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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

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

What is 30-year term life insurance?

Key takeaways

  • This type of term life insurance provides you with coverage for 30 years at a locked-in rate. Your premium payments won’t go up for the length of your initial term.
  • Term life insurance can be a lower-cost option than permanent life insurance products.
  • A 30-year term life insurance policy is ideal if you’re looking for coverage for a longer period, to cover you through milestones like getting married, having children, or buying a house.

What is 30-year term life insurance?

30-year term coverage is life insurance with fixed premium payments for 30 years.

If you as the insured person pass away during this time, your beneficiaries receive a death benefit, which is a lump sum of money specified in the policy that’s paid tax-free to a named beneficiary. If you decide you don’t want the policy after the 30-year term, you can end the coverage, and no benefits are paid out.  However, you can usually renew or extend your policy, and in some cases, you may be able to switch to another policy. Since you’re already insured, you won’t have to requalify or undergo any medical testing unless you ask for more coverage or add benefits and options.

The main purpose of 30-year term life insurance is to provide financial protection for your loved ones in case you die. It helps to ensure that they’re taken care of financially, covering expenses such as mortgage payments, children’s education, and daily living costs, in your absence.

There are several benefits to having 30-year term life insurance coverage. Some of which include:

  • Financial security: Provides you with confidence knowing your family will have financial support. 
  • Affordable premium payments: Generally, term life insurance is more affordable compared to permanent life insurance, making it a cost-effective option for long-term coverage.
  • Fixed premium payments: Payments are fixed for the entire initial term, so you know what you’ll pay annually without any surprises.
  • Coverage for critical years: A 30-year term can cover significant periods in your life, such as paying off your mortgage, raising children, or securing your family’s financial future during your peak earning years.
  • Flexibility: You can choose a coverage amount that suits your family’s needs, ensuring they have financial support if you're no longer there.
  • Benefits and riders: You can add additional features to your 30-year term insurance policy to customize it according to your needs like Disability waiver of premium benefit, child term riders, or guaranteed insurability rider to name a few. 

Who is best suited for a 30-year term life insurance? 

Term 30 life insurance is highly recommended for people who are looking for long-term protection. This can include:

  • Young families: If you have young children, a 30-year term can provide coverage until they are grown up and financially independent. This could help to cover their education and living expenses if you die.
  • Homeowners with a mortgage: If you have a long-term mortgage, a 30-year policy can cover the duration of your loan. This helps ensure your family can keep the home and pay off the mortgage if you pass away unexpectedly.
  • People in their 20s to 40s: Purchasing a 30-year term policy when you’re younger and in good health can help lock in lower premium payments. It’s a good option if you want to secure affordable life insurance coverage during your peak earning years. Additionally, if you have debts such as credit cards or personal loans, you’ll have confidence knowing these can be paid off.
  • Planning for major life events: If you’re planning for major life events like sending your kids to college or university, getting married, or starting a business, a 30-year term policy can provide financial security through these significant periods.
  • Income providers: If you’re the primary earner in your household, a 30-year term policy can ensure that your family has funds to rely on if you’re no longer there to provide for them.
  • Seeking affordable long-term coverage: If you want a long-term life insurance policy without the higher costs of permanent life insurance, a 30-year term policy can offer substantial coverage at a lower cost. This type of policy could also provide coverage during some of your retirement years while you may be receiving a retirement pension.

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

How does 30-year term insurance work?

With a 30-year term policy, you’re covered for 30 years from the time the policy starts. You pay premium payments 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 30-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 on death. They can use this money to cover expenses like funeral costs, bills, mortgage payments, or anything else they need.  

After the 30-year period ends, the coverage will renew automatically. You won’t get any money back if you cancel the policy. Your premium payments won’t increase during the duration of the initial term length. Your premium payments will then be higher each year thereafter due to your increased age and risk.  Or if you decide to change your policy before the 30-year period ends, your premium payments may change due to your increased age and risk.

You may be able 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.

30-year term life insurance is also different than permanent life insurance in the following ways:

Duration of coverage

  • 30-year term life insurance: Provides coverage for a specific period, in this case, 30 years. If you pass away during this term, your beneficiaries receive a death benefit. When the term ends, the policy will automatically renew annually. If you continue to pay the increasing, annual, renewal premiums you will continue to have coverage and if you pass away your beneficiaries receive a death benefit.  If you choose not to pay the renewal premiums, or choose to end the policy, you will no longer have coverage and no death benefit will be paid out. or if you choose to end the policy, no benefits are paid out.
  • Permanent life insurance: Provides lifetime coverage, meaning it remains in effect if the required premium payments are made. Your beneficiaries will receive a death benefit upon your death if the policy remains in effect.

Cash value

  • 30-year term life insurance: Doesn’t accumulate cash value. It’s a straightforward policy that pays out only if you pass away while the policy is in effect.
  • Permanent life insurance: Includes a cash value component that may grow over time. If you cash out some or all your coverage, this will reduce the payout and cash value, and you may have to report taxable income. 

Cost

  • 30-year term life insurance: Generally, more affordable than permanent life insurance if you only want coverage for a certain length of time.  Premium payments are fixed for the 30-year term, making it a cost-effective option for long-term coverage.
  • Permanent life insurance: More expensive due to the lifetime coverage and cash value component. Premium payments may be higher, but the policy has additional features.

Flexibility

  • 30-year term life insurance: Offers less flexibility. Once the initial term ends, the coverage automatically renews annually unless you convert it to a permanent policy or choose to end the coverage.
  • Permanent life insurance: Offers more flexibility with its cash value. You may be able to adjust your premium payments, withdraw cash, or take loans against the policy’s cash value. If you cash out some or all your coverage, this will reduce the payout on death and cash value, and you may have to report taxable income.

Additional coverage

  • 30-year term life insurance: Typically provides basic coverage without any other product features. You can keep the cost as low as possible by adding only the additional benefits (riders) you need, such as disability waiver of premium benefit, guaranteed insurability rider, or child term rider.
  • Permanent life insurance: Additional benefits and riders are available for customization. You can add riders and adjust the policy to better meet your financial goals and needs over time. 

What should you keep in mind when considering 30-year term life insurance?

Like other term insurance policies, 30-year term insurance doesn’t have the cash value component that permanent life insurance does. This means it has no cash value. The benefit is the lower-cost insurance payout or death benefit your beneficiaries can receive after you die.

 However, you may be able to convert term insurance to permanent insurance if you decide it’s appropriate for your situation. In this case, premium payments may be higher, but it may also create value that may be accessed during your lifetime. If you cash out some or all your coverage, this will reduce the payout and cash value, and you may have to report taxable income.

Typically, you can also add additional benefits, also known as riders, to your 30-year term life insurance policy.  

 The amount of insurance coverage you need must be determined based on your individual circumstances and timelines. For example, if you’re thinking a short-medium length timeline, think about things like the affordability, your immediate financial situation, the length of coverage you’ll need, your current health status, and if you’ll need extra coverage. 

For a long-term timeline, think about things like income replacement, family changes like birth of children, divorce, and your long-term financial goals and is the policy convertible, how your health will be in the long term. You should also make sure you make changes if the individual you named as your beneficiary dies while the 30-year term policy is in effect. When thinking about estate planning remember your 30-year term policy may be convertible, and how your health will be in the long-term.

What are the costs associated with this term policy? 

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

  • Your age: It’s not uncommon for your premium payments to be lower if you’re younger. 
  • Your health: Your family history, personal history, and if you have any chronic conditions can impact your premium payments.
  • Your gender: Woman typically have longer life expectancies than men. For this reason, their premium payments may be lower. 
  • Your occupation: If you work in a dangerous occupation, your premium payments 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 a 30-year term life insurance policy worth it?

Deciding if a 30-year term life insurance policy is worth it depends on your current needs and financial situation. Here are some key points to consider:

  • Current needs: Do you have young children, a mortgage, or other long-term financial commitments? A 30-year term policy can provide valuable protection. 
  • Affordability and cost: Term life insurance is generally more affordable than permanent life insurance. A 30-year term policy allows you to lock in a low premium payment for a long period, making it cost-effective. Do you have a budget? Can you comfortably afford the premium payment for the entire term?
  • Length of coverage: Consider if 30 years is the right length for your needs. If you expect your financial obligations to last for 30 years or longer, this policy can be a good fit.
  • Future planning: Purchasing a 30-year term policy now can be beneficial if you are currently in good health. It locks in your premium payments for the initial term length and provides coverage despite potential future health issues. Check if the policy can be converted to permanent life insurance later. This gives you the flexibility to extend coverage if your needs change.
  • Medical exams: You’ll need to have proof of good health that can possibly be done over the phone as a prerequisite of purchasing a 30-year term life insurance policy. Are you currently in good health? If your policy renews automatically, will you need an updated medical exam? Can you extend your coverage? Is your policy convertible?
  • Alternatives: If you need lifelong coverage and want a policy that builds cash value, a permanent life insurance policy might be a better fit. It’s more expensive but offers additional features. If your financial obligations are shorter-term, a 10 or 20-year term policy might be sufficient and more affordable.

A 30-year term life insurance policy is a smart choice for you if you’re looking to ensure financial support for loved ones after you die. Always consult an advisor or qualified professional to determine which life insurance policy is best for your needs. You can also get a quick online quote to find out approximately how much a 30-year term policy will cost you.

What’s next?

  • Think about what’s best for your situation and if a 30-year term policy is right for you.
  • If you’re interested in long-term life insurance coverage, consider Canada Life’s My Term™ 30-year coverage, or contact your advisor.

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.