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YourTerm Life Insurance – RBC Royal Bank of Canada

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Understanding YourTerm Insurance from RBC

YourTerm Life Insurance is a type of term life insurance available to purchased in Canada from a life insurance company called RBC Insurance. It is a unique term life insurance product because you can choose the exact length of the term.You can purchase a term life insurance policy with a term length anywhere from 10 years all the way to 40 years. Most companies only offer terms in certain lengths of years such as 10 year term, 20 year term or 30 year term.

The most common types of term life insurance in Canada are 10, 15, 20, 25, 30, 35 and 40 year term life insurance. What if you have a unique need for life insurance and need insurance for a specific amount of years? With YourTerm life insurance offered by RBC Insurance you are able to choose any year that you would like.

For example, if you require term life insurance for 23 years, you are able to purchase a 23 year term life insurance policy. If you require term life insurance for 12 years, you are able to purchase a 12 year term life insurance policy.

Who Is YourTerm Life Insurance Designed For?

YourTerm life insurance from RBC Insurance is designed for Canadians who are looking for term life insurance for a specific amount of years. The policy is priced accordingly depending on the length of the term. You can select any year from 10 years to 40 years. The longer the length of the term, the higher the policy will cost.

It is most commonly purchase by individuals who need term life insurance for a specific amount of years to cover things such as outstanding mortgage debt or until their children and/or spouse are self-sufficient financially. It can also be used to provide life insurance coverage until the insured is retired.

Benefits of YourTerm Life Insurance

  • YourTerm life insurance offers term life insurance protection for a specific period of time chosen by the owner of the policy.
  • It provides the peace of mind knowing that your beneficiaries will receive a lump sum amount, tax free in the event of your death.
  • The rates (cost of the policy) are guaranteed to be level (or fixed) for the length of the policy term which can be anywhere from 10 to 40 years.
  • YourTerm life insurance policies are very customizable which allows you to ensure that it suits the needs of you and your family.
  • The product offers a renewable option within the policy.
  • The product offers a conversion option within the policy.

Drawbacks of YourTerm Life Insurance

  • YourTerm life insurance may potentially have higher renewal premiums at the end of the initial term when compared to other products such as a comparable product offered by Industrial Alliance called Pick A Term.

How Much Does YourTerm Life Insurance Cost?

At the end of the day, the cost of YourTerm life insurance policy is dependent on the health of the person applying. If you are in very good health you can qualify for discounted rates (preferred rates), but most Canadians end up qualifying for standard rates. There are also other factors which come into play when determining the price of term life insurance such as weight, smoking, lifestyle habits, medications, etc. We have put together some sample quotes from RBC Insurance below to give you an idea of the cost of YourTerm life insurance. All prices are monthly and based on health, non smokers and $500,000 of coverage.

$500,000Male – Age 30Female – Age 30Male – Age 40Female – Age 40Male – Age 50Female – Age 50
13 Year Term$25.38$19.71$34.61$25.25$86.09$58.59
17 Year Term$29.57$22.05$42.08$31.28$110.79$73.58
23 Year Term$38.84$28.04$59.09$43.34$156.24$109.26

*Rates are monthly and based on standard health, non smoker from RBC Insurance
**Rates were quoted September 2020 and are not guaranteed. Final rates are determined after an application has been submitted.

Alternatives to YourTerm Life Insurance

YourTerm Life Insurance from RBC Insurance allows the policyholder to select the exact amount of years of the policy term length. There is currently one other company that has a product that is very similar. It is offered by Industrial Alliance and is called Pick A Term.

If you feel that you require life insurance for your entire life to cover things such as funeral expenses or estate costs than you should consider permanent life insurance options such as whole life insurance, universal life insurance or term to 100 life insurance.

Top Companies for YourTerm Life Insurance

YourTerm life insurance is a term life insurance product offered by RBC Insurance. Industrial Alliance has a very similar product called Pick A Term which is very similar as it also allows you to choose the exact length of years for term life insurance.

Examples of YourTerm Life Insurance

A 22 Year Pick A Term life insurance policy for $500,000 will have the same premium (cost of the policy) for the length of the term. In this case the length of the term is 22 years. The policy will also have the same coverage amount of $500,000 for the length of the term (22 years).

At the end of the 22 years the life insurance company will continue to offer you insurance at an increased price. This is called a renewal premium. The renewal premium is actually listed in your original policy contract so you can see what your renewal premiums are going to cost you if you refer back to your original policy contract.

Renewable Option

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

At the end of the initial term period (which depends on the policy), the insurance policy typically renews automatically at higher premiums (higher cost). This process can continue until the expiration date of the policy which is typically between ages 75 and 85 (depends on the company). The cost is quite high so be sure to keep an eye on your policy renewal dates.

The reason the premiums are higher after the first initial term period 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 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. We recommend contacting us to determine what policy is right for you.

Convertible Option

Most term 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 insurance (LINK), universal life insurance, term to 100 life insurance) without having to complete a medical exam or health questionnaire. You are just required to do something called a policy change where you complete some paperwork, select a permanent life insurance policy and pay premiums based on your age and smoking status at the time of converting.

This is a feature that can become very valuable depending on the circumstances of the insured person. If you purchased a 40 year term life insurance policy and were diagnosed with a health condition that made it so you were unable to ever purchase life insurance again because no insurance company would insure you, having a policy that had a conversion option would be beneficial because it would still allow you to buy a permanent life insurance policy.

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 regular, standard 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 related to your situation.

Summary

The YourTerm life insurance product offered by RBC Insurance is a very flexible term life insurance product which can be suitable for unique situations where the consumer needs term life insurance for a specific amount of years. Please reach out to one of our life insurance professionals if you have any questions.

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