Life insurance premiums explained

With individual term life insurance, your premiums are guaranteed to be the same for the length of the policy; however, your premiums will increase at the end of each term when your policy automatically renews.

For example, let's say you have a 10-year term life plan, you will pay a fixed premium for the duration of that term. If your policy is guaranteed renewable, as most term life insurance plans are, it will renew automatically for another 10 years, but the premiums will increase to reflect your age at the time of renewal. Your coverage then continues for another 10 years. This occurs until your policy expires.

If you miss a life insurance premium payment, there's typically a grace period (usually 30 days) within which you can make your premium payment to ensure that your life insurance policy remains active.

During this grace period, the policy is still in effect, so if the policy owner passes away, the insurance provider may still payout the death benefit. However, premiums owing would be deducted first. Be sure to refer to your life insurance policy to understand how your insurer approaches grace periods.   

If your outstanding premium payment is not paid by the end of the grace period, your policy will lapse. If your policy has lapsed, you have two options:

1. Reinstatement: The reinstatement period can range from when your grace period ends (usually 30 days) up to 5 years. This requires you to pay all overdue premiums, provide proof of insurability (submit certain health documents to your insurance company to qualify for coverage), and, in some cases, complete a reinstatement application.
2. Reapplying: You can, if you wish, reapply for coverage. However, this would be at a higher premium because you are older and may require going through medical underwriting. Note: You could also be denied coverage.

Here are some of the ways that life insurance companies use the premiums they collect: to pay future claims, to support operational costs, and to meet reserve requirements (the funds an insurance company must hold), amongst other things.

And since life insurance involves long-term financial commitments, insurance companies also invest a portion of their premium funds to maintain financial stability. This helps life insurance companies manage risk and fulfill long-term financial obligations across different policy types.

There are a number of contributing factors that can influence the cost of your life insurance premiums. These can include your:

• Age
• Sex at birth
• Health history
• Smoker status (includes vaping)
• Lifestyle and occupation
• Coverage amount
• Plan type

Let's look at how much premiums could be for TD Term Life Insurance. 

To apply for this coverage, you must be a Canadian citizen or resident¹ and fall within the age eligibility requirements for the plan. In the chart below, the premiums are for non-smokers, and a 10% savings is included for applying online².

Let's also look at how much TD Guaranteed Acceptance Life Insurance can cost.

To apply for this coverage, you must be between the ages of 50 to 75 and a Canadian citizen or resident^1. The per month premiums below are for non-smokers, and they include applicable taxes.

Note: Once your eligibility requirements have been met, you will instantly have coverage upon submission of your enrolment. No health or medical questionnaires required.

If you're interested in learning more about TD Term Life Insurance or Guaranteed Acceptance Life Insurance, you can explore these life insurance plans in more detail.

Explore life insurance plans