Age makes all the difference for 20-year term insurance

The age of the person to be insured will make all the difference in the recommendations for a term insurance duration. For those approaching sixty, the urgency to act is clear if the need points towards 20-year term insurance (T20), as revealed by the comparative table published within this article. 

Most of the 17 insurers offering T20 have set the maximum age at which they will issue a policy at 65. In comparison, the maximum age for issuing a T10 policy extends to 75, according to research conducted by Insurance Portal using the InsuranceINTEL product intelligence centre. 

Generally, the insurer sets the maximum age for issuing a term policy based on a simple calculation: 85 years minus the chosen duration. Hence, the most common maximum age in the T20 category is 65 (85 years – 20 years = 65 years). Some insurers specify this in InsuranceINTEL, including Canada Life, iA Financial Group, and RBC Insurance. 

There are exceptions to this calculation. Traditional Insurance T20 R&C, one of the two 20-year renewable and convertible term products offered by iA Financial Group, can be issued up to age 70. However, the T10 version of this product will only be issued up to age 70, not 75 as most of its competitors do. 

At ivari, TermSelect20 can only be issued up to age 60, as well as Manulife's Family Term and Family Term Vitality Plus products. The T10 versions of these products have a maximum issuance age of 70. For its HuGO life products, Humania Assurance has set the maximum issuance age at 59 for T20 and 69 for T10. 

Beyond T20 

The term insurance market offers several other duration possibilities beyond 20-year term insurance, according to InsuranceINTEL data. For example, Assumption Life offers its FlexTerm 25-year term insurance (T25) up to age 60, its T30 up to age 55, and its T35 up to age 50. At Beneva, the Term Plus T40 product follows the same logic, with a maximum issuance age of 45 (85 years minus 40 years). 

However, these limits break with this calculation for very long durations. For instance, Desjardins Insurance offers to issue its 65-year term insurance up to age 44. A client can subscribe to the T80 version of Humania Assurance's HuGO Life product up to age 70. 

Seeking balance 

After analyzing financial needs, Vanessa Charbonneau seeks the right balance between the available budget and the client's overall planning. "It's great to have life insurance, but we must not forget other aspects of financial planning, such as living benefits needs, retirement, and short-term savings. We must present a comprehensive offering," adds the financial security advisor with iA Financial Group's career network. 

Once this balance is found, it becomes clearer for her to suggest a term insurance duration to her client. Charbonneau then aims for the ideal middle ground solution between the client's short-term and permanent needs. The 20-year term insurance often becomes part of her conversation with a client who wants to cover a loan, the future of young children, and even the buyout of shares in case of the death of a business partner. 

Layered insurance 

Katrina Lee-Kwen, Senior Vice President, Performance Management, at Canada Life, emphasizes the importance of choosing the duration. She reminds us that products are available to approach this ideal with precision, including Canada Life's My Term, which offers coverage for any duration from 5 to 50 years. 

Sun Life offers Sun Life Evolve Term Life Insurance, a product covering durations from 5 to 40 years. iA Financial Group's Traditional multi-term life insurance, on the other hand, covers durations from 10 to 40 years. 

Lee-Kwen believes that clients can use multi-term products to layer term coverage durations according to their different needs over time. "If you have a 30-year mortgage on your house, you may want protection for 30 years. And if you have children for whom you want to ensure coverage until they finish post-secondary education, you may want part of the coverage for only 20 years," she explains.