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5 year term life insurance (Canada)

5 year term life insurance is not readily available in Canada any longer. As far as I know, all companies have ceased offering it.

It was originally a popular insurance policy – the goto for term life insurance. That’s because back in the day term life policies renewed at the same premium as someone who’d just taken a medical exam. You’d buy a 5 year term policy at age 30 say, then at age 35 the premiums would increase for another 5 years – but those premiums would be the same as someone who’d just passed a medical exam. Every 5 years your premiums would bump up for your age but still remain competitive.

Unfortunately, eventually the insurance industry changed the way premiums work at renewal. Premiums at renewal are now much higher because they’re assuming they haven’t seen your medical information in years. This led to people seeking longer terms than 5 years (in order to lock in their premiums).

Eventually 10 year term became more and more competitive to the point that 10 year term premiums were competitive or cheaper than 5 year term. At that point companies started to cease offering 5 year term policies. To my knowledge, Sun Life continued to offer 5 year term polices well past other companies but it seems that today even they no longer offer a 5 year term policy.

If you’re looking for 5 year term, your best bet is going to be a 10 year term policy instead.

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