew the policy at the end of the term. Each year you’ll pay more than the previous one. ART policies are best for covering short-term debt obligations. For example, if you have a car loan but plan to sell it in the near future, an ART policy offers an affordable way to protect yourself within this period.
Decreasing
The death benefit decreases over time, while the premiums usually remain unchanged. People buy decreasing-term life insurance to cover a specific debt, like a mortgage, though we prefer life insurance.
No medical exam
You don’t need a medical exam to get coverage, though you may have to answer a few health-related questions.
Group
Group term life insurance is a policy that is available for free or at a low cost through your work. It is an excellent option to consider if your workplace provides it.
What are some disadvantages of term life insurance?
Term life insurance policies expire after your initial term and don't build cash value. Make sure to do your research.
Is term life insurance worth it?
Yes, it is. Consider the potential advantages and disadvantages of term life insurance and whole life insurance. If there’s someone you care about who depends on you financially, purchasing life insurance should be at the top of your to-do list. And since life insurance provides coverage at an affordable price during the years your family needs it most, you should strongly consider it.
Do term life rates increase over time?
It depends on what kind of policy you have. In the case of a level-term life policy, the premium stays the same throughout the contract. If you bought an annual renewable term life, your premium would increase yearly. That’s because life insurance costs increase as we grow older.
What happens if I live longer than my term life insurance?
You have four options in front of you:
Let the policy expire. If you no longer need life insurance, you can let your term life policy expire and go without coverage.
Convert your policy. When your policy is near the end of its term, you can convert it into permanent life insurance coverage. You will not have to submit proof of insurability. This option is available till a certain age, which may vary from insurer to insurer.
Renew your term life policy. You don’t need to take another medical exam. You can exercise this option till a certain age, which may vary from one carrier to the next.
Apply for a new policy. Healthy people may benefit from buying a new policy at lower rates instead of renewing the existing one.
Let the policy expire. If you no longer need life insurance, you can let your term life policy expire and go without coverage.
Convert your policy. When your policy is near the end of its term, you can convert it into permanent life insurance coverage. You will not have to submit proof of insurability. This option is available till a certain age, which may vary from insurer to insurer.
Renew your term life policy. You don’t need to take another medical exam. You can exercise this option till a certain age, which may vary from one carrier to the next.
Apply for a new policy. Healthy people may benefit from buying a new policy at lower rates instead of renewing the existing one.
Would I get my cash back if I cancel my term life insurance policy?
No, you won’t. That’s because it doesn’t build cash value. So when you end it, there’s no refund.
Is it possible to cancel a term life insurance policy at any time?
Yes, absolutely. You can cancel your term life policy by stopping premium payments. You won’t be charged any cancellation fee.
How long should my life insurance coverage last?
Life insurance needs aren’t one-size-fits-all. So there’s no one correct answer to this question. It all depends on your reason for purchasing term life in the first place. Are you buying coverage until retirement? In that case, the term should last as many years as your retirement. Do you want a term life policy to protect a mortgage? Then, the policy should be in force for the number of years you would need to pay off the loan. Term life insurance may be a good option if you want protection for a specific time. It is typically cheaper than whole-life insurance, so it may be a better choice if you are looking for affordability.
Further Reading
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