If you’re a Canadian planning for your financial future, you likely thought about how to protect your family during your peak earning years. A Term to Age 65 life insurance policy is designed to provide a financial safety net that lasts right up until the traditional age of retirement. For many families, it’s a practical fit: it can protect a mortgage, replace income during working years, and keep premiums level for the term.
What is Term to Age 65 Life Insurance?
Term to Age 65 life insurance is a specific type of term life insurance that provides coverage for a fixed period, ending when you turn 65. Unlike policies with a set number of years (e.g., Term 20, Term 30), this policy’s duration is tied directly to your age.
Most Term to Age 65 policies are designed for stability and predictability:
- Level premiums – Your monthly or annual payment is guaranteed to remain the same from year to year until expiration at age 65.
- Level death benefit – The payout your beneficiaries receive upon your death is fixed for the entire term.
- A defined endpoint – Policies expire when the insured reaches age 65 in most cases.
At age 65, many term-to-65 policies simply end. Some contracts may offer limited renewal options, but others are non-renewable and/or non-convertible, especially certain group-conversion term-to-65 plans. Always confirm the renewability and conversion terms in your specific contract before buying.
How Does It Work in Practice? Let’s use an example. Millie, a 40-year-old non-smoker, buys a $750,000 Term-65 policy to cover her mortgage and provide for her two young children.
- The insurer assesses her health and lifestyle (the underwriting process) and approves her for a monthly premium of $75.
- For the next 25 years, Millie pays $75 every month. Her premium will not change.
- If Millie passes away at any point before her 65th birthday, her husband receives a tax-free lump sum of $750,000.
- When Millie turns 65, her policy expires. At this point, she can either let the coverage lapse or, if her policy allows, convert it to a permanent policy or renew it annually at a much higher cost.
Term to age 65 insurance gives you an affordable way to secure life insurance explicitly tailored to your pre-retirement years.
Why is Age 65 a Key Milestone?
Term-65 coverage is built around the idea that your financial obligations change significantly around retirement. By age 65, many Canadians have:
- Paid off their mortgage or have a small balance remaining.
- Raised their children, who are now financially independent.
- Built up a retirement nest egg (RRSPs, pensions, etc.) that can support a surviving spouse.
Term to Age 65 policy aligns perfectly with this life trajectory, providing high-value coverage when your financial risks are greatest (mortgage, income replacement for dependents) and ending when your need for large-scale insurance may have diminished.
Who is Term to Age 65 Best For?
Term to age 65 life insurance can be ideal for certain demographics and life stages:
- New Homeowners & Young Families: If you’re in your 30s or 40s with a 25- or 30-year mortgage and young children, a Term-65 policy provides a seamless blanket of protection that covers both obligations until you’re close to retirement.
- Peak Income Earners: For those in their highest-earning years, income replacement protection is needed for a surviving spouse or partner to maintain their standard of living.
- Pre-Retirees: Someone in their 50s might purchase a Term-65 policy to bridge the final 10-15 years to retirement, ensuring a sudden loss of income does not derail their partner’s retirement plans.
- Business owners: Entrepreneurs can benefit from coverage to protect against business interruptions.
If you fall into one of these demographics and want coverage tailored to your working years, term to age 65 insurance can be a great fit.
How Much Does Term to Age 65 Insurance Cost in Canada?
The cost of the term to age 65 life insurance depends on several factors, including:
- Age – Premiums increase as you get older. Coverage costs less when purchased at a younger age.
- Health – Those in good health qualify for preferred rates, while medical issues can increase premiums.
- Lifestyle – Risky hobbies, high-risk occupations, smoking, or having pre-existing conditions may result in higher rates.
- Coverage amount – Policies with higher death benefits have higher premiums.
To give you an idea, here are sample monthly premiums for healthy non-smokers purchasing $500,000 and $1 million of coverage:
| Age | Gender | $500,000 Coverage | $1,000,000 Coverage |
|---|---|---|---|
| 35 | Male | $65 | $118 |
| Female | $29 | $85 | |
| 45 | Male | $135 | $255 |
| Female | $55 | $175 | |
| 55 | Male | $360 | $700 |
| Female | $125 | $440 |
Important Disclaimer: The table below shows sample monthly premiums for healthy non-smokers in a Preferred health class. These are for illustrative purposes only. Your actual premium will depend on your personal health profile and the insurer you choose. Rates can vary between companies. Use insurer quote tools or a licensed broker to compare like-for-like quotes.
Term to 65 vs. Term 20/30 vs. Permanent Life Insurance
Let’s take a look at how term-to-65 policies compare to other alternatives:
| Feature | Term-to-65 Insurance | Term 20 / Term 30 Insurance | Permanent Insurance |
|---|---|---|---|
| Premium Stability | Guaranteed Level Premiums until you turn 65. | Guaranteed Level Premiums for the entire 20 or 30-year term. | Guaranteed Level Premiums for your entire life (Whole Life). Can be flexible with Universal Life. |
| What Happens at End of Term | Terminates at age 65. No cash value. | Terminates after 20 or 30 years. No cash value. | Coverage never ends as long as premiums are paid. |
| Renewable? | Yes, but with limitations | Yes | Not applicable |
| Convertible? | Yes | Yes | Not applicable |
| Best Use Case | To provide a financial safety net during your working years | To cover specific, time-bound financial obligations | For lifelong needs |
So, how can you decide whether term insurance to age 65 is your best option? Ask yourself:
- Do I need life insurance specifically until age 65? Or would a shorter term of 10 or 20 years work?
- Do I need coverage for my entire life? If so, permanent life insurance may be better.
- How much coverage do I need based on debts, income, and final expenses?
- How much are premiums based on my age, health status, and lifestyle? Is this affordable?
- What renewal or conversion options come with the policy after age 65?
- Does the insurer have strong financial ratings and a reputation for claims payment?
Taking these factors into consideration will allow you to assess whether term to age 65 insurance aligns with your specific requirements and financial constraints.
If Term to Age 65 life insurance doesn’t meet your needs, there are other term lengths to consider. Read our helpful guides comparing the costs, pros and cons, and best uses for Term 10, Term 20, Term 25, Term 30, and Term 40 life insurance.
How to Buy Term to Age 65 Life Insurance in 5 Easy Steps
Buying term to age 65 insurance is straightforward when you follow these steps:
Step 1: Get Quotes
Start by visiting insurer websites or working with a broker to get premium quotes. Provide details on:
- Your age and gender
- Health status and medical history
- Lifestyle and hobbies
- Desired coverage amount
Quotes allow you to compare costs across providers.
Step 2: Compare Insurers
Look at insurers’ financial strength ratings and policy features when comparing quotes. Key factors include:
- Ratings from agencies like AM Best
- Renewability and convertibility options
- Range of permanent products if converting later
- Online tools and resources
Tip: Compare Conversion Options, Not Just Premiums
A policy that is $5/month cheaper but has poor conversion options is not a good deal. Ensure the insurer allows conversion to a wide range of their permanent products.
Step 3: Select Coverage Amount
Choose a coverage amount to pay off debts, replace income, and cover final costs based on your financial situation.
Step 4: Complete Application
Your application will request personal, medical, and lifestyle details to underwrite your policy. This may require a medical exam.
Step 5: Accept Offer & Pay Premiums
If approved, the insurer will offer a policy. Review details closely before accepting and paying your first premium installment.
Following these simple steps will guarantee you find the most suitable and affordable term to age 65 coverage. Connect with an advisor for additional guidance.
Your Life Insurance Plan at Age 65: What’s Next?
As your term life insurance policy approaches its end at age 65, it’s a crucial time to re-evaluate your financial situation and decide on the next steps. Your choice will depend entirely on whether your major financial obligations have ended or are still ongoing.
If You Still Have Financial Dependents
If you are still providing for a spouse or children who are not yet self-sufficient at age 65, maintaining life insurance coverage is essential. Your best option is to use the conversion privilege (if available) to change your current term policy into a permanent one before it expires. This allows you to continue your coverage without a new medical exam, avoiding the risk of being denied or facing prohibitively high premiums.
If Your Goals Are Complete
If your original goal was simply to replace your income during your working years and ensure major debts like your mortgage were paid off by retirement, then you can let the policy expire, as your family’s largest financial risks have passed.
If Your Goal Is for Final Expenses or Your Estate
If you want to have funds available to cover funeral costs, pay potential estate taxes, or leave a financial gift to your heirs, you will need a permanent life insurance policy. You can either convert your existing term policy or purchase a new permanent policy with a smaller coverage amount, tailored to these specific needs.
In summary, take a close look at your financial responsibilities at age 65. This review will guide you to the right decision: letting the policy expire, converting it, or buying a new one.
The Bottom Line
For Canadians who need robust yet budget-friendly life insurance tailored specifically to their pre-retirement years, term-to-age 65 policies can provide the perfect solution. Taking the time to understand this policy type, get quotes, and ask the right questions will empower you to make a wise insurance decision.
Now that you grasp the fundamentals of term-to-age-65 life insurance, it’s time to obtain a customized quote that suits your needs. Speak with one of our advisors at Life Buzz. We’ll shop rates from Canada’s top insurers to match you with the most affordable policy.
FAQs on Term to Age 65 Life Insurance
How much coverage do I need?
Aim to purchase enough coverage to pay off debts like your mortgage and loans, replace at least ten years of income for dependents, and cover final expenses based on your desired funeral arrangements. An advisor can help determine the right amount.
What is the eligibility age for a term to age 65 insurance?
Eligibility depends on the insurer and the specific product. Some term products may accept applicants well beyond age 65, while other products set lower age limits. Always verify the issue age limits for the policy you’re considering.
Is a medical exam required for a term to age 65 insurance?
Simplified issue policies are available with some insurers, where you can get coverage by completing a health questionnaire with no medical exam required.
What conditions make term to age 65 insurance more expensive?
Factors like high cholesterol, heart disease, cancer, obesity and smoking can increase your rates. Certain hazardous hobbies or occupations can also raise premiums.
Why does term to age 65 insurance get more expensive after 65?
After 65, renewal rates are higher because the insurer doesn't require new medical evidence. They assume higher risk as you age, so premiums increase.
Can my spouse also get coverage for the term to age 65?
Yes, many policies can cover your spouse as well. Some insurers offer joint first-to-die plans, so coverage continues as long as one spouse is alive. Discuss options with an advisor.
