15 Year Term Life Insurance

15 Year Term Life Insurance

15 Year Term Life Insurance is one of the more affordable life insurance products in Canada. The shortest term length available is 10 years which provides the lowest premium. The longer the length of the term, the higher the premium (cost) of the policy will be.

It is a life insurance product that has premiums (the cost of the policy) that are level for 15 years. The death benefit (the coverage amount) is also level for 15 years. At the end of the 15 years the insurance policy typically renews automatically at higher premiums (higher cost), again level for another 15 years. This process can continue until the expiration date of the policy.

Please see attached graph which helps show the increase in premium cost while you have the policy. At the end of the first initial 15 years if you decide to keep the same policy you will have a large increase in cost.

Benefits

  • insurance   One of the most affordable types of life insurance policy available in Canada.
  • insurance   Provides peace of mind knowing that your beneficiaries will receive a lump sum amount, tax free in the event of your death.
  • insurance   The rates (cost of the policy) are guaranteed to be level for the length of the policy term which in this case is 15 years.
  • insurance   Policies are very customizable which allows you to ensure that is suits the needs of you and your family.
  • insurance   Most life insurance companies offer a renewal option within the policy (see below for more information).
  • insurance   Most life insurance companies offer a conversion option within the policy (see below for more information).

Example

A 15 year term life insurance policy for $500,000 will have the same premium for the length of the term (15 years). It will also have the same coverage amount for the length of the term ($500,000).

If you use our free online instant quote generator on our website you will be able to compare the pricing from all top life insurance companies in Canada (instantly, for free). There is a link for the quoter at the top of this page.

Who Buys 15 Year Term Life Insurance?

15 Year Term Life Insurance is most commonly used by family members in their 20’s, 30’s and 40’s looking for insurance protection for approximately 15 years to cover such things as the last years of a mortgage, other short term debt (student loans, credit card debt, line of credit, etc.) or until their children and/or spouse are self-sufficient financially. It provides one of the lowest costs for types of life insurance in Canada.

It is also used by business owners who are looking to cover outstanding debt of their business or protect themselves in the event that key employee(s) pass away.

Recommendation

When purchasing life insurance it is very wise to seek out independent, unbiased advice from a life insurance broker who represents all of the life insurance companies in Canada. Feel free to reach out to us by email or phone at 1-877-344-4011 to speak with one of our licensed brokers and determine what product is best for you and your family.

Renewable Option

Most life insurance companies in Canada have a feature available called “renewable” or “renewability” where they allow you to continue your 15 year term policy after the initial 15 years.

At the end of the initial 15 years, the insurance policy typically renews automatically at higher premiums (higher cost), again level for another 15 years. This process can continue until the date of the policy which is typically around age 75 for most life insurance companies in Canada.

The reason the premiums are higher after the first 15 years is because the insurance company does not require any health questions or medical evidence (blood, urine, etc.). They are assuming that something has changed in your health which is why the policy premiums increase. If you are in good health and still need life insurance at the end of the 15 year term, you are usually better off applying for a new policy to get a lower premium and cancel your old policy after the new policy is in force.

The longer the length of the term, the higher the premiums will be. For example, a 20 year term life insurance policy costs more than a 15 year term life insurance policy. We recommend contacting us to determine what policy is right for you.

Convertible Option

Most life insurance companies in Canada also have a feature called “convertible” or “conversion” which means that the policy owner is allowed to convert (switch) their term life insurance policy to a permanent life insurance policy (whole life, universal life, term to 100) without having to complete a medical exam or health questionnaire. You are just required to do a policy change where you complete some paperwork, select a permanent life insurance policy and pay premiums based on your age and smoking status.

This is a feature that can become very valuable. If you purchased a 10 year term policy and were diagnosed with a health condition that made it so you were unable to ever purchase life insurance again, having a policy that had a conversion option would become very valuable.

The conversion option would allow you the ability to switch your term life insurance policy to a permanent life insurance regardless of your health- the life insurance has to offer you permanent life insurance at healthy rates. This would ensure that you have the ability to have lifelong insurance protection regardless of your health.

We recommend that you speak with one of our licensed brokers regarding these options because they can be quite hard to understand without a clear explanation.

 

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