Guide to 20-Year Term Life Insurance in Canada (2025)

TL;DR: Is a 20-year life insurance term right for me?

A 20-year term life insurance policy may be the right term length for you if: 

• You have a mortgage with 15 to 25 years of payments remaining
• You expect to retire in 20 years
• You want to maximize your life insurance coverage while on a budget
• You have children under the age of 5 

Your life insurance term should last as long as your major financial obligations. In order to decide if 20 years is right for you, you’ll need to estimate how long you’ll have dependents, mortgage payments, and other significant financial burdens. 

You can also lock in low rates now, and then renew (get another term policy) or convert (get a permanent policy) if your needs change.

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Our take

A 20-year term is the most popular life insurance option for a reason. It’s the sweet spot that covers you while you’re paying off your mortgage or raising kids without leaving you overinsured (or over budget!).

Who should choose a 20-year life insurance term?

A 20-year term is the most popular type of life insurance for a reason. 

For most families with dependents and a mortgage, a 20-year term aligns well with the years when their financial obligations peak. 

If you see yourself in a category below, consider requesting life insurance quotes for a 20-year term. 

A 20-year term might not be the right choice if…

• You’re under 20 years old and plan to have kids in the future
• You’re less than 20 years from retirement
• You don’t own a home or don’t have kids
• You have a high net worth or complex estate planning needs

20-year term life insurance rates in Canada

The cost of a 20-year life insurance term starts around $20 per month. However, costs vary depending on your age, gender, health, smoking status, and other factors like location and carrier. 

To help you budget for this purchase, let’s start by comparing average monthly rates for different age groups. In general, a 20-year term in your 20s or 30s allows you to lock in a low rate early. 

Younger people and women pay less than older people and men because data shows these groups are less likely to pass away while the policy is in force.

Here’s how age and gender affect 20-year term rates:

^{* Average monthly rates for a non-smoking applicant with $500,000 of coverage.} 

How affordable is 20-year term life insurance? 

Term life insurance rates also vary by the amount of coverage you carry. And the higher the coverage amount, the higher your premiums will be. The inverse is also true, the lower your coverage amount, the more affordable your 20-year term life insurance will be.

The average life insurance amount per Canadian household is just under $500,000, but you may need a lump sum more or less than that amount. 

The tables below compare average rates from five of Canada’s top-rated life insurance companies for 20-year term policies at various coverage levels. 

20-year term life insurance rates: $750K in coverage

^{* Average monthly rates for a 30-year-old applicant with $750,000 of coverage.}

20-year term life insurance rates: $500K in coverage

^{* Average monthly rates for a 30-year-old applicant with $500,000 of coverage.}

20-year term life insurance rates: $250K in coverage

^{* Average monthly rates for a 30-year-old applicant with $250,000 of coverage.}

20-year term life insurance rates: $100K in coverage

^{* Average monthly rates for a 30-year-old applicant with $100,000 of coverage.}

Not sure how much term life insurance coverage you need? PolicyMe’s online life insurance calculator is designed to help you take stock of your insurance needs and estimate the coverage amount and term length that’s right for you.

How to choose a term length: 20 vs. 10 vs. 30 years

When buying term life insurance, the length of your term should match your financial future. As long as your loved ones are dependent on your income, you need an active life insurance policy. 

To figure out the right term length for you, follow these steps: 

1. Think about your kids. If you have children, when will the youngest graduate college? If you want your term life insurance plan to cover your children’s education, your policy needs to last until that date. 
2. Check your mortgage timeline. If you own a home, how many years are left until the mortgage is paid off? Choose a longer term length if that’s the best match for your remaining payments. 
3. Consider laddering. Let’s say your mortgage will be paid off in 10 years, but your kids won’t graduate college for 20 years. You have the option to purchase both a 10-year term life insurance policy and a 20-year policy so that you have a higher level of coverage while both financial obligations are in play, but don’t end up overpaying for the second half of your policy term. 

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Don’t have kids or a mortgage? You may not need a 20-year life insurance policy unless you have other temporary financial obligations, such as a spouse that’s dependent on your income for living expenses. 

How much coverage do I need for a 20-year term?

Everyone needs a different amount of coverage based on their income, debts, and financial goals. 

A good starting point for life insurance coverage is 10-15x your annual income.

Use a free online life insurance calculator to estimate your ideal coverage level, or try to estimate your family’s future expenses:

• Mortgage: What’s your outstanding balance?
• Childcare and education: What’s the total future cost of childcare and education until kids become financially independent?
• Debts: What car loans, credit card payments, and personal loans do you still owe?
• Final costs: What might your funeral expenses and medical bills add up to?
• Income replacement: Do your dependents rely on a certain income to maintain their lifestyle?

Remember to adjust each number if the expenses will end at different times. For instance, kids may rely on you for 15 years but your mortgage may be paid in 10 years. 

The DIME method is another way you can short-hand calculate your life insurance needs (Debt + (Income x years of coverage) + Mortgage + Education).

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Account for inflation

Your coverage amount is easy to reduce later but harder to increase, so go higher if you can. The dollar may be worth less in the future! The increase in your monthly premium may only be a few dollars to buy thousands more in coverage.

Riders and options (and when they’re worth it) 

You may have the option to add various riders, or endorsements, to your 20-year term life insurance policy. Providers offer different riders, so check the fine print.

Common riders include: 

• Accelerated death benefit rider: Allows you to access part of your death benefit early if you’re diagnosed with a terminal or critical illness. 
• Long-term care rider: Allows you to access your death benefit early to pay for healthcare costs if you’re diagnosed with a chronic illness. 
• Child rider: Provides life insurance for your kids, which can be converted to a permanent life insurance product later. 
• Return of premium (ROP) rider: Allows you to get all your paid insurance premiums back if you don’t die during your policy term. 
• Guaranteed insurability rider: Lets you purchase more coverage in the future without the need for an updated medical exam. 

All of PolicyMe’s 20-year term life insurance policies include $10,000 of child coverage as a no-cost benefit. 

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Our take

While the benefits that come with life insurance riders are attractive, they will raise your premiums. For most Canadians, lower premiums make a policy without riders a more realistic, cost-effective option.

What happens when the 20-year term ends? 

If you choose a 20-year term for your life insurance policy, your coverage will end when that period of time expires unless you renew the policy. 

Your life insurance company will notify you when your term is about to end. You’ll have a few options: 

• Let the policy expire: If you no longer need life insurance, you can simply let your policy end. You won’t owe any more premiums, and your coverage will end — meaning that your loved ones won’t get a payout when you die. 
• Renew your policy: Your fixed premiums will likely go up if you choose to renew your coverage, but this can provide short-term coverage to bridge the gap if you’re close to being free of debts and dependents. 
• Convert to a permanent life insurance policy: Some term life insurance policies can be converted to permanent life insurance, such as whole life insurance or term-to-100 life. 

If you’re not sure where you’ll be in 20 years, good news, you’re not alone. Insurance advisors help policyholders make decisions about how to handle the end of their policy term every day, and you’ll have plenty of options to choose from. 

FAQs: 20-year term life insurance

^{*Rates listed in this article are based on publicly available figures as of December 2025.}