Term Insurance Facts

Term life insurance policies offer premiums level for a stated term. The premiums start off lower, but increase as the insured ages.

The following are six additional term life insurance facts:

1. Term rates can vary sharply from one company to another. Term life insurance rates can often vary from as much as 50% to 60% from one company to another.

2. Most term life policies are renewable and convertible. The renewable feature on a term policy allows the insured to renew without a medical, but the insurance company does have a built-in buffer in the premium allowing that the insured’s health may have changed during the policy term. The convertibility feature allows the insured to convert from a term policy to a permanent plan without a medical.

3. Term life policies also have a two-year suicide and contestability clause. Similar to permanent policies, term life plans do have a two-year contestability period, which allows the insurance company to contest a claim in the first two policy years in the event of fraud. The insurance company will also forfeit a claim if the insured commits suicide within the first two policy years.

4. Term 10 policies are often less expensive than Term 5 policies. Term 10 policies offer premiums fixed for a 10-year period and are often less expensive than term 5 policies, which offer premiums that are level for 5 years. This is due to the fact that very few life insurance companies in Canada now offer Term 5 policies and thus, the premiums tend to be less competitive.

5. Most term policies allow the insured to add a full range of riders, including a a disability waiver, an accidental-death benefit or children’s term rider.

5. Many life insurance companies offer Preferred Rates on their term policies. Preferred Rates are given on term policies to insured and with very good family health history.

For more information on term life insurance policies in Canada. Please contact us at 1-866-899-4849, or visit our Term Life Insurance Instant Quote Page.


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