Why take out term life insurance?
What is the role of term life insurance?
For fixed-term insurance needs, term life insurance is highly recommended. This solution stands out for its flexibility and low cost: it can be subscribed for a period of 10, 20 or 30 years, depending on your needs. It also has the advantage that it can be converted into permanent protection, without having to undergo a full medical investigation again.
Term life insurance is for anyone who wants to protect themselves, their loved ones or even their business for a well-defined period of time. It is still more affordable than permanent life insurance, but it is important to know that premiums are subject to an increase with each renewal, unlike permanent coverage whose premiums are constant.
Both types of contracts ensure the payment of the death benefit to the beneficiaries named in the policy. If the policy matures before the insured’s death, no lump sum is paid out — beneficiaries can only receive a benefit if the policy is still in force.
Note that term life insurance has no cash value, unlike permanent life insurance, which includes a savings component. To learn more about the conditions of insurability in Québec, visit the website of the Autorité des marchés financiers (AMF).
Who is term life insurance for?
Term life insurance is suitable for anyone who wants protection over a well-defined period. It is particularly well suited to the following profiles:
- Young families : Protecting family income during the years when children are dependents.
- Homeowners : pay off the mortgage in the event of the premature death of the primary breadwinner.
- Entrepreneurs : To cover a business debt or an agreement between partners for a fixed period.
- People on a budget : get maximum coverage at the lowest possible cost.
Generally available until age 75 depending on the insurer, term life insurance can be renewed at maturity — although premiums increase with each renewal. To find the ideal coverage, a broker can compare several insurers for you. You can also explore life insurance without a medical exam if your health is a challenge.
T10, T20, T30 term life insurance — which term should you choose?
Term length is one of the most important decisions when purchasing term life insurance. Here’s how to choose according to your situation.
T10 (10 years) — for whom?
The 10-year term offers the lowest premiums in the short term. It is particularly suitable for people who:
- Have a need for temporary and well-defined protection (e.g., coverage for a car or personal loan).
- Anticipate an improvement in their financial situation in 10 years (debt repayment, children who have become independent).
- Want coverage at a very low cost and regularly reassess their needs.
Please note : with each renewal, the premiums increase considerably. A 55-year-old who renews a T10 will pay much more than a 35-year-old who purchased a T20 from the start.
T20 (20 years) — the most popular choice
The term 20 years is by far the most common in Quebec. It represents the best balance between the duration of protection and the cost of premiums. This term is ideal for:
- Young parents (25-40 years old) who want to protect their family until the children are independent.
- Homeowners with a 20- to 25-year mortgage.
- People who want to lock in fixed premiums for the next two decades.
Purchased at age 35, a T20 protects you until age 55 — for the entire period when your family is most dependent on your income. This is often the term recommended by experienced brokers.
T30 (30 years) — maximum coverage
The 30-year term offers the longest protection available in term insurance. It is suitable for people who:
- Want complete peace of mind until retirement.
- Have young children (under 5 years old) and want to be covered until they are completely financially independent.
- Have a 25-30 year mortgage and want to synchronize their coverage with their debt.
T30 premiums are higher than T10 or T20 premiums, but they remain fixed for the entire term — which can represent substantial savings over the long term compared to multiple T10 renewals.
How much does term life insurance cost in Quebec?
The cost of term life insurance varies depending on age, gender, health, amount of coverage and length of term. Here are indicative monthly estimates for a healthy non-smoker in Quebec (20-year term):
| Age | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|
| 25 years | ~$12/month | ~$20/month | ~$35/month |
| 35 years | ~$18/month | ~$30/month | ~$55/month |
| 45 years | ~$35/month | ~$65/month | ~$120/month |
| 55 years old | ~$80/month | ~$150/month | ~$280/month |
These amounts are average estimates. Actual premiums vary depending on the insurer, your medical record, and your lifestyle (smoking, extreme sports, etc.). A broker can get you comparative quotes from several insurers in a single process.
To find out the exact price according to your profile, get a free life insurance quote with Assur360.
Term vs. Permanent Life Insurance — Which One Is Right for You?
The choice between term and permanent insurance depends mainly on your goals and your planning horizon.
| Criterion | Term life insurance | Permanent life insurance |
|---|---|---|
| Duration | 10, 20 or 30 years | All life |
| Monthly cost | Low at the start | Higher, but fixed |
| Cash value | None | Yes (accumulation) |
| Conversion possible | Yes (permanent verse) | Not applicable |
| Best for | Debts, family, mortgage | Inheritance, bequests, tax planning |
For most Quebecers in the accumulation phase (30-50 years old), term insurance perfectly meets the needs: to cover family income, protect the mortgage and pay off debts. Permanent life insurance, on the other hand, is more for people who want to incorporate insurance into their estate planning or take advantage of the cash value over the long term.
In many cases, the optimal strategy combines the two: a temporary one to cover current needs at a lower cost, and a small permanent one for the future bequest.
Term life insurance for your mortgage
If you have a mortgage, your bank has probably offered you its own mortgage default insurance product. Before accepting, it is important to understand the major differences between bank protection and an individual policy taken out through a broker.
The main difference: with bank insurance, the beneficiary is the bank — not your family. In the event of death, the bank is reimbursed directly and your loved ones have no control over the funds. With individual term life insurance, your family receives the benefit and decides for themselves how to use it : pay off the mortgage, maintain the standard of living, pay for the children’s education.
In addition, the bank coverage is decreasing (the insured balance decreases with your mortgage) while the premium remains fixed. With an individual policy, you pay for fixed coverage — and the price per insured dollar decreases over time.
To go further on this subject, read our full article: Mortgage life insurance: why refuse the bank’s insurance.
How to get the best term life insurance in Quebec?
Here are the 5 steps to take out the best coverage at the best price:
- Assess your real needs : Calculate the amount needed to replace your income, pay off your debts (mortgage, loans) and provide for your children’s education. A general rule of thumb: aim for 10 to 12 times your gross annual income.
- Choose the length of the term : T10 for a short-term need, T20 for standard family protection, T30 for full coverage until retirement.
- Compare several insurers : premiums can vary by 30 to 50% from one insurer to another for an identical profile. An independent broker has access to all companies in the Quebec market.
- Check conversion clauses : Make sure your policy offers the option to convert to permanent without a new medical investigation — a valuable benefit if your health deteriorates.
- Designate your beneficiaries carefully : name irrevocable or revocable beneficiaries based on your family situation, and update your designation after each major life change (marriage, divorce, birth).
At Assur360, our certified life and health insurance broker partners compare the best offers on the market for you. Request a free quote — free connection in a few hours.
Related Resources: Life Insurance Guide in Quebec | Permanent Life Insurance | Life insurance without a medical exam
Frequently asked questions — Term life insurance
What is term life insurance?
Term life insurance is an insurance policy that protects you for a set period of time (10, 20 or 30 years). If you die during this period, your beneficiaries receive the death benefit. If you survive the term, the policy expires with no cash surrender value. This is the most affordable form of life insurance.
What is the difference between T10, T20 and T30?
T10, T20 and T30 denote the length of the term in years. A T10 covers you for 10 years at lower premiums, but you’ll need to renew at a higher cost at maturity. The T20 is the most popular — it offers a good balance of time and cost. The T30 offers the longest protection with fixed premiums over 30 years.
How much does term life insurance cost in Quebec?
A $500,000 T20 term life insurance costs about $20/month for a 25-year-old non-smoker, $30/month at age 35, $65/month at age 45, and $150/month at age 55. The price varies according to age, health, gender and insurer. A broker can compare several offers to find you the best price.
Can you convert term life insurance to permanent?
Yes, most term policies include a conversion clause that allows you to switch to permanent insurance without a new medical investigation, before a certain age (usually 65 years old). This is an important benefit if your health deteriorates and you would not otherwise be insurable.
Is individual term life insurance better than my bank’s?
In the vast majority of cases, yes. Individual life insurance purchased through a broker is often cheaper, with fixed (non-decreasing) coverage and a beneficiary of your choice — not the bank. Bank mortgage default insurance has coverage that decreases with your balance, but you pay the same premium until the end.
Do I need a medical exam to get term life insurance?
It depends on the amount requested and your age. Below certain thresholds (often $500,000 before age 40), a simple health questionnaire is sufficient. For higher amounts or more complex medical profiles, an examination may be required. There are also life insurance products without a medical exam, with different conditions.
What happens at the end of my term of term life insurance?
At the end of the term, you have three options: renew the policy (at higher premiums depending on your age), convert it to permanent insurance (without a medical exam if your policy allows it), or let the policy expire if you no longer need coverage. No value is refunded at expiry.
How do I choose the right amount of coverage?
A simple rule: aim for 10 to 12 times your gross annual income. Then add your mortgage balance, other debts, and a provision for your children’s education. A broker can do a complete and free needs analysis to help you determine the exact amount for your situation.