Understanding Decreasing Term Life Insurance

Most term life insurance policies sold in Canada are level-term plans, meaning that the premiums are fixed for a stated term and the coverage is also fixed for that term. By contrast, decreasing term life insurance policies have a level premium for the stated term, but the coverage goes down during the term of the policy.

Decreasing term life insurance policies are generally much lower in cost than level term policies. The following provides an example:

A 50-year old, male non-smoker applying for $500,000 of level Term 20 coverage would pay $159.75 a month with Equitable Life.

The same individual would pay $125.50 a month for a $500,000 decreasing term 20 policy with Assumption Life. Decreasing term policies work similar to mortgage insurance policies sold through a lending institution, but unlike mortgage insurance policies, most offer a conversion privilege, which allows the insured to convert to a permanent plan without a medical. This feature can be invaluable for insured individuals who have a change in health, such as diabetes or heart disease, which could make obtaining brand new coverage difficult.

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

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  • Meli
    August 16, 2013 at 6:53 pm

    Are decreasing Term policies less expensive than level policies if so how much less.

    • LSM Insurance
      August 19, 2013 at 1:31 pm

      Yes decreasing term policies are less expensive than level term policies. Fewer companies offer decreasing term plans and these plans are usually used to cover debt. We will be in touch by email.

  • LSM Insurance
    February 25, 2011 at 9:39 am

    Thanks for the note. We are happy to help out and we’ll send you an email now.

  • R. Daniel
    February 24, 2011 at 9:41 pm

    I am a testicular cancer survivor of more than seven years. Recent blood work all came back with good results. I have been without life insurance for several years now, but would like to start a policy as I am remarried and need to look out for people other than myself. Please contact me to start some dialogue.
    Thank you for your time and attention
    R Deener