With no cash value, profit sharing or investment account, individual term life insurance seems to exist only to cover a death protection amount. Yet, the product hides a wide range of periods of coverage and guarantees that allow for tailored protection, as revealed by the information from the insurance products intelligence centre InsuranceINTEL, a sister publication of the Insurance Portal.
The 10-year term insurance (T10) and the 20-year term insurance (T20) are the most common coverage periods in the market. A key feature of these products is the eligibility age, which may vary from one insurance company to another. A look at T10 illustrates this well. Empire Life, Foresters Financial and Sun Life push the limit up to age 75. At the other end of the spectrum, iA Financial Group and ivari accept insured individuals from birth.
Besides the T10 and T20, many other coverage periods are available. For example, Beneva's Term Plus 10 product comes in T10, T15, T20, T25, T30, T35, and T40 versions. Canada Life offers coverage ranging from five to 50 years. Some products end at a specific age. Desjardins Financial Security and Manulife are among the insurers that offer term insurance ending at 65 years old. Humania Assurance offers a fixed term to age 80. Under its Pick-A-Term term range, iA Financial Group offers all terms from T10 to T40. This data is not included in the tables in this article. To access a larger data registry, please subscribe to our Product Finder.
No medical exam
Simplified issue offerings, meanwhile, allow clients to subscribe to insurance protection without having to undergo medical tests. Thanks to insurers' digital platforms, these term insurance policies can often be issued immediately at the point of sale. Nine insurers offer simplified issue: Assumption Life; Beneva; Co-operators Life; Empire Life; Humania Assurance; iA Financial Group; Canada Protection Plan (CPP), a Foresters Financial company; Sun Life; and UV Insurance.
CPP has long made this niche a favored ground. The company offers several simplified issue products, including their Express Elite Term, CPP Deferred Elite and CPP Simplified Elite Term, CPP Preferred and Preferred Elite Term.
It is also possible to get some policies for small insurance amounts. Humania Assurance stands out with Insurance Without Medical Exam - Life, with face amounts starting at $5,000. iA Financial Group offers Access Life Deferred Plus and Immediate Plus policies offering $10,000 in coverage.
Cheaper
For whole life or universal life policies, the premiums paid may also reflect cash surrender values, dividends or investment amounts accumulated in the policy, depending on the type of insurance. Term insurance premiums, meanwhile, only reflect the pure cost of insurance. In addition, the period of the coverage is limited. These characteristics make it a less expensive product than whole life insurance or universal life insurance.
The one-year term, found in group insurance and in the annual renewable term (ART cost) of universal life insurance policies are the cheapest of all. The price of term life insurance also increases with longer coverage. For example, 20-year term life insurance will cost more than 10-year term insurance, for an equal insurance amount.
This quality makes it the preferred product of young families and women (as Chantal Mackenzie, regional vice president of sales for southern Alberta, Northwest Territories and the Yukon at Canada Protection Plan, told the Insurance Portal). While women are often the ones making insurance decisions, they tend to sacrifice their personal needs to maintain the family budget, and often prefer a term product over a whole life product., they tend to sacrifice their personal needs to maintain the family budget, and often prefer a term product over a whole life product.
This is a detail not to be overlooked, as the wage gap between men and women remains significant. A survey by ADP Canada conducted by Maru Public Opinion shows the gender pay gap persists in Canada. It reveals that the average salary reported by men was $72,743 in 2022, compared to $57,725 for women, a gap of more than $15,000. The gap is, however, narrowing. According to the ADP Canada survey, it reduced from 25 per cent in 2018 to 21 per cent in 2022.
This article is a Magazine Supplement for the June issue of the Insurance Journal.