Canadian Term Life Insurance Quotes

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renewable and convertible term life insurance

Not all term life insurance is the same! Some – but not all – term life insurance policies provide two additional policy features, for free and included in the premiums. These types of term life insurance policies are called renewable and convertible term life insurance.

Renewable term life insurance

Term life insurance policies have premiums that are level for a defined period of time known as the ‘term’. The term is commonly 10,20 or 30 years in Canada. But what happens at the end of the term? With a renewable term life insurance policy, your coverage actually stays in force and the death benefit remains level, but the premiums increase substantially. Technically you could keep the policy at that point and pay the increased premiums but the premium increase is so high that most consumers would only pay those premiums for a short period of time while they scramble for some other solution.

If a policy is not renewable, at the end of the term the policy simply expires abruptly, leaving you without coverage.

And that illustrates the importance of the renewal option in term life insurance. Many Canadians simply forget that they’ve reached the end of their term. With a non-renewable policy, you’re just out of life insurance and maybe didn’t even get notified. With a renewal policy the premiums coming out of your bank are a shock and a wakeup call to do something, but doing so while you still have life insurance coverage in force. 

In years past (pre mid-1990’s) the premiums at renewal went up, but not to such a drastic degree as they do with todays term policies. For those policies it made sense to keep the policy at renewal rather than shopping for a new policy. But with the current high premiums at renewal, again we would not expect anyone to keep their policy into renewal – it’s just there as a safety mechanism temporarily at the end of the term so you don’t get left without coverage.

Convertible term life insurance

Some term life insurance policies have a convertible option. This option allows you to exchange your term policy for a permanent lifetime policy, with no medical requirements.

The convertible option is the second most important policy provision after the death benefit because it guarantees your future ability to get a life insurance policy no matter what happens to your health.

The convertible option is used frequently in two situations. First if you become uninsurable you are likely going to prefer lifetime locked in life insurance – the permanent policy that the convertible option lets you do. Secondly, many people at the end of their term policy and towards retirement choose to have a smaller permanent lifetime policy for funeral expenses. The convertible option is an easy way for these Canadians to switch their term policy to permanent without any medical requirements – it’s used for convenience at the end of a term.

Non-Renewable and Non-Convertible term life insurance

Some term life insurance policies are not renewable and convertible. Be aware that those policies typically don’t advertise that the term policy is lacking these features, they just fail to mention it. You should never accept a term life insurance policy that is not renewable and convertible unless you have no other choice. The ability to convert your term to permanent life insurance without any medical requirements can quickly become the most important policy features if you become uninsurable.

The policies we quote

All term life insurance policies quoted on this website (you can run instant term life insurance quotes using the form at the top of the screen) are renewable and convertible term.