Guide to 10-Year Term Life Insurance
See affordable life insurance quotes from PolicyMe and other top companies.
Is a 10-year term life insurance policy right for me?
A 10-year term life insurance policy in Canada may be the right term length for you if:
- You have short-term financial obligations like a personal loan or car payment
- You need to bridge a gap in coverage that’s unexpected
- You own a business and want to cover your debts in case of your death
- You’re early in your career and anticipate your financial situation changing in the future
Your term should reflect your stage of life and your major financial obligations. In other words, your term life insurance policy should align with your current budget and how many years you anticipate having financial burdens.
Consider using a 10-year term as part of a term life insurance laddering strategy. This gives you strong coverage during the years you need it the most, and then you can let it expire as your financial needs decrease.
10-year term life insurance rates in Canada
The cost of a 10-year life insurance term depends on your personal risk factors, like age, gender, smoking status, and health status. Costs also vary by company and location.
Younger policyholders unlock lower rates. A 10-year term life insurance policy is cheapest for someone in their 20s or early 30s. You’ll lock in a low rate when you buy a policy at a young age because you face less risk.
* Average monthly rates for a non-smoking applicant with $500,000 of coverage.
A higher amount of coverage means higher premiums. A 10-year term policy could carry $50,000 to $500,000 or more in coverage. The higher the payout, the more you’ll pay each month.
Below, we’ll compare rates for 10-year terms at various coverage levels from four of Canada’s top-rated life insurance companies.
To find out how much term life insurance coverage you need, try an online life insurance calculator to estimate term lengths and coverage amounts that work for your situation.
10-year term life insurance rates: $750k in coverage
*Average monthly rates for a 30-year-old applicant with $750,000 of coverage.
10-year term life insurance rates: $500k in coverage
*Average monthly rates for a 30-year-old applicant with $500,000 of coverage.
10-year term life insurance rates: $250k in coverage
*Average monthly rates for a 30-year-old applicant with $250,000 of coverage.
10-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 10-year life insurance term?
If you see yourself in one of the categories below, a 10-year term life insurance plan might be a good fit for you.
- You have a young family with long-term needs
- You have a long amortization period on a mortgage
- You expect your health to decline within the next 10 years
- You want a set premium for a longer term (or permanent life insurance)
How to choose a term length: 10 vs. 20 vs. 30 years
When considering term life insurance in Canada, the most important part is matching the term length to your needs. Otherwise, you could end up under or overinsuring (and overpaying!).
Here’s how to decide:
- List your debts and their timelines. If you have loans, car payments, a mortgage, or kids, how long will you be paying for them? Your term policy should last until then.
- Consider future obligations. Do you plan to have kids and/or a mortgage in the future? A term policy can protect you, even if you don’t have those obligations right now. Just be realistic about how much coverage you’ll need and for how long.
- Balance your future with your present. Health issues, entrepreneurial dreams, and other life changes can crop up later in life. Right now, your current budget needs to accommodate whatever term you choose.
If you don’t have longer-term financial obligations like kids or a mortgage, a 10-year policy might be perfect for you—and the insurance cost will be lower. There’s even a 5-year term policy for people with temporary coverage needs.
But, if you’re worried about your children’s education or other major expenses, then your insurance needs might require a longer-term policy, like a 20-year, 30-year, or even a 40-year term.
How to choose a coverage amount
The coverage amount on your policy is the lump sum paid to your beneficiaries if you pass away before your term expires (so long as you’re up-to-date on your premiums!).
The right coverage amount for a life insurance policy is personal, and it should cover your income, debts, and financial goals.
Try the DIME method to determine how much life insurance you need:
Debt + (Income x years of replacement coverage) + Mortgage + Kids’ education
Riders and options (and when they’re worth it)
Riders—aka endorsements—are extra coverages that can be worth adding onto your term policy. Here are a few common life insurance riders in Canada:
- Child rider: Life insurance for your kids, which they can convert to permanent insurance later if desired. All of PolicyMe’s 10-year term life insurance policies include $10,000 of child coverage as a no-cost benefit.
- Return of premium (ROP) rider: Get your paid insurance premiums back if you live past your policy term.
- Accelerated death benefit rider: Access part of your death benefit early if you get diagnosed with a critical or terminal illness.
- Guaranteed insurability rider: Get the ability to purchase more coverage while your policy is still active, if your life changes.
Renewability and convertibility are often built into term life insurance policies in Canada. This means you have the option to renew coverage without a medical exam at the end of your term. You may also have the option to convert a term policy into a permanent policy, like term 100 life insurance.
Life insurance riders will raise your premiums. For most Canadians, a policy without riders is a more realistic and cost-effective option.
What happens when a 10-year term ends?
At the end of a 10-year term policy, your coverage will cease—and your insurance company may offer you several options:
- Renew your policy: Premiums will increase because you’re older, but short-term coverage can protect you if you’re close to being debt-free and have no dependents.
- Let your policy expire: If you don’t need coverage anymore, you can simply let the policy lapse. Your premiums will stop and so will your coverage, meaning no payout for your loved ones if you die.
- Convert to permanent coverage: You can opt to convert your term policy into a permanent life insurance policy for lifelong coverage, locking in a low rate for comprehensive protection.
It’s a good idea to speak with an insurance advisor to determine what to do when your policy term ends. Your life and your financial situation might be very different in 10 years, so don’t get ahead of yourself.
FAQ: 10 year term life insurance
Laura brings 7 years of experience working in insurance & strategic operations as a management consultant at Oliver Wyman, after experiences at Manulife and Munich Re. In 2017, she launched a successful initiative for the World Economic Forum focused on innovation in insurance, working closely with insurers, tech pioneers, and policy-makers.
Laura brings 7 years of experience working in insurance & strategic operations as a management consultant at Oliver Wyman, after experiences at Manulife and Munich Re. In 2017, she launched a successful initiative for the World Economic Forum focused on innovation in insurance, working closely with insurers, tech pioneers, and policy-makers.