Term 100 life insurance is a very misunderstood product. The name is partially a misnomer. “Term” normally implies that this is a term policy, but Term 100 means they are actually permanent policies because they have a term of 100 years and best of all, the premiums never increase.
The policies are technically paid up at age 100, so the premiums cease at that point, but the coverage continues. Some Term 100 policies in Canada do offer a cash value, but most of them are offered on a stripped-down basis. This means that the owner does not get any return of premium if the policy is cancelled prior to death.
Of course, one of the drawbacks of Term 100 policies is that they’re payable to age 100 (your entire life) and if the policyholder misses a payment at any point prior to death, the policy will lapse after a 30-day grace period. This can create a problem for policyholders who switch banks, but forget to tell their broker or insurance carrier.
You can find out more about this product from the video below.
Lorne Marr from LSM Insurance shares his experience:
Term 100 Life Insurance policy is a unique type of policy. It is really a blend, well, essentially, it is a permanent policy where the cost is level for life and you have life-time protection but it’s more of a stripped down type of a permanent policy. There is no cash accumulation and that helps you keep your initial cost lower. So, it is a great fit for people who like the idea of permanent life insurance but don’t want or aren’t that interested in cash accumulation. So, it gives you that value of having permanent life insurance that you know, will be with you for life, but then you are paying a lower cost which a lot of people like in comparison to a whole life type policy.
You should consider Term 100 life insurance in following situations:
One you purchased a Term to 100 life insurance policy, you are covered PERMANENTLY and pay your premiums till the age of 100.
Should you miss any payments and do not fix the situation within 30 days, your coverage disappears.
Should you decease while a policy is in place, your beneficiary (or beneficiaries) will receive a lump sum payment that is called face value (e.g. $500,000).
An overview below shows a range of Term to 100 life insurance monthly rates based on different coverages, gender, age, and smoking habits.
| Non-Smoker* (monthly rates) | Smoker* (monthly rates) | ||
| Coverage of $50,000 | Female, age 25 | $25 | $30 |
| Male, age 25 | $28 | $35 | |
| Female, age 55 | $77 | $103 | |
| Male, age 55 | $90 | $145 | |
| Coverage of $250,000 | Female, age 25 | $85 | $115 |
| Male, age 25 | $106 | $142 | |
| Female, age 55 | $327 | $460 | |
| Male, age 55 | $390 | $575 | |
| Coverage of $500,000 | Female, age 25 | $165 | $220 |
| Male, age 25 | $197 | $270 | |
| Female, age 55 | $627 | $890 | |
| Male, age 55 | $750 | $1,095 | |
| Coverage of $1,000,000 | Female, age 25 | $320 | $423 |
| Male, age 25 | $380 | $525 | |
| Female, age 55 | $1,236 | $1,730 | |
| Male, age 55 | $1,450 | $2,157 | |
*Please note that for non-smokers preferred rates are shown and regular rates for smokers.
Despite its name Term to 100 (also called Term 100 insurance) is a permanent life insurance. There are three types of permanent life insurance out there:
One big difference between Term 100 and Whole Life / Universal Life insurance is that Whole Life and Universal Life insurance have an accumulation component (cash value of a policy) and Term 100 does not have it.
That is reflected in insurance premiums. Typically, Term 100 will be cheaper than Whole Life Insurance or Universal Life Insurance.
Lorne Marr from LSM Insurance shares his view:
“I am going to talk a little bit today about term 100 life insurance. The name can be a little misleading because traditionally, term policies go up in cost as you get older. Term 100 policies, however, are generally a permanent policy, meaning that the coverage provides premiums that are level for life and it also provides lifetime protection. You don’t have to worry about the cost expiring as you get older. Some term 100 policies do expire at 100, but most policies stay with you for life. Having that life time protection provides people with a lot of piece of mind.
It’s a lot different from other permanent policies, such as a whole life policy. Whole life policies also provide lifetime protection, but those build a cash value as well. The term 100 policy differs in that there is no cash value, it is kind of like a stripped down whole life policy, but the advantage is the cost is a lot lower. You have that permanent coverage, but at a much lower cost than you would have with a whole life type policy. A lot of people like that feature of the term 100 policy.
People may use a term 100 policy to fund a certain permanent need, fund a buy-sell agreement, charitable giving, or final expenses, for example. There are a lot of different ways and purposes for term 100 insurance. The most important thing is to work with an independent broker, one who has access to all the different companies because not a lot of companies currently offer term 100 life insurance now. So, you want to work with a broker who has access to all the companies that are offering the product and can provide you with unbiased advice.”
