Suppose you just signed a 25-year mortgage and your first child starts daycare next month. Could your family keep the house if something happened to you? A 25-year term policy covers both your mortgage timeline and your child’s dependency years in one predictable package. Choosing the right term length, though, means understanding what these policies cost and when a different option might work better.
What is Term 25 Life Insurance?
Term life insurance provides death benefit coverage for a specific term length, such as 10, 20, 25, or 30 years. With 25-year term life insurance, the policyholder pays a fixed premium for 25 years in exchange for a death benefit payout if they die during the term.
If the insured outlives the 25 year term, the policy terminates without paying out a benefit. Some policies offer return of premium features. At the end of the term, coverage can be renewed for another term at substantially higher premiums. Policies may also have a conversion option to permanent life insurance.
25-year term life insurance is an affordable way to get a high death benefit for a set period. It’s ideal for temporary needs, such as covering a mortgage, providing for young children, or replacing income for survivors.
25-Year vs. 20-Year vs. 30-Year Options: How to Decide the Right Term Length?
Choosing between 20, 25, and 30-year terms involves balancing premium cost with the risk of needing coverage past the term’s end. The cheapest option is not automatically the best option.
Quick Comparison Table
| Factor | 20-Year Term | 25-Year Term | 30-Year Term |
|---|---|---|---|
| Relative cost | Lower | Mid-range | Higher |
| Best for | Mid-length mortgages; older children | New mortgages; young children | Very young dependants; late-start parents |
| Main trade-off | Expires sooner; may need to reapply at higher rates | Balanced duration and cost | Higher premiums for an extra 5 years of coverage |
You can decide the right term length by:
Step 1: Identify your longest financial obligation.
Calculate both: years remaining on your mortgage and years until your youngest child reaches financial independence (typically age 22 to 25). Take whichever is longer.
Step 2: Check your age against insurer limits.
Most insurers cap 25-year term applications at age 50 to 55. If you are near this boundary, you may need to apply soon or consider a shorter term.
Step 3: Decide on single policy vs. layering.
Some clients prefer one policy for simplicity. Others prefer multiple policies of different lengths so coverage decreases as needs shrink. Layering is covered in a later section.
Step 4: Match term to obligation, not to price.
If your longest obligation is 23 years, a 25-year term covers it. A 20-year term does not.
When 25 Years Is the Right Choice
Young families with children under 10. If your children are babies, toddlers, or in elementary school, a 25-year term protects your income until they finish post-secondary education and become financially independent. Buy a policy when your child is 5 years old, and coverage lasts until they’re 30.
New homeowners with 25-year amortization. A 25-year term aligns with standard Canadian mortgage timelines. If you die during the term, the death benefit can pay off the remaining mortgage balance and keep your family in the home.
Late-start parents. If you’re welcoming children at 35 or 40, a 25-year term extends protection through their teen years and into early adulthood without requiring you to reapply.
People who want to lock in pricing before health changes. Your 30s and early 40s are prime years to secure affordable rates. Conditions like high blood pressure or Type 2 diabetes become more common with age and can significantly increase premiums or make you uninsurable for longer terms.
When a Different Term Length May Be Better
Short-term obligations. If your mortgage has 12 years left and your youngest child is 15, a 25-year term provides more coverage than you need. A 10 or 15-year term costs less.
Age 55 or older. Many insurers cap 25-year term issuance at age 50 to 55. Even if you qualify, premiums at this age are substantially higher. A 10 or 20-year term may be more practical.
Lifelong coverage needs. If you have a disabled dependent who needs support for life, or you want insurance for estate planning, a permanent policy provides coverage that doesn’t expire. Term 100 insurance offers lifetime protection and level premiums for life, though it doesn’t build cash value like whole life plans
Understand the Cost of Term 25 Life Insurance
The cost of 25-year term life insurance depends on 5 factors:
Age: Age is a major determinant of term life insurance rates. Premiums increase as you get older, as the risk of death rises with age. A 30-year-old will pay much less than a 50-year-old for the same coverage amount.
Gender: Insurance companies charge lower premiums to females compared to males of the same age, as statistics show women generally live longer. Gender pricing differences have narrowed in recent years but still persist.
Health: Your overall health is key to getting lower rates. Factors like smoking, high cholesterol, diabetes or heart disease will increase your premiums significantly compared to applicants in excellent health. Poor health can even result in denial of coverage.
Lifestyle: Hazardous hobbies like skydiving or motorcycle racing will boost your rates. Tobacco use also leads to much higher premiums – smoking can double the cost compared to a non-smoker. Geography and occupation may also impact pricing.
Coverage Amount: The dollar amount of life insurance coverage you select directly impacts the premiums. More coverage equals higher premiums. For a given individual, a $1 million policy will cost more than a $500,000 policy. However, the cost per $1000 of coverage decreases with higher amounts.
Here are some sample monthly premium costs for a 25-year $500,000 term life insurance, as of January 2026:
| Age | Male Smoker | Female Non-Smoker |
|---|---|---|
| 30 | $50 | $35 |
| 40 | $100 | $55 |
| 50 | $300 | $140 |
As shown, premiums rise steeply with age. Female non-smokers’ rates are the lowest, while older male smokers pay the most.
After the initial 25-year term, renewal premiums typically soar to 4-5x the original cost. With a policy renewal at age 55, a person may pay $500 per month for the same coverage that originally cost $100.
Common Mistakes When Buying a 25-Year Term
These errors can leave you underinsured, overpaying, or stuck with a policy that doesn’t fit.
Underinsuring. Many Canadians buy just enough to cover their mortgage but forget about income replacement, childcare costs, and education expenses. A common guideline is 10 times your annual income plus outstanding debts, though your actual need depends on your family’s situation.
Ignoring the conversion feature. Conversion lets you switch to permanent insurance without a medical exam, which is valuable if your health declines. If you don’t know your policy’s conversion deadline (often age 65 or 71), you may miss the window entirely.
Assuming renewal is affordable. Renewal is guaranteed, but priced for worst-case scenarios. Plan to reapply if you’re healthy, and start shopping 12 months before expiry.
Delaying the application. Health can change unexpectedly. A diagnosis of high blood pressure, elevated cholesterol, or something more serious can significantly increase premiums or limit your options. Locking in coverage while healthy protects against future uncertainty.
Naming your estate as the beneficiary. If your estate is the beneficiary, the death benefit may go through probate, causing delays and legal fees. Naming a spouse, child, or trust directly ensures faster payout.
Where Can You Buy Term 25 Life Insurance in Canada?
When purchasing life insurance, it’s advisable to buy from a highly rated insurer. Some outstanding life insurance companies in Canada that offer term 25 products are Sun Life Financial, Manulife, RBC Insurance, iA, and ivari. You can get quotes and apply directly through insurer websites. However, this only lets you compare rates from one company.
It is advisable to work with an independent broker who can shop multiple insurers to find you the best rate and the top value on term 25 life insurance tailored to your unique needs.
Summary
For Canadians needing life insurance coverage for 25 years, term 25 policies can provide substantial protection. Premiums for 25-year term life insurance are affordable compared to permanent insurance. This makes term 25 ideal for covering temporary needs like mortgages, income replacement, and final expenses for several decades. Consider renewal rates and conversion options when choosing a 25-year term life policy. Work with an experienced, independent broker to shop among top insurers like Sun Life, Manulife, and Canada Life and find the best rate for your situation.
FAQs on Term 25 Life Insurance
What does 25-year term life insurance cover?
25-year term life insurance provides a set death benefit amount if the insured dies within 25 years. It covers needs like mortgages, income replacement, debts, and final expenses.
How much does 25-year term life insurance cost?
For a healthy 30-year-old male, $500,000 of coverage costs about $50/month. Rates increase with age and health risks. Female and non-smoker rates are lower.
Is term 25 life insurance renewable after the initial term?
Most term 25 policies are renewable for another term without medical underwriting but at much higher premiums. It is often cheaper to reapply for a new term policy.
What is a term 25 life insurance conversion option?
Many term 25 policies have a conversion option that allows switching to permanent insurance later without medical exams if you develop health conditions that make renewing difficult.
Should I choose term 25 over term 20 life insurance?
Term 25 covers longer-term needs but costs more than term 20 annually. Make sure you get quotes for both terms and choose the best fit for your specific needs and budget.
What are the best term 25 life insurance companies?
The top insurers for term 25 life insurance are Manulife, Sun Life, RBC Insurance, Canada Life, ivari, and Industrial Alliance. Compare quotes to find the best rates.
Can I get term 25 life insurance with pre-existing health conditions?
Yes, you may qualify for rated term 25 life insurance with certain health conditions. Premiums are higher than standard rates. Guaranteed issue life insurance is also an option if you cannot get approved for term coverage.
