Term life insurance

What is term life insurance?

Term life insurance covers your life for a set number of years, called the term. If you die during that term, the insurer pays the coverage amount to the beneficiaries you named, tax free. If the term ends and you are still alive, the policy either ends or renews, depending on what your contract says.

It is the simplest kind of life insurance to understand. You pick an amount, you pick a length, and you pay a premium that stays level for the whole term. There is no savings account inside the policy and no cash surrender value, which is part of why it costs less than lifelong coverage for the same amount.

At Emma, life insurance policies are issued by Humania Assurance Inc. and distributed by Emma Services financiers Inc.

How much does term life insurance cost in Canada?

There is no single price, and any figure you find in an article is someone else's rate, not yours. Your premium is built from your own profile and from the contract you choose, then confirmed in the offer you receive. That is the honest answer, and it is worth understanding why.

Under the contract, your age, sex, tobacco use and health together define your risk class. On top of that, the coverage amount, the length of the term and any optional riders move the number. Two people the same age can be quoted very differently, and the same person can be quoted differently for a 10 year term and a 30 year term.

One thing most comparison tables leave out: look at the renewal premiums written in the contract, not only the cost of the first years. Two quotes that start at the same price can behave very differently once the initial term ends.

For the full breakdown across all our products, see our page on the price of life insurance. If you are not sure how much coverage to ask for in the first place, start with how much life insurance you need.

Get my personalized quote

How does a 10 year term life insurance policy work?

A 10 year term is the shortest term Emma offers, and it is the easiest way to see the whole mechanism. Here is the sequence, start to finish.

You choose your coverage amount and a 10 year term when you apply. The insurer reviews your application and assigns a risk class. Once the policy takes effect, your premium is level for those 10 years. If you die at any point inside that window, and no exclusion applies, the full coverage amount goes to your named beneficiaries, tax free.

If you are alive at the end of year 10, nothing is paid out. A term policy is not a savings plan, so there is no refund and no accumulated value. What you do have are options, and they are the part people usually miss:

• Let the policy renew. With Emma, it renews annually up to age 80 with no new evidence of insurability. The renewal premium follows the schedule set out in your contract and rises with your attained age.
• Convert it. Up to age 65 you can convert to a non-participating whole life policy with no evidence of insurability.
• Exchange it early. Between the 1st and 5th policy anniversary you can exchange once for a longer term, subject to the contract conditions.
• Let it end. If the mortgage is paid and nobody depends on your income anymore, stopping is a legitimate decision.

The renewal right is worth more than it looks. If your health changes during those 10 years, you keep coverage without having to prove insurability again. The trade is that renewal costs more each year, so a renewed policy is a bridge, not a long term plan.

How long a term should you choose?

The right length is the one that covers the period when other people depend on your income. The useful question is not which term is best, it is how many years your family would need this money.

Emma's term product lets you pick the length at application, anywhere from 10 to 35 years in one year steps. You are not restricted to the classic 10, 20 or 30 year buckets, so you can line the term up with the year your mortgage ends or your youngest child finishes school. The exact term is confirmed in your contract.

Renewal, conversion and the exchange right

This is where two term policies that look identical stop being identical. Three mechanisms deserve a close read before you sign anything.

Renewal

At the end of the term, Emma coverage renews annually up to age 80 with no new evidence of insurability. That protects you if your health has changed. In exchange, renewal premiums follow the schedule set out in the contract and go up with your attained age. Read that schedule before you sign, not after.

Conversion

Up to age 65 you can convert your term coverage into a non-participating whole life policy with no evidence of insurability, starting at 1,000 of coverage. The premium on the new policy is based on your attained age, the rates in force and your risk class. Put plainly, conversion spares you a new health review, not a new price.

The exchange right

Between the 1st and 5th policy anniversary you can exchange your coverage once for a longer term, with no evidence of insurability, as long as the policy is in force and the contract conditions are met. Useful when your life moves faster than your original plan did.

Term life or permanent life insurance?

They answer different questions. Term protects a period of your life, permanent protects all of it. Comparing their prices without comparing their duration does not tell you much.

One correction worth making, because it appears everywhere online: permanent insurance does not automatically build a cash value. Some permanent policies do, others do not. Emma's permanent product, T100, has no cash surrender value and is non-participating. Check that specific line in any offer instead of assuming it.

To go further, read our page on whole life insurance.

What is not covered

No life insurance contract covers everything. The Emma contract sets out limitations including the following.

• Suicide within the first two years of the policy.
• Misrepresentation on the application, which can void the contract.
• Death resulting from a criminal act.
• Death during certain high risk activities named in the contract, such as mountaineering, ice climbing, scuba diving outside a resort setting, paragliding, hang gliding, skydiving, bungee jumping, heli-skiing, off-piste skiing, off-trail snowmobiling, aviation other than commercial pilots, auto racing and kitesurfing.

This is a summary. The exact wording is in the policy specimen, which we publish openly. Reading it before you buy takes fifteen minutes and it is the only version that governs a claim.

Emma term life insurance at a glance

Riders can be added to your contract, including coverage for a dependent. Each rider carries its own premium, so check what your quote actually includes. See how child riders work on life insurance if you have children at home.

Frequently asked questions

What happens when my term life insurance ends?

It depends on the contract. With Emma, coverage renews annually up to age 80 with no new evidence of insurability, at premiums set by the schedule in the contract. Nothing is paid out for having outlived the term. In many cases the need has also shrunk by then, with the mortgage paid off, the children independent and savings built up.

Is there an age limit on term life insurance?

There is no single legal cutoff that applies to every insurer, so treat any article quoting one with suspicion. What matters are the limits in your own contract. With Emma you can apply between ages 18 and 80, coverage renews annually to age 80, and conversion to a permanent policy stays open until age 65.

Does term life insurance have a cash value?

No. Term coverage has no cash surrender value. The premium funds the death benefit and nothing else, which is part of why it costs less than lifelong coverage for the same face amount. If you want money back at the end of a term, that is a return of premium feature, offered by some insurers on some products, and it is not part of the Emma term contract.

How is the death benefit paid out?

The coverage amount goes to the beneficiaries you named and is not taxable in their hands. If the money is left with the insurer and earns interest, that interest is taxable. Naming your beneficiaries carefully matters more than most people expect, so read our page on the life insurance beneficiary.

Do I need a medical exam?

It depends on your profile and the amount you request. The application starts with a health questionnaire, and the insurer then decides whether more information is needed. There is no guaranteed acceptance and no application without health questions. See our page on life insurance with no medical exam.

Can a senior get term life insurance?

Yes, within the issue ages of the product. Emma accepts applications up to age 80. Premiums are generally higher at older ages because age is one of the factors that defines the risk class, and the terms available to you depend on your age at application.

Get your price

Your premium depends on your age, your health, the coverage amount and the term you choose. The only way to know your real number is to complete an application and receive a personalized offer. You can go through it on your own or ask an advisor for help along the way.

Start my term life insurance quote