Guide to 30-Year Term Life Insurance

Is a 30-year life insurance term right for me? 

A 30-year term life insurance policy might be the right term length for you if you:

• Have 30 years remaining on your mortgage
• Are worried about your future health risks
• Want to cover your kids until they become financially independent
• Have long-term debt or business partners
• Expect to retire in 30 years

A 30-year policy in Canada could cover you for many of your future financial obligations. To decide if 30 years is right for you, carefully estimate how long you’ll have mortgage payments, dependents, and other serious financial burdens.

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Our take

A 30-year term is a comprehensive life insurance option that covers most people’s biggest financial vulnerabilities in mid-life: kids, mortgages, and other personal debts.

30-year term life insurance rates in Canada

The cost of a 30-year life insurance term will depend on factors like your age, health, gender, and which provider you choose. Expect premiums to be higher for a 30-year term than a 10 or 20-year term.

Age has a big impact on your rates. Buying a policy in your 20s or 30s can help you lock in low rates to enjoy affordable life insurance in Canada for longer.

* Average monthly rates for a non-smoking applicant with $500,000 of coverage. 

Coverage amount affects your rates. The more coverage you want, the more you’ll pay each month. The average life insurance amount for a Canadian household is just below $500,000, but you might need more or less to achieve financial security. 

Take a look at these average rates from some popular life insurance companies in Canada.

Unsure how much term coverage would be too much? Use a simple life insurance calculator to compare your insurance needs with coverage amounts and estimate the term length that works for you.

30-year term life insurance rates: $750k in coverage

* Average monthly rates for a 30-year-old applicant with $750,000 of coverage.

30-year term life insurance rates: $500k in coverage

* Average monthly rates for a 30-year-old applicant with $500,000 of coverage.

30-year term life insurance rates: $250k in coverage

* Average monthly rates for a 30-year-old applicant with $250,000 of coverage.

30-year term life insurance rates: $100k in coverage

* Average monthly rates for a 30-year-old applicant with $100,000 of coverage.

Who should choose a 30-year life insurance term?

You should consider a 30-year life insurance term if you fit any of these categories:

A 30-year term might not be the right choice if…

• You only have short-term debts and obligations
• You’re over 45 and only need coverage until retirement
• You already have significant assets and savings to support your family
• You prefer permanent coverage or whole life insurance

How to choose a term length: 30 vs. 10 or 20 years

When buying term life insurance in Canada, it’s simple: pick a term length that aligns with how long you have financial obligations. Shorter terms like 5-year or 10-year terms tend to come with lower premiums. But if you have a spouse or dependents who rely on your income, you’ll want a term that will cover your loves until they can become financially independent—like 30 or 40 years.

Here’s a step-by-step guide to finding the right term length:

1. If you have kids, think about their future. Do the math to figure out when your youngest will graduate college. To protect your children’s education, your policy should last until that date.
2. Consider your mortgage timeline. How many years are left? What’s the amortization? Choose a term that best matches your remaining payments.
3. Decide what your current and future budget can handle. You lock in a premium when you choose your term. Lengthy terms mean higher premiums, but prices will also go up if you choose a shorter term and then have to buy a new policy once the initial one ends. Consider affordability now and financial planning for your future.

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If you have substantial savings and investments and you’re within 20 to 25 years of retirement, then you may not need a 30-year term (unless you have a dependent spouse or major financial responsibilities like business debts). 

In addition to a term life insurance plan, there’s permanent life insurance and term 100 life insurance. But most Canadian families don’t require a permanent life insurance policy. Premium payments are high and it can inhibit additional savings and investments.

How to choose a coverage amount

Choose a coverage amount that will settle your debts and replace your income so that your dependents are protected. This figure is totally unique to you, as it depends on your specific finances and your family’s financial future. 

The DIME formula can help you estimate your coverage needs:

DIME formula = Debt + (Income x years of coverage) + Mortgage + Education for kids

In simple terms, you need to add up all your debts, future costs, and income replacement your family would need if you passed away unexpectedly. This is a good estimate for your family’s living expenses—and your insurance needs.

Riders and options (and when they’re worth it)

Riders are optional add-ons that can expand the policyholder’s term life insurance coverage. Here are some common riders on a 30-year term policy in Canada:

• Accidental death benefit: Pays a lump sum to your beneficiaries (in addition to the death benefit) if you die in an accident
• Disability income: Pays a monthly income if you become disabled and can’t work
• Waiver of premium: Waives your premium if you become disabled and can’t work, but you retain coverage
• Critical illness: Pays a lump sum if you are diagnosed with a covered illness like cancer or stroke (though you can also buy critical illness insurance separately)
• Guaranteed insurability: Allows you to buy more coverage while the policy is still active without a medical exam
• Child term: Covers current and future children at a low cost (note that PolicyMe includes $10,000 of child coverage as a no-cost benefit)

Our take

Riders increase your premiums, but some (like guaranteed insurability) may be worth the cost—especially on a 30-year term policy. Most Canadians will be best served by a straightforward policy with no riders to cut costs and get the coverage they need.

What happens when the 30-year term ends?

At the end of your set period, the policy will expire and your coverage will end. Then, you have a few options:

• Let it expire: Your fixed premiums will stop and so will your coverage. Your family will no longer be protected, but that might be alright if your debts are paid and your savings are sufficient.
• Renew: Continue your coverage in 5- or 10- year increments if you’re still paying off debts. Expect your premiums to increase based on your age.
• Convert: Switch to a permanent plan like whole life or universal life insurance. If you want lifelong coverage because your health has declined, this might be a good option.

If your 30-year term policy doesn’t have a conversion option and you want to continue your coverage, you’ll have to buy a new term policy. This means a new medical exam. 

FAQ: 30-year term life insurance