If your job includes life insurance, that’s a valuable benefit — and for many people, it’s the first coverage they […]
Term and permanent life insurance both help protect the people you care about, but they work in different ways. Term life insurance covers you for a set period, such as 10 or 20 years, while permanent life insurance is designed to stay in place for life.
Which one makes more sense depends on your budget, how long you want coverage, and what you want the policy to help with. This guide explains the differences in simple terms so you can compare your options more easily.
Term life insurance gives you life insurance coverage for a specific number of years. You choose the length of the term and the amount of coverage that fits your needs. If you pass away while the policy is active, the benefit is paid to the people you named as beneficiaries.
Term life insurance can be a good choice if you want coverage while you are:
Once the term ends, you may be able to renew the policy, apply for new coverage, or convert it to permanent insurance, depending on the terms of your policy.
Here is a simple side-by-side comparison of how term and permanent life insurance work:
| Feature | Term Life Insurance | Permanent Life Insurance |
|---|---|---|
| How long it lasts | Covers you for a set period, such as 10 or 20 years | Designed to provide coverage for life |
| Cost | Usually lower when you first buy the policy | Usually higher than term insurance |
| Best for | Temporary financial needs | Long-term or lifelong needs |
| Common uses | Mortgage, income replacement, debts, raising children | Final expenses, leaving money to loved ones, lifelong protection |
| Premiums | Usually fixed for the selected term | Often fixed, depending on the policy |
| What happens later | You may be able to renew, replace, or convert the policy | Coverage can continue for life as long as the policy stays in force |
Neither option is better for everyone. The right choice depends on how long you want coverage, what you want it to help with, and what fits your budget.
Still not sure which option may be right for you? Call us for a free consultation and speak with a licensed advisor who can help you compare term and permanent life insurance based on your needs and budget.
Term life insurance generally costs less than permanent life insurance when you first buy coverage because it only provides protection for a specific period.
The price you pay will also depend on factors such as:
Because everyone’s situation is different, two people looking for the same amount of coverage may still receive different rates.
Not sure how much life insurance coverage you need? Try our Life Insurance Calculator to get a better idea of an amount that may fit your needs.
Yes. Some people use both term and permanent life insurance to cover different needs at the same time.
For example, a parent may choose a larger term life insurance policy while they are raising children and paying a mortgage, then keep a smaller permanent policy in place for long-term needs such as funeral and other final expenses.
Using both types of coverage can be a practical way to get more protection during the years when your financial responsibilities are highest, while still keeping some coverage for later in life.
Yes. Some term life insurance policies allow you to convert your coverage to permanent life insurance without going through medical underwriting again. The rules and deadlines depend on your policy.
To learn more about what you can do when your term life insurance coverage ends, take a look at our guide: What Happens When Your Term Life Insurance Ends?
A simple way to compare your options is to think about these four questions:
If you mainly need protection during your working years, while raising children or paying a mortgage, term life insurance may be worth considering. If you want coverage that is designed to remain in place for life, permanent life insurance may be a better fit.
Ready to compare your options? Get your personalized life insurance quote today and see what coverage may fit your needs and budget.
If your job includes life insurance, that’s a valuable benefit — and for many people, it’s the first coverage they […]
A stay-at-home parent may not bring home a regular paycheque, but the work they do every day has real value. […]
Shortly — yes. In many cases, you can apply for life insurance in Canada without leaving home. You can request […]
