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Term 10 Life Insurance in Canada

The Complete Guide to Term 10 Life Insurance in Canada
The Complete Guide to Term 10 Life Insurance in Canada

Term life insurance is a common choice for Canadians looking for temporary financial protection for their families. Term 10 life insurance is a specific type of term policy that offers more affordable premiums by providing coverage for a 10-year term. This detailed guide aims to cover everything you need to know about term 10 life insurance in the Canadian context.

What is Term 10 Life Insurance in Canada?

Term 10 life insurance, also known as 10-year term insurance, is a policy that provides life insurance coverage for exactly ten years.

The “10-year term” refers to the fixed length of time that coverage is in place. Term lengths may vary from 10 to 30 years for term life insurance policies in Canada.

With a Term 10 life insurance policy, your premiums are fixed throughout the entire 10-year term. This means the amount you pay per month or year will not increase over the decade of coverage.

The death benefit also remains the same throughout the ten years. If you pass away at any point while the policy is active, your designated beneficiaries will receive the total tax-free death benefit payout.

If you outlive the 10-year term, coverage expires unless you choose to renew the policy or convert to a different type of permanent life insurance.

Term 10 life insurance tends to have more affordable premiums than longer 20 or 30-year terms. It also costs less than permanent life insurance options like whole life or universal life.

Term 10 offers insurance protection without building any cash value within the policy.

According to the data from Statista, individual life insurance accounts for 65 per cent of the value of total life insurance policies in-force in Canada in 2021 – driven primarily by term life insurance. (source: https://www.statista.com/statistics/611757/life-insurance-product-distribution-canada/). Ten-year terms remain one of the most popular options for Canadians seeking temporary coverage.

Types of Term 10 Life Insurance in Canada

There are two main types of term 10 life insurance contracts available in Canada:

Level Term 10

With a level term 10 policy, your death benefit amount and annual premium remain level and unchanged for ten years of coverage

This is the more standard version of term 10 insurance in Canada and offers predictable, steady costs for a decade of protection. Your beneficiaries would receive the same payout no matter when in the ten years you pass away.

Related: Level Term Life Insurance

Decreasing Term 10

Decreasing term 10 life insurance policies have a death benefit that decreases incrementally over the ten years while your premium payments remain constant.

This can match a need that steadily declines over time, like a mortgage balance that is paid down over ten years. The death benefit matches the remaining balance.

Related: Decreasing Term Life Insurance

Both types provide coverage for precisely ten years at an economical rate compared to other forms of life insurance. You just need to decide if a level or decreasing payout better aligns with your specific needs.

Sample Term 10 Quotes from Major Canadian Insurers

Here are some sample monthly premiums for $250,000 of term 10 life insurance coverage from leading companies in Canada:

AgeGenderSmokerSun LifeCanada LifeRBC Insurance
30MaleNo$27$29$28
30FemaleNo$21$23$22
45MaleNo$42$44$43
45FemaleNo$32$34$33
60MaleNo$102$105$103
60FemaleNo$79$81$80

Premiums are based on individual risk factors assessed during the application process, but this table provides an approximate comparison of rates between major Canadian life insurers.

Alternatives to Term 10 Life Insurance in Canada

While term 10 life insurance meets specific short and medium-term coverage needs, there are a few other options that Canadians may want to consider as well:

  • Longer Term Lengths – Insurers also offer term life insurance for 15, 20, 25, or 30 years. These policies have slightly higher premiums than term 10, but extend your coverage for longer.
  • Permanent Life Insurance – Permanent life insurance options like whole life insurance and universal life insurance provide lifelong coverage as long as you pay the premiums. Premiums are higher, but policies build cash value that you can access.
  • Group Life Insurance – Many Canadian employers offer group life insurance policies as part of their benefits package. This insurance can supplement an individual term 10 policy.
  • Guaranteed Issue Life Insurance – If you have pre-existing health conditions that make qualifying difficult, guaranteed acceptance life insurance options don’t require a medical exam. However, coverage amounts are lower.

For Canadians wanting temporary coverage for 10 years or less, term 10 life insurance is often the most affordable option. A different type of policy may better serve those who prioritize lifelong protection.

How Does Term 10 Life Insurance Work in Canada?

How Does Term 10 Life Insurance Work in Canada?
How Does Term 10 Life Insurance Work in Canada?

Here is an overview of how a term 10 life insurance policy works in Canada:

  • You apply for a 10-year term life insurance policy from a Canadian insurance company and choose your desired coverage amount
  • The insurance company will assess your health and other risk factors through the application process to decide on issuing a policy and at what premium cost
  • If approved, you pay a monthly or annual premium to keep the term 10 policy active for the entire 10-year term
  • Your premium is guaranteed not to increase over the ten years even if your health declines
  • If you pass away at any point during the ten-year term, your named beneficiaries receive the full tax-free death benefit
  • If you outlive the ten-year term, the coverage expires unless you proactively renew or convert the policy
  • At the end of the term, you would need to re-apply, and premiums will likely be higher due to aging
  • Term 10 insurance only pays out if you die during the term and does not accumulate any cash value

The term 10 structure provides pure protection for ten years. This contrasts with permanent life insurance, which builds cash value within the policy.

Everyday Situations for Term 10 Life Insurance in Canada

There are a few scenarios where term 10 life insurance can be well-suited to meet coverage needs for Canadians:

Paying Off Short-Term Debt

If you have debts like personal loans, lines of credit, auto financing, or a mortgage that will be paid off within ten years, a term 10 policy can cover the outstanding balance if you pass away prematurely.

Once short-term debts are paid off, the need for insurance coverage decreases significantly. A 10-year term aligns well with this declining need.

Bridging a Temporary Insurance Gap

You may need to bridge a gap between one expiring life insurance policy and securing a new plan. 10-year term insurance can provide temporary coverage if health issues create a waiting period before qualifying for permanent life insurance.

Locking in Low Premiums at a Young Age

Younger Canadians can lock in very low premiums for ten years, which will remain at a level as they age. This avoids having to start with much higher rates at an older age when seeking longer 20—or 30-year coverage.

Matching Specific Short-Term Needs

If you need coverage for specific short-term needs, such as covering family living expenses until the kids graduate or maintaining your spouse’s quality of life over the next decade, a term 10 policy can be tailored to match that temporary need.

Pros and Cons of Term 10 Life Insurance in Canada

Pros and Cons of Term 10 Life Insurance in Canada
life buzz quote in canada new 8 1
Pros and Cons of Term 10 Life Insurance in Canada

There are several key advantages and potential limitations to consider regarding term 10 life insurance in the Canadian context:

Advantages

  • Lower premiums than longer terms or permanent insurance options
  • Ability to lock in guaranteed premiums for the entire ten years
  • Can potentially convert to a permanent insurance policy later without new medical underwriting
  • Pure protection to cover temporary needs without extra costs

Limitations

  • No cash value accumulation or savings element
  • Older age at renewal may mean much higher premiums
  • May need to provide new medical evidence and qualify again after ten years
  • Does not provide lifelong coverage like permanent policies

Overall, term 10 life insurance can provide an affordable way for Canadians to meet short-to-medium-term coverage needs. However, it lacks the lifelong protection and cash value components of permanent insurance.

What Factors Determine Term 10 Insurance Costs in Canada?

The premium costs for term 10 life insurance in Canada depend primarily on the following vital factors:

Age at Purchase

Premiums are significantly lower when you are younger and buy term insurance in your 20s or 30s. A healthy 30-year-old may pay $30 monthly, while a 55-year-old pays $100 monthly for the same coverage.

Health and Lifestyle

Applicants in excellent health with minimal risk factors will qualify for preferred rates. Those with many medical issues or risky lifestyles may pay higher premiums or be declined.

Gender

Due to differing life expectancies, women of the same age can typically obtain lower term 10 rates than men for an equivalent coverage amount.

Coverage Amount

Higher death benefit amounts mean higher monthly premiums. A $500,000 policy will cost more than a $250,000 policy for any individual.

Extra Riders

Additional riders providing benefits like accidental death, disability, or critical illness coverage add to the base premium costs.

Comparing Term 10 Insurance Providers in Canada

When shopping for term 10 life insurance, it’s essential to compare policies from the Top insurance providers in Canada, such as Sun Life, Canada Life, Manulife, RBC Insurance :

Sun Life

  • Offers 10, 15, 20 and 30 year term lengths
  • Coverage up to $50 million
  • Streamlined online quotes and application process
  • Strongest financial strength and credit ratings

Canada Life

  • Term 10 and Term 20 plans available
  • Ability to convert term 10 policy to permanent insurance
  • Apply and manage your policy entirely online
  • Consistently high ratings for claims-paying ability

Manulife

  • Competitive 10 or 20-year term life options
  • Coverage amounts up to $50 million
  • User-friendly website and mobile app
  • Long-standing reputation and highly rated

RBC Insurance

  • 10-year and longer term lengths offered
  • Coverage from $50,000 up to $25 million
  • Smooth online application process
  • Backed by RBC, Canada’s largest bank

Always compare term 10 rates and features between providers to find your optimal plan. Working with an experienced independent insurance broker can help you identify your best option.

Who is Term 10 Life Insurance Ideal For in Canada?

Based on their circumstances and coverage needs, specific demographics are often best suited for term 10 life insurance in Canada:

Young Individuals and Families

Canadians in their 20s and 30s can benefit from locking in guaranteed low premiums for an initial 10-year term, avoiding much higher costs later in life.

New Parents

Many new parents seek life insurance coverage for the first time to protect their kids, and a term 10 policy provides affordable premiums.

Pre-Retirees

Older pre-retirees may only need short-term coverage to bridge into retirement years or protect assets as they transition out of work.

Middle-Income Earners

With tighter budgets, middle-income professionals can gain adequate protection through budget-friendly term 10 policies.

Owners of Small Businesses

A Term 10 policy can protect small business owners by covering loans or expenses if they pass away before transitioning the company.

If your financial needs align with short or medium-term coverage, term 10 insurance may suit you well.

Smart Shopping Tips for Term 10 Insurance in Canada

Smart Shopping Tips for Term 10 Insurance in Canada
Smart Shopping Tips for Term 10 Insurance in Canada

Follow these tips when shopping for the optimal term 10 life insurance policy in Canada:

  • Compare quotes from multiple highly rated providers to identify the most competitive pricing
  • Consider applicable extra benefits like accidental death, disability riders, or child insurance to enhance your base coverage
  • Work with an experienced broker or advisor who can explain all your options
  • Look for an insurer with strong financial stability, excellent credit ratings, and high claims-paying ability
  • Understand renewal, conversion and extension provisions before committing to any company
  • Answer health and lifestyle questions fully and truthfully during underwriting
  • Opt for easy online application and digital payment methods when available
  • Review beneficiaries often and keep contact information updated

Following these tips will help you secure optimal rates on term 10 coverage that meets your family’s needs and budget.

Related: Tips for Buying the Right Term Life Policy

Purchasing Term 10 Life Insurance in Canada

There are a few simple steps to purchasing term 10 life insurance coverage in Canada:

Getting a Quote

You can quickly get a personalized premium estimate using insurer websites or an online comparison portal. Provide details on age, health, coverage amount and other parameters.

Initiating the Application

When ready to proceed, begin a complete application on the insurance company site or through an advisor. You’ll answer in-depth questions about lifestyle, family history, medications, and health.

Completing Policy Requirements

In most cases, for term 10, you will need to complete a paramedical exam and potentially other medical tests depending on your age and desired coverage amount.

Waiting for Policy Approval

If you are approved, the insurance company usually takes 2-3 weeks to review your application and issue a policy.

Making the First Premium Payment

Once approved, you’ll need to pay your first monthly, quarterly or annual premium to put the coverage into effect.

The purchase process for term 10 insurance in Canada is generally quick and can be completed online in many cases.

Beyond Term 10 Life Insurance, there are other types of term life insurance such as Term 20, Term 25, Term 40, and more. Term life insurance provides temporary coverage for a set period of time, with options for 10, 15, 20, 25, 30 years and beyond. Each policy length meets different needs. Check out these helpful articles to gain more insights into Term 20 Life Insurance, Term 25 Life Insurance, and Term 40 Life Insurance, Term 30 Life Insurance, Term to Age 65 Life Insurance, etc. Discover the differences in policy lengths, costs, and best uses for coverage.

Where Can Canadians Buy Term 10 Life Insurance?

You have several options to consider when buying term 10 life insurance in Canada:

Directly From Insurance Carriers

Major insurance companies like Sun Life, Manulife, RBC Insurance and Canada Life allow Canadians to get quotes and apply for term 10 insurance directly through their website or contact center.

Through an Independent Insurance Broker

Brokers have access to policies from a wide range of carriers. A broker shops the market on your behalf to match you with your optimal term 10 insurance policy.

Related: Top Life Insurance Brokers in Canada

Via Workplace Group Benefits Plan

Some Canadian employers provide group life insurance plans up to certain coverage maximums as part of the benefits package. You can supplement this with an individual term 10 policy.

Independent brokers can compare many insurers to find you the ideal blend of low premiums, solid financial ratings, added benefits, and excellent service.

Making a Term 10 Life Insurance Claim in Canada

Here are the steps for your beneficiaries to claim on a term 10 life insurance policy in Canada:

  • Please contact the insurance provider to report the insured’s death. Most insurers have dedicated claims departments and hotline numbers.
  • The company will send the required claim forms to authorize the release of medical records and payment of the death benefit.
  • Beneficiaries must submit an official copy of the death certificate to provide evidentiary proof of death.
  • The insurance company will review the claim in detail and verify the policy was active at the time of death.
  • Once approved, the tax-free death benefit is paid out in a lump sum to the named beneficiaries.
  • Benefits are typically paid out in Canada within 1-2 weeks of claim approval for straightforward claims. More complex cases may require further review.
  • Beneficiaries are free to use the claim payout to cover expenses, pay off debts, fund education, or invest it.

The streamlined claims process helps beneficiaries in Canada access these vital funds quickly during their time of grief.

Conclusion

Term 10 life insurance can provide Canadian families, individuals, and business owners with budget-friendly tax-free coverage for a 10 year term.

While not right for everyone, term 10 insurance is well-suited to certain short—and medium-term needs, such as covering a mortgage, bridging a gap, or locking in low rates when young.

Comparing quotes from the top Canadian life insurers, coupled with the guidance of an experienced independent broker, helps ensure you secure competitively priced coverage.

With proper planning, term 10 life insurance can give Canadians invaluable temporary peace of mind, knowing their loved ones will be cared for financially.

If you think term 10 life insurance may be right for you, visit LifeBuzz.ca to access our quoting tool. Get a customized premium estimate from top-rated Canadian life insurance providers in under 2 minutes. You can also find additional resources and expert advice to help make sure you secure the ideal coverage at the best rate. Don’t leave your family’s future to chance – get a quote for term 10 insurance today.

Frequently Asked Questions (FAQs)

Q: At what age should I buy term 10 life insurance?

A: The younger you are when you buy term 10 insurance, the lower your premiums will be. Buying in your 20s or 30s locks in the lowest rates.

Q: Who needs to be my term 10 life insurance beneficiary?

A: You can name anyone as the beneficiary - usually a spouse, child, or other family member who depends on you financially.

Q: What happens if I miss a payment on my term 10 life insurance?

A: If you miss a payment during the 10-year term, the policy will lapse and no longer provide coverage.

Q: Can I get a term 10 life insurance policy if I have depression?

A: Yes, you can get approved but may pay higher rates. Severe depression may result in being declined.

Q: Will my term 10 life insurance payout for accidental death?

A: Yes, term 10 life insurance covers death from any cause, including accidents, during the 10-year term.

Q: Can I bundle my term ten life insurance with other types of insurance?

A: Many insurers allow you to bundle term 10 life insurance with things like critical illness insurance for added value.

Q: Can I get term 10 insurance without a family doctor?

A: Yes, you can still get coverage without a family doctor by completing a paramedic medical exam instead.

Q: Will health conditions excluded from the application be covered later in the term 10 policy?

A: No, conditions excluded due to your health when applying will remain excluded over the 10-year term.

Q: Can I adjust my term 10 life insurance death benefit after getting coverage?

A: The death benefit cannot be adjusted during the 10 year term but you can change it at renewal.

Article Sources:

Delve into the principles that guide our dedication to truthfulness, clarity, and editorial autonomy by exploring the Lifebuzz.ca Editorial Policy. This is the cornerstone of our esteemed status as the premier trusted source for life insurance information in Canada.

  1. Term 10 Life Insurance – https://www.manulife-insurance.ca/
  2. What is 10 year term life insurance? – https://www.canadalife.com/
  3. Term 10 Life Insurance Quotes, Rates, And Expert Tips – https://lsminsurance.ca/
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Written by Ben Nguyen

Ben Nguyen is an award-winning insurance expert and industry veteran with over 20 years of experience. He is the chairman and director of IDC Insurance Direct Canada Inc., one of Canada's leading online insurance brokerages.

Ben is renowned for his extensive knowledge of life, health, disability, and travel insurance products. He is the prolific author of over 1,000 educational articles published on LifeBuzz, BestInsuranceOnline, and InsuranceDirectCanada. His articles provide Canadians with advice on making smart insurance decisions.

With a Bachelor's degree in Actuarial Science and a Fellow of the Canadian Institute of Actuaries (FCIA) designation, Ben is frequently interviewed by media as an insurance industry spokesperson.

He has received numerous honors including the Insurance Council of Canada’s Pivotal Leadership Award, the Canadian Insurance Hall of Fame induction, and the President’s Medal from the Canadian Institute of Actuaries.

Ben continues to shape the vision and strategy of IDC Insurance Direct as chairman. He is dedicated to advancing the insurance industry through his insightful leadership.

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