20-Year Term Life Insurance: Why Canadians Love It
See affordable life insurance quotes from PolicyMe and other top companies.
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
A 20-year term life insurance policy costs around $22 to $30 per month for someone in their early 30s. Prices will rise as you age.
20 years is the most popular term length in Canada. However, 10 years might be better if you’re closer to retirement, and 30 years might fit better if you have a long mortgage and very young dependents.
To decide whether 20 years is right for you, 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.
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!).
What is a 20-year term life insurance policy?
A 20-year term life insurance policy in Canada is one that covers you for a full 20-year term, meaning that your loved ones will receive a payout if you pass away while insured.
20-year term coverage: You have coverage for 20 years for a death benefit amount you choose when you sign up. This payout amount is generally between $50,000 and $5,000,000.
20-year term payouts: Your loved ones will receive the tax-free lump sum payout only if you pass away during the 20-year term. If you live past the expiry of the 20 years, then no payout will be made to your beneficiaries.
20-year term premiums: You pay level premiums every month for 20 years, $22–$30/month on average. Rates are locked in from day one, based on your age and health when you apply. The cost of a 20-year term policy is generally lower than a 30-year term.
How a 20-year term life insurance policy works
From start to finish, here is how a 20-year term life insurance policy works in Canada:
- Apply: Choose a 20-year term length and select your preferred death benefit amount ($50k to $5M, depending on eligibility and provider).
- Cost: Lock in level premiums based on your health and age.
- Coverage: Enjoy 20 years of protection backed by Securian Canada.
- Payout: Your loved ones can file for a payout if you die during the 20-year term.
- Expiry: If you survive the 20-year term, there is no payout. Your coverage ends at 20 years but you may extend coverage by renewing or converting.
Convertibility is available with a lot of term lengths, but it’s well worth seeking out for 20-year term policies.
This feature guarantees future insurability and could help you save money if you need permanent coverage. It’s possible that a major health issue may arise in the next 20 years, and a convertible 20-year term policy would allow you to convert to permanent coverage with no new medical exam if you still need coverage.
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 one of the categories below, consider requesting life insurance quotes for a 20-year term.
- 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.
Fully underwritten policies (which may include a medical exam) will be cheaper than guaranteed or simplified issue policies, if you’re young and healthy. However, people with pre-existing conditions or high-risk applicants may need to consider other options.
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.
Here’s how age and gender affect 20-year term rates:
* Average monthly rates for a non-smoking applicant with $500,000 of coverage.
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.
Smokers, beware: Gen Z reportedly consumes up to 3x more nicotine and cannabis than any generation before them. Smokers have higher rates than nonsmokers.
How affordable is 20-year term life insurance?
A 20-year term life insurance policy is usually very affordable ($23 to $46 per month) when compared to 30-year terms and permanent policies. PolicyMe offers 20-year term policies for around 20% below industry average.
Coverage amount is a key variable in the affordability of 20-year term policies.
Note: Your age, health, and underwriting path will affect a policy’s affordability in addition to the coverage amount. These numbers reflect average prices for a 30-year applicant with full underwriting.
The general rule is that lower coverage amounts are more affordable. But doubling your coverage does not usually double your premium. For instance, a $2 million 20-year policy may cost $80/month compared to $50/month for a $1 million policy. The average life insurance amount per Canadian household is around $500,000, but comparing the cost of a $250k vs. $500k life insurance policy reveals just a $5 difference in monthly premiums.
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.
How to choose a term length: 20 vs. 10 vs. 30 years
The right term length for life insurance is long enough to cover your specific debts and dependents, but not so long that you’re paying for coverage past the time when your family needs protection.
Many (but not all) Canadians find that 20 years is an appropriate term length to cover their debts and dependents.
Here’s a quick overview on term lengths.
Too short: A 5-year or 10-year term is probably cheaper, but it will not provide enough protection to completely raise kids, pay for their education, and completely pay off mortgages.
Too long: A 30-year or 40-year policy may appear ironclad, but it hides an opportunity cost. You could be paying for coverage long past the time when your dependents grow up and your debts are paid off.
The general rule is that the length of your term life insurance should match your financial future. As long as your loved ones are dependent on your income, you need an active life insurance policy.
Three simple questions to ask yourself about term length
To figure out the right term length for you, follow these steps:
- What 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.
- What about your mortgage? 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.
- What about 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.
No kids or mortgage? You may not need a 20-year life insurance policy unless you have other temporary financial obligations, such as a spouse who is 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.
Mortgage holders have an average of $762,660 in coverage in Canada, compared to $553,124 for non-mortgage buyers. And unlike mortgage life insurance, term insurance payouts go to your dependents directly.
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).
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 make sure you understand how your life insurance works.
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.
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?
When a 20-year term policy ends, your life insurance coverage and your premiums will stop. Your Canadian life insurance provider will notify you, and you may be offered the option to renew or convert.
Here’s what happens with your coverage when a 20-year policy matures and you’re still alive:
- The policy will expire: If you no longer need life insurance, you can simply let your policy end. You won’t owe any more premiums, your coverage will end, and your loved ones won’t get a payout when you die. If you’re over 50 with sufficient assets to cover your debts, this may be an appropriate age to stop paying for term life insurance.
You may also have these options in Canada:
- Renew your term coverage: You can renew coverage annually, one year at a time, if you still need short-term coverage, but fixed premiums will go up based on your age at renewal.
- 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, which accumulate cash value. Premiums will go up.
- Shop around: Request rates from other providers if you need a new policy. Renewal rates can be more expensive than a new policy, in some cases.
PolicyMe term policies are set to auto-renew annually until age 85 unless cancelled. You can also convert to a long term (not a permanent policy) within the first five years without new medical underwriting.
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 August 2026.