Ben Nguyen 
15-year term life insurance is one of the most popular policy lengths in Canada. It offers affordable coverage to protect your family and pay off debts for a specific need period.
This article will explore everything you need to know about 15-year term life insurance. We’ll cover what it is, the pros and cons, costs, who needs it, and where to buy it. Read on for a comprehensive guide to help you decide if 15-year term life insurance is the right choice for your needs.
What is 15-Year Term Life Insurance?
With 15-year term life insurance, you pay the same premium each year for 15 years. This premium is guaranteed not to increase during the initial 15-year term.
The insurance company pays out the death benefit (face amount) to your listed beneficiaries if you pass away at any point during the 15-year term. After the initial term expires, you have the option to renew the policy annually. However, premiums increase significantly at renewal as you age.
Term life insurance is one of the two main types of life insurance policies. It is purely for protection purposes. It does not build cash value like permanent forms of life insurance. The key advantage is that term life is far more affordable, especially when you’re young and healthy. This makes it easy to purchase higher death benefit amounts.
15-year term life insurance provides stable coverage with guaranteed rates for 15 years. It’s an affordable way to protect your family’s financial security while paying off large debts like a mortgage.
Types of 15-Year Term Life Insurance
There are a few varieties of 15-year term life insurance to choose from:
Renewable 15-Year Term Life Insurance
Most 15-year term life policies are renewable until a certain age, usually around 75-80 years old. You have the option to continue coverage after the initial 15-year term but at much higher renewal premiums.
Renewable term life insurance gives you flexibility in case you still need coverage after 15 years. However, it’s often cheaper to get a new term life insurance policy at the end of your term rather than renewing an existing policy.
Convertible 15-Year Term Life Insurance
Convertible 15-year term life insurance provides policyholders with the ability to transform their term policy into permanent life insurance, such as whole life or universal life, without the need for medical underwriting. This feature is especially advantageous in the event of changes in health status. It offers the flexibility to convert to permanent life insurance without undergoing new underwriting procedures, even if health conditions arise later on.
No Medical Exam 15-Year Term Life Insurance
Many insurance companies now offer 15-year term life insurance with no medical exam required. You may just need to answer some health and lifestyle questions on the application.
No exam policies offer a faster and simpler application process. However, premiums are usually a bit higher than policies that require a medical exam.
Alternatives to 15-Year Term Life Insurance
While 15-year term life insurance suits many needs, there are some alternatives to consider as well:
- Other longer or shorter term length options: Go shorter or longer depending on your specific coverage need period. Read our helpful guides about Term 10 life insurance, Term 20 life insurance, Term 25 life insurance, Term 30 life insurance, Term 40 life insurance, Term to Age 65 life insurance , Term 100 Life Insurance, 35-Year Term Life Insurance, etc., to understand the differences in cost, coverage duration, and best uses for each policy term length. 10-year policies are the cheapest in early adulthood. Other terms provide longer stability.
- Permanent life insurance – If you need lifelong coverage, whole life or universal life insurance builds cash value that remains after the term. The premiums are higher but remain fixed.
- Decreasing term life insurance – Works well for mortgages that decrease over time. Your coverage amount drops annually to match the declining mortgage balance.
Always compare different term lengths and permanent policies. Make sure you get quotes for the coverage timeframe that matches your needs most closely.
How Does 15-Year Term Life Insurance Work?
15-year term life insurance provides a fixed death benefit for 15 years. It works by locking in a guaranteed premium rate for the entire term length. Here’s a closer look at how it works:
- You choose a coverage amount (face value) based on needs like final expenses or income replacement.
- The insurance company guarantees your premium rate for the full 15-year term. It will not increase during the initial term.
- If you pass away during the 15-year term, your beneficiaries receive the full death benefit tax-free.
- At the end of the 15-year term, you have the option to renew annually or convert to permanent life insurance.
The premium remains the same each year while the coverage amount stays fixed. Having steady, guaranteed rates for 15 years makes financial planning simple.
Many policies also come with a conversion option. This lets you exchange term life insurance for permanent coverage later if your needs change. Converting to permanent life insurance helps make sure you maintain lifelong protection.
When Do You Need 15-Year Term Life Insurance?
There are certain life stages and situations where 15-year term life insurance is an excellent fit:
- New mortgage – Matching the term length to your mortgage payoff period ensures your family can pay off the home loan if you pass away.
- Young children – Protect your family’s financial security until your kids are old enough to provide for themselves.
- Major debt – 15-year terms work well for larger debts like student loans that take over a decade to pay off.
- Key employee coverage – Business owners can cover the loss of a vital employee or partner for 15 years.
- Final expenses – 15 years of death benefit coverage provides funds for immediate costs like your funeral.
The key is aligning the 15-year term length with the timeframe in which you specifically need coverage. Term life insurance is most cost-efficient when its protection lines up with your goals.
Potential Pros and Cons of 15-Year Term Life Insurance
Before choosing a 15-year term life insurance policy, weigh the following advantages and drawbacks:
Pros
- More affordable premiums than longer terms or permanent insurance
- Guaranteed level rates for 15 years
- Generally easy to qualify for even with health conditions
- Death benefits paid tax-free to beneficiaries
- Options to renew or convert the policy after 15 years
Cons
- Coverage expires after 15 years
- Renewal premiums get much more expensive as you age
- Usually, no cash value accumulation like permanent life insurance
- You may need to redo underwriting if you reapply later
For many younger adults, the affordability and stability of 15-year term life insurance outweigh the need for lifelong coverage. Make sure to account for your specific financial situation and coverage needs.
Cost of 15-Year Term Life Insurance
The cost of 15-year term life insurance depends primarily on your age and the size of the death benefit. Health class also impacts rates. Here are some other key factors:
- Age – Premiums increase as you get older. 15-year terms are very affordable for those under 40.
- Coverage amount – The higher the death benefit, the more expensive the policy. Go for the amount you need rather than overinsuring.
- Gender – Life insurance rates for men are generally higher than women’s premiums in the same age group.
- Health class – Preferred health classes get lower premiums. Expect higher rates if you have pre-existing conditions.
- Lifestyle – Habits like smoking, dangerous hobbies, or high risk occupations can increase your premiums.
To give you an idea, here are sample monthly costs for 15-year term life insurance from one of Canada’s top insurers:
| Age | $250,000 Coverage | $500,000 Coverage |
|---|---|---|
| 30 | $13 | $23 |
| 40 | $18 | $33 |
| 50 | $50 | $93 |
These premiums are for a healthy, non-smoking male. Your individual rates will depend on your age, gender, lifestyle, and medical background.
Always get quotes from multiple insurance providers. Compare rates with different coverage amounts and term lengths. This ensures you get the most affordable 15-year term life insurance policy that aligns with your budget and needs.
Comparing 15-Year Term Life Insurance Products
When shopping for 15-year term life insurance, you generally want to look for policies with:
- Competitive rates for your age group and coverage amount
- Ability to renew the policy after the initial 15-year term
- Option to convert to permanent life insurance later
- Solid financial strength ratings for the insurance company
Some top insurance providers for 15-year term life insurance are:
- Sun Life – Offers a renewable 15-year term policy with conversion options. Strong overall ratings.
- Canada Life – Known for reliable service and competitive pricing on 15-year term insurance.
- RBC Insurance – Good option for no medical exam, 15-year term life. Renews until age 85.
- Manulife – Flexible conversion and renewal options on their 15-year term life insurance.
Please ensure you’ve got quotes from multiple insurers before purchasing a 15-year term life insurance policy. Compare renewal terms, conversion options, exclusions, and the financial stability of the insurance company.
Who Needs 15-Year Term Life Insurance?
Here are some of the most common demographics and situations where 15-year term life insurance is useful:
- Young families – Protect your family’s financial future if a parent passes away unexpectedly.
- New mortgages – Match the term length to your remaining mortgage to provide payoff coverage.
- Mid-career professionals – Ideal for incomes that dependents rely on if you pass away prematurely.
- Small business owners – Cover overhead, loans, and expenses for 15 years if an owner dies.
- Individuals with medical conditions – Those with health issues may not qualify for permanent life insurance. 15-year term policies are more obtainable.
- Middle-aged parents – Provide for college costs if a parent dies while kids are still dependents.
Think about your specific insurance needs. 15-year term life insurance serves well for shorter-term goals like debt coverage or child-rearing expenses.
Related: Family Life Insurance
Tips for Buying 15-Year Term Life Insurance
Follow these tips when purchasing a 15-year term life insurance policy:
- Get quotes from at least 3-4 different insurance providers to compare rates.
- Buy just enough coverage for your needs. Overinsuring wastes money on higher premiums.
- Pick a highly-rated insurer with strong financial stability to avoid the company going under.
- Know your budget for premiums and stick to it. Don’t pay for more than you can afford.
- Look for policies with renewable or convertible options for flexibility.
- Lock in rates while young and healthy to get the biggest savings.
- Update your beneficiary designations when life events like marriage occur.
- Work with an experienced insurance agent or broker to ensure you understand the policy details.
Related: Top Life Insurance Brokers in Canada
How to Buy 15-Year Term Life Insurance
Here is an overview of the typical process to purchase 15-year term life insurance:
- Determine how much coverage you need based on dependents, debts, final expenses, etc.
- Use an online quote tool or independent agent to compare rates from multiple providers.
- Apply for the policy by submitting your application and answering underwriting questions. This may require a medical exam.
- The insurance company reviews your application and issues a policy after you’re approved.
- Review your policy documents carefully. Make sure beneficiaries are assigned and terms like conversion option are included.
- Pay the first premium to put coverage into effect. Then, pay ongoing premiums annually or monthly to continue the policy.
- Notify your beneficiaries and keep them updated if any life events like marriage or divorce occur.
- Revisit your coverage needs periodically to ensure you have adequate protection.
Where to Buy 15-Year Term Life Insurance
There are several options to purchase 15-year term life insurance:
- Insurance company direct – Buying directly online at a provider’s website can offer convenience. Just ensure you still compare rates.
- Insurance brokers – An independent broker shops rates with multiple insurers and helps you find the best value.
- Online insurance retailers – Aggregator sites like PolicyMe allow you to compare quotes from various insurance companies.
- Individual insurance agents – An agent with a strong relationship with the insurer may provide personalized service.
Think about which purchase method suits your needs best. If you want someone to explain policies and providers in-depth, an insurance broker is very helpful. If you just want a fast and easy way to buy online, insurer websites or aggregators work well.
How to File a Claim on 15-Year Term Life Insurance
No one likes thinking about filing a claim. But knowing the process can ease the burden on your loved ones. Here are the typical steps:
- Get a copy of the insured’s death certificate from a funeral director or doctor. Also gather your policy documents.
- Notify the insurance company of the claim as soon as possible. Many have a dedicated claims phone number or online form.
- Complete the claim form. You’ll need to provide documents that prove the insured’s death, identify the beneficiaries, and authorize payment.
- The insurance company investigates and verifies the claim. This process typically takes 4-6 weeks.
- Once approved, the death benefit is paid out to designated beneficiaries by cheque or bank transfer.
- The beneficiaries can use the tax-free claim payout for anything – paying debts, final expenses, daily costs, education, etc.
Having the right documentation on hand and alerting the insurer can help expedite claims processing. It takes a burden off beneficiaries during an already challenging time.
Conclusion
15-year term life insurance allows you to get substantial coverage at budget-friendly rates. It provides short to mid-range protection tailored to needs like mortgages, child-rearing costs, and debt payoff.
Younger adults, in particular, can benefit from locking in affordable 15-year guaranteed rates. Having peace of mind that your family is protected while debts are paid off offers tremendous value.
Make sure to shop for policies from several top Canadian insurance companies. Look for competitive pricing, strong financial ratings, and conversion options. Visit Life Buzz and speak with our experienced agents to ensure you understand all policy details before buying 15-year term life insurance.
15-year term life insurance FAQs
What happens when my 15-year term life insurance expires?
At the end of the 15-year term, you have a few options:
Renew the existing policy annually at much higher rates.
Reapply for a new 15-year term life insurance policy to lock in lower premiums again.
Convert to a permanent life insurance policy like a whole life without medical underwriting.
Can I cancel my 15-year term life insurance policy early?
Yes, most term life insurance policies allow cancellation at any time. However, you typically cannot get a refund of premiums already paid. There may also be surrender charges if you cancel within the first ten years.
Is 15-year term life insurance renewable?
Most 15-year term life policies are renewable annually past the initial 15-year term until around age 80-85. However, renewal premiums get much more expensive as you age. It's often cheaper to reapply for a new term policy every 15 years.
What conditions make me uninsurable for 15-year term life insurance?
You may have trouble qualifying for coverage if you have severe health conditions like cancer, heart disease, or HIV. High-risk hobbies and occupations can also limit term life insurance eligibility. Talk to an experienced broker about options.
Is a medical exam required for 15-year term life insurance?
Often just a basic health questionnaire is needed. But expect to complete a medical exam for larger coverage amounts. No medical exam policies have quicker underwriting but cost a bit more.
Why get 15-year over ten or 20-year term life insurance?
The 15-year term length works well if you need longer protection than a 10-year policy offers, but 20 years is more than you require. It can nicely match needs like covering a mortgage.
When should I re-evaluate my 15-year term life insurance coverage?
You should re-evaluate your policy as you approach the end of the term, experience major life events, or have changes in your financial obligations. This ensures you still have adequate protection.
Do 15-year term life insurance rates ever go down?
Rates will only decrease if you reapply and qualify for better health classifications as you age. Otherwise, expect premiums to increase at policy renewals or when applying for new coverage.
Can I renew my 15-year term life insurance policy?
Most 15-year term life insurance policies are renewable annually past the initial 15-year term until around 80-85 years old. However, premiums get much more expensive at older ages.
Are return of premium 15-year term life insurance policies worth it?
Return of premium policies that refund your premiums if you outlive the term cost much more. For most buyers, basic 15-year term insurance is the better value.
Who is best for 15 vs. 20-year term life insurance?
15-year terms work well if you have shorter obligations like a mortgage payoff coming up soon. 20-year terms make sense for longer-range goals like covering costs until children are fully independent adults.
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