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Business-owned term life insurance

Protection when your business needs it

It’s affordable coverage that can help keep your business running smoothly for when it needs it most.

  • Tax-free payout

    A payout can help pay off big expenses or help fund your business' transition plan.

  • Pay less for more

    You can get coverage for the period that works for you at a lower cost than permanent insurance.

  • Protection for set periods

    Choose the term length that fits your needs – anywhere from 5 to 50 years.

What is business-owned term life insurance?

It’s temporary coverage that provides a one-time tax-free payout if the person who’s insured – you, your business partner or a key employee – dies within the term you choose. Footnote * It can help your business continue to operate by covering its debt, expenses or a partner buyout.

Business-owned term life insurance is different from personal term life insurance, which helps protect your loved ones. With both, the payments you make, called premiums, are set for the term you choose and won’t change during that period.

How does it work?

  • Choose the coverage amount and length you want
  • Customize your coverage with additional benefits.
  • Pay your choice of monthly or annual premiums. 
  • When the term is up, your policy will automatically renew each year, or you can end it or convert to longer term or permanent life insurance, within limits.
  • If you die while your policy is active, your company or the people or charity you named as beneficiary receive a tax-free payout.

How can you use term life insurance for your business?

Here are some ways that life insurance can help your business:

  • Protecting your business from an unexpected death

    Insurance payout can help your business continue to operate if you or a key person dies.

  • Funding a buy/sell agreement

    Insurance payout can help buy your partners’ shares or vice versa if someone dies.

  • Protecting your key people

    Use funds to pay debts and expenses to help keep the business going while you find and train a suitable replacement.

  • Loan coverage

    Help make sure outstanding business loans and debts are covered.

  • Succession planning

    Your life insurance payout can help fund your transition plan, whether you want to sell your business or pass it along to family.

How much does it cost?

In general, term life insurance is the most affordable type of life insurance available. There are a few factors that can affect the price of your policy, including:

  • Age

    Generally, insurance is less expensive when you’re younger.

  • Health

    Family history, chronic diseases and lifestyle can increase costs.

  • Gender

    Women live longer than men on average, so their insurance may cost less.

  • Occupation

    If you have a dangerous job, the cost to insure you can be higher.

What types of business-owned life insurance are there?

There are 2 main types of life insurance for business ownersterm life insurance and permanent life insurance.

Term life insurance
Permanent life insurance

What does it provide?

Protection for a set length of time

Permanent protection

Needs it can meet

  • Loan coverage
  • Protect business from an unexpected death
  • Protecting key people
  • Funding a buyout agreement
  • Additional cash flow
  • Funding a buyout agreement
  • Business has funds not needed for operations
  • Succession planning
How long does it last?

Specific period of time

Lifetime protection


Usually more affordable than permanent

Usually more expensive than term


  • You name a beneficiary who receives a tax-free one-time payment when you die Footnote *
  • If your plans change, your coverage can change with them
  • You name a beneficiary who receives a tax-free one-time payment when you die Footnote *
  • Build wealth inside your policy, within limits, that you can access while you're alive

Savings component



Contact an advisor

View permanent life insurance

What are your options when your term ends?


With most traditional term insurance products, your policy would automatically renew for the same length of time as the original term. With Canada Life My Term™, your policy renews on a yearly basis at a lower initial rate than traditional term products. This allows you to keep your coverage longer if you need it.

Convert to a longer term

You may be able to convert to a term that is 10 or more years longer than your original term. Your premiums will increase gradually each year.

Convert to permanent insurance

Choose this option if you want insurance that lasts a lifetime and may grow in value over time, with tax advantages. Your premiums will be based on the coverage you choose.

Get help with your Canada Life products and services.

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Footnote *
* This refers to named beneficiaries (people). Probate fees (estate administration tax), if any, may apply on money paid to an estate. All comments related to taxation are general in nature and are based on current Canadian tax legislation and interpretations for Canadian residents, which are subject to change.