The Best and Worst Term 10 Policies in Canada

Posted on July 1, 2009 and updated February 28, 2012 in Life Insurance Canada News 3 min read
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Unity Life of Canada joined the Foresters family in April 2008 and as of Jan 23 2012 changed their name to Foresters Life Insurance Company.

Term 10 life insurance can seem like very basic and straightforward coverage. In the purest sense, Term 10 means level premiums for ten years and a level death benefit.

Most policies also have a guaranteed renewal ability that allows the insured to renewal their policy without a medical.

TIP: Buy  policies with a renewal benefit.

Premiums vary sharply from one company to another. Most term policies are guaranteed convertible, meaning they can be converted to a permanent plan without a medical.

TIP: Look into the permanent plans that the term provider offers. Some companies have a conversion feature, but only a limited number of highly priced permanent plans.

Many Term 10 policies in Canada have special features; these are features that are above and beyond the normal Term 10 contract.

For example, AXA Assurance has a built-in extreme disability benefit that pays the insured up to 50% of the face amount of the policy in the event of extreme disability, up to a maximum of $250,000. The extreme disability must occur prior to age 60.

Unity Life has several built-in special features, including a $4,000 critical illness benefit.

Manulife allows the insured to add a children’s term rider at very low cost, which allows children under the policy to upgrade their policy up to 25 times the original face amount without a medical.

The following is a comparison of $500,000 of Term 10 coverage for a 40-year-old male, non-smoker. Notice that the top three premiums are relatively close together, but the bottom three have huge gaps in pricing.

Equitable Life $35.55/month

Canada Life $36.45/month

RBC Insurance $36.90/month

The Cooperators $42.75/month

Assumption Life $57.75/month

Union of Canada $71.31/month

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LSM Insurance
LSM Insurance

Thanks for the note. A Term 10 policy is a good fit to cover a short term business loan or mortgage or other Temporary need. Especially when budget is a concern.

Dan
Dan

Here is the real question, why would a 40 year old want or need a 10 year term? What does he do at 50? Renew at a higher rate? And then what? What a waste of money.

LSM Insurance
LSM Insurance

Hi Norm,

The AXA Extreme Disability Benefit is built into the price of the policy. The benefit is 50% of the policy face amount up to $250,000. The feature ends at the insured’s age 60.

The Unity Life extras are built into the policy. You can see pricing on our instant quote calculator. AXA did recently increase the premiums on their Term 10 and Term 20 plans.

Best Regards … Lorne

Norm
Norm

Hi Lorne. The AXA Assurance policy “extra” (extreme disability benefit) with their Term-10 policy is intriguing. Does this policy have a special name? Does the payment percentage depend on the severity of the disability, the insured’s age at the time, and/or some other criteria?

How does AXA’s Term-10 rates with this extra compare to say Unity Life’s Term-10 rates, for F age 55, preferred rate and regular rate, for say $200K life?

I suppose the Unity Life “extra” ($4K critical illness) depends on the insured amount of the policy?

Please advise whenever you have a minute.
Best regards, Norm.