Term 10 versus Term 20 Life Insurance

Term 10 and Term 20 life insurance are a classification of life insurance product often touted as good starter plan for those buying life insurance for the first time. Ever wonder what the differences between the two plans really are?

  • Term 10 Life insurance policies offer level rates for 10 years, but Term 20 policies offer level rates for 20 years.
  • Term 10 policies are generally used to fund short-term insurance needs, while term 20 policies can be more attractive for funding longer temporary insurance needs.

Clients often ask which is the best way to go. The answer depends on how long you need the insurance for. If the life insurance is just needed for a 10 year period, then the Term 10 plan would be the best fit. But, if the insurance is needed for longer, a 20-year policy would likely offer a much lower overall cost.


Let’s consider a 40-year-old male, non-smoker applying for $500,000 of Term 10 coverage: he would pay $416.00 a year with Canada Life or $729.00 a year for a Term 20 policy with the same carrier.

At first glance, the Term 10 policy may seem like a better deal, but the Term 10 policy has a renewal premium of $2,700 a year at the end of 10 years. Over the 20-year period, the insured would put in $31,158 on a Term 10. Whereas, the Term 20 policy would cost only $14,580 over the same 20 years. That’s a savings of over 50%.


For more details, or for customized life insurance solutions, you can contact us at 1-866-899-4849 or visit our Term Life Instant Quote Page.

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