What is term life insurance?
Term life insurance is temporary coverage. With Canada Life My Simple Term™ insurance, , you can choose the length of the initial term: 10, 15, 20 or 25 years, depending on your needs. If the insured person dies, we will pay out a lump-sum, tax-free benefit to the named beneficiary, as long as the policy is in effect.
Term life insurance offers essential protection, usually at a lower cost than permanent coverage – an ideal choice for budget-conscious planning.
When should you consider getting term life insurance?
Term life insurance premium payments stay the same for the initial term length. After that, premium payments increase yearly according to the schedule shown in your policy.
For example, if you bought a 25-year term life insurance policy in the year 2020 and your monthly payment was $20, it will still be $20 in the year 2030, and premium payments will only start to increase after the initial term ends in 2045.
Because the cost of coverage is calculated based on your age and health status, it can often be more cost-effective to get term life insurance when you’re younger and less likely to have developed any health conditions that might cause your coverage to cost more. Since your premium payments don’t change during the initial term length that you chose, this means you can keep this lower-cost coverage even as you age and your health might change.
Here’s an example:
Ivana is a 45 year old non-smoker who’s looking for term life insurance. She’s a mom of 3 and wants to help cushion the financial blow for her family if something happens to her while they’re still young.
If she got a My Simple Term 20-year policy for $300,000 now, she would pay about $48 a month. Even if Ivana’s health changes later on, her premium payments won’t change for the length of the initial term period.
Should you only get term life insurance when you have kids?
Big life milestones, like getting married or having children, can often be a trigger for people getting term life insurance. You might feel the need to make sure that the people who depend on you now aren’t left struggling financially if something happens to you.
That said, there are other reasons why you might want to think about term life insurance.
Here are 3 examples:
Angela is 30 and a smoker. She and her partner don’t have kids, but they recently bought a house together. To make sure her partner can still pay the mortgage if something happens to her, Angela gets a Canada Life My Simple Term™ 25-year policy for $450,000. This costs her about $60 a month.
Tyrone is 40 and a non-smoker. He has a 25-year term policy for $500,000 that he got 10 years ago. While he needed coverage at the time to cover his mortgage, his life has changed. He’s married now with 2 kids and has moved to a bigger home. His life is busy, so he wants something quick and easy. Tyrone chooses a My Simple Term 15-year policy for $500,000. This costs him about $48 a month.
Fatima is 55 and a non-smoker. She has little debt and hasn’t applied for life insurance before. She wants protection that will last until her planned retirement at age 65. She was concerned about the cost but was surprised to learn that she can qualify for a My Simple Term 10-year policy for $150,000, for about $45 a month.
What age is too old for term life insurance?
Once in effect, most term life insurance policies no longer cover you if you’re over 85. Most insurers won’t issue you a new policy if you’re over 80.
If you’re looking for insurance that can last a lifetime, you might consider permanent life insurance instead.