Skip to main content

The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

Your web browser is out-of-date. For the best experience, please update to a modern browser like Chrome, Edge, Safari or Mozilla Firefox.

Freedom 55 Financial is a division of The Canada Life Assurance Company and the information you requested can be found here.

What is 20-year term life insurance?

Key takeaways

  • This type of term life insurance provides you with coverage for 20 years at a locked-in rate. Your premiums won’t go up for the length of your term.
  • Term life insurance can be a lower cost option than other life insurance products.
  • A 20-year term is ideal for newlyweds, if you have debts, a mortgage, young children at home that you’ll be putting through school, or if you’re starting a family.

What is 20-year term life insurance?

20-year term coverage is life insurance with fixed premiums for 20 years. 

If you pay the premiums, it provides temporary protection that can pay a lump sum to your loved ones if you die within the 20-year insurance period. After 20 years, you can usually renew or extend your policy, and in some cases, you may be able to switch to another policy. 

Who is best suited for 20-year term life insurance? 

Term 20 life insurance is highly recommended for people who are looking for medium-term protection. 

This may be due to the following reasons:

  • If you’re a young parent or have a family depending on your income, a 20-year term policy can be a good fit. It covers you during the years when your children are growing up and your family might rely on your income the most. If something happens to you during this time, the policy can help replace your income and support your family financially.
  • If you have a mortgage or other significant debts that you don’t want to pass on to your family, a 20-year term life insurance policy can be a smart choice. If you pass away before paying off those debts, it can help lessen the burden for your loved ones.
  • If you’re the primary breadwinner in your family, a 20-year term policy can provide adequate coverage. If something happens to you, your family can still maintain their lifestyle and cover expenses like bills, education costs, and everyday living expenses.
  • Term life insurance is often more affordable compared to other types of life insurance, like par life insurance or universal life insurance. A 20-year term policy strikes a balance between providing adequate coverage and being budget-friendly, making it a good option for those looking for reliable protection without breaking the bank.
  • If you have specific financial obligations or responsibilities that will only last for around 20 years, such as putting your kids through college or paying off a loan, a 20-year term policy can align perfectly with those needs. Once the term is up, you can reevaluate your insurance needs based on your current situation.

Get a quote for flexible and affordable Canada Life My Term™ life insurance plans that help protect the ones you love.

How does 20-year term insurance work? 

With a 20-year term policy, you’re covered for 20 years from the time the policy starts. You pay premiums regularly, usually monthly or annually, to keep the policy active. The amount you pay depends on several factors like your age, health, and coverage amount you choose. 

If you pass away during the 20-year period while the policy is active and your claim is payable, your beneficiaries will receive a lump-sum payment, known as the death benefit or insurance payout. They can use this money to cover expenses like funeral costs, bills, mortgage payments, or anything else they need. 

After the 20-year period ends, the coverage will renew. You won’t get any money back if you outlive the policy, and you’ll need to buy a new policy or renew your current policy if you still want life insurance coverage. Your premiums won’t increase during the duration of your current policy, but if you renew or purchase a new policy, your premiums may be higher due to your increased age and risk of health issues. 

Some policies allow you to convert your term policy into a permanent life insurance policy before the term ends. This can be useful if you want lifelong coverage without going through medical underwriting again. 

What should you keep in mind when considering 20-year term life insurance?  

Like other term insurance policies, 20-year term insurance doesn’t have the "savings" element that whole life insurance does. This means it has no cash value. The only benefit to you is the insurance payout your loved ones can receive after your death. 

However, you may be able to convert term insurance to whole life insurance if you decide it’s appropriate for your situation. In this case, premiums may be higher, but it also creates value that can be paid back over your lifetime. Typically, you can also add additional benefits, also known as riders, such as critical illness insurance to your 20-year term life insurance policy. 

The amount of insurance coverage you desire must be determined based on your individual circumstances. For example: Will your family replace your income? How long will the cash be redeemable? Do you have other savings or assets

How much does term life insurance cost? 

Everyone’s circumstances are different, and the amount of life insurance will vary. Commonly, insurance premiums are calculated based on factors like:

  • Your age: It’s not uncommon for your premiums to be lower if you’re younger.
  • Your health: Your family history, lifestyle, and if you have any chronic conditions can impact your premiums.
  • Your gender: Woman typically have longer life expectancies than men. For this reason, their premiums may be lower.
  • Your occupation: If you work a dangerous occupation, your premiums could be higher because of that.

Get a quote for flexible and affordable Canada Life My Term™ life insurance plans that help protect the ones you love.

Is 20-year term life insurance worth it? 

This depends on your individual situation. If you need medium-term protection at a lower cost than other types of life insurance, a 20-year term policy could be a good option. Always consult an advisor or qualified professional to determine which life insurance is best for your needs. You can also get a quick online quote to find out approximately how much a 20-year term policy will cost you.

What’s next?

  • Think about what’s best for your situation and if a 20-year term policy is right for you.
  • If you’re interested in medium- term life insurance coverage, consider Canada Life’s My Term™ 20-year coverage.

The information provided is accurate to the best of our knowledge as of the date of publication, but rules and interpretations may change. This information is general in nature, and is intended for informational purposes only. For specific situations you should consult the appropriate legal, accounting or tax advisor.